Working Paper No. 1325

Price Dynamics of Swedish Pharmaceuticals

Published: March 18, 2020Pages: 42Keywords: Pharmaceutical pricing; Dynamic oligopoly; State dependence; Price cyclesJEL-codes: D43; I11; L13; L40

Price Dynamics of Swedish Pharmaceuticals Aljoscha Janssen


This paper investigates price patterns of off-patent pharmaceuticals in Sweden. I show that price dynamics are dependent on the number of competitors in the market. The price patterns follow predictions from a model of dynamic price competition in which the demand for pharmaceuticals incorporates the known biases of consumers: habit persistence and brand preferences. Using the regulated market of Swedish pharmaceuticals, I show that price may help in identifying possible tacit collusion by manufacturers in markets where consumers experience behavioral frictions.


Reference:

Janssen, Aljoscha (2020), "Price Dynamics of Swedish Pharmaceuticals". IFN Working Paper No. 1325. Stockholm: Research Institute of Industrial Economics. 

Interdisciplinary European Studies

The European Union and the Return of the Nation State

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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