Prices/pricing controls

Presence or absence of price controls Availability of convertible currencies locally... 

Wellhead Pricing With passage of the Natural Gas Wellhead Decontrol Act of 1989, all remaining wellhead price controls on natural gas were lifted. As a result, federally mandated natural gas wellhead prices no longer exist. With this, the competitive marketplace has become the most important factor affecting natural gas wellhead prices, along with weather, demand, pricing of competitive fuels and competition for supplies. 

The oil and gas price-control systems were complex devices that subdivided each fuel into numerous categories based on such considerations as the time of... 

The present Spanish system of price control is inefficient, as it provides notable negative incentives for pharmaceutical consumption and expenditure it would be desirable to replace it with a more flexible system such as an overall profit control system, or a combination of price-cap regulation and rate of return regulation. 

First, the pharmaceutical market failures mentioned above may be empirically inconsequential, which may either render their regulation unnecessary or make it advisable to use more flexible price control policies. For example, justifications for regulation that are based on the virtual absence of competition seem weak when one observes markets with products whose patent has expired. When a patent expires barriers to entry should disappear, since the composition of the active ingredient becomes public, and other companies should not have too many problems to reproduce the production process. The reasons brandished for price regulation when any company can manufacture a generic to compete with the brand product find no justification in theory. 

And third, given that regulatory intervention generates both benefits and costs, the benefits of price control might be more than cancelled out (welfare loss) by its costs in the form of administrative costs, transaction costs and distortions in incentives derived from the regulation itself.5 The costs of an imperfect market cannot be compared with those of a perfect one, and pharmaceutical price regulation failures must be taken into account. 

It is simpler than RORR and less manipulable than individual price control, and therefore generates lower transaction costs. 

However, pharmaceutical expenditure is not lower in countries with lower price levels and stricter price control systems the level of consumption can be higher, and the expenditure can actually be higher than in other countries with greater price flexibility. Thus, the level of expenditure is quite high in countries such as Japan, France and Italy. 

Very strict price control systems can give rise to higher prices at the time of introduction of a new product and the weakening of potential price reductions on expiry of a product s patent (the case for 88 per cent of products in the USA). These observations support the idea that it does not appear to be at all efficient to continue with the system of product-by-product price intervention currently in force in Spain. A regulation system that gives the company flexibility of pricing and excludes products that are subject to competition would be far more recommendable.1... 

Co-payment is an instrument that should not be used on its own. Neither efficiency in drag use nor equity nor the control of pharmaceutical expenditure can rest solely on co-payment. Its effectiveness is reinforced when it is combined with other instruments and incentives. In fact, all European countries combine, in different doses and proportions, multiple instruments that influence the behaviour of the industry, prescribes and patients. It is sufficient to recall that pharmaceutical expenditure is the product of price by quantity, and to consider the enormous international variability of drag prices,35 in order to understand the limitations of co-payment regulation in comparison with other policies that influence prices. Policies aimed at price control can be as effective as co-payment - or more so - for purposes of cost containment. 

Negative list Price control Profit control Package size Number of items per prescription Coercive budgets Non-coercive Indicative budgets... 

The speed at which other products are diffused is related to price control and how registration works in each country. 

Borrell s study43 attempts to measure the effect of price control in the UK, which is based on limiting the rate of return on capital. Using cointegration techniques, the author concludes that the system has had little effect in terms of price containment. 

Orzechowski, W. and Walker, R., Dose of Reality How Drug Price Controls Would Hurt Americans, Policy Paper No. 25, February 7, 2000. 

China s pharmaceutical market is growing at a very fast pace. The current data show that the total market is around US 20 billion, and it is the ninth largest pharmaceutical country in the world. The Chinese government maintains price control on imported drugs. With China s entry into the World Trade Organization (WTO), tariffs have been reduced from 20% to 6.5%. The projection is that the market size will reach US 60 billion by 2010, and China will be the world s largest market by 2020. 

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