Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Price discrimination in the Italian medical device industry: an empirical analysis

Price discrimination in the Italian medical device industry: an empirical analysis Abstract In this paper we ascertain that the Italian market for medical devices is characterized by significant price dispersion. We have, therefore, carried out an econometric analysis, as well as a Bayesian network analysis to verify if price dispersion is due to price discrimination. We have found that ASLs (Aziende Sanitarie Locali) incur higher procurement costs than AOs (Aziende Ospedaliere), which purchase larger quantities as Centralized purchasing agencies do. Consequently, second-degree price discrimination may be one of the causes of price differences. Price levels are also inversely related to product age because of intense innovative activity, making product differentiation more likely than price discrimination. Public procurement agents located in Southern Italy pay higher prices than those located in Northern or Central Italy. This is due to the higher probability for Southern procurement agents to purchase from independent wholesalers, rather than from producers, implying a double marginalization effect which raises final prices. It is also more likely that obsolete medical devices are sold to Southern health care providers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png "Economia Politica" Springer Journals

Price discrimination in the Italian medical device industry: an empirical analysis

Crea, G.; Cavaliere, A.; Cozzi, A.
"Economia Politica" , Volume 36 (2): 38 – Jul 1, 2019
Download PDF
38 pages

Loading next page...
 
/lp/springer-journals/price-discrimination-in-the-italian-medical-device-industry-an-YJeCzNB0h3

References (47)

Publisher
Springer Journals
Copyright
2019 Springer Nature Switzerland AG
ISSN
1120-2890
eISSN
1973-820X
DOI
10.1007/s40888-019-00149-5
Publisher site
See Article on Publisher Site

Abstract

Abstract In this paper we ascertain that the Italian market for medical devices is characterized by significant price dispersion. We have, therefore, carried out an econometric analysis, as well as a Bayesian network analysis to verify if price dispersion is due to price discrimination. We have found that ASLs (Aziende Sanitarie Locali) incur higher procurement costs than AOs (Aziende Ospedaliere), which purchase larger quantities as Centralized purchasing agencies do. Consequently, second-degree price discrimination may be one of the causes of price differences. Price levels are also inversely related to product age because of intense innovative activity, making product differentiation more likely than price discrimination. Public procurement agents located in Southern Italy pay higher prices than those located in Northern or Central Italy. This is due to the higher probability for Southern procurement agents to purchase from independent wholesalers, rather than from producers, implying a double marginalization effect which raises final prices. It is also more likely that obsolete medical devices are sold to Southern health care providers.

Journal

"Economia Politica" – Springer Journals

Published: Jul 1, 2019

Keywords: Economic Policy; International Political Economy

There are no references for this article.