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Brown Bag Seminars

Paying for pharmaceuticals: uniform pricing versus two-part tariffs

Guest speaker

Odd Rune Straume (NIPE)


Room -1.26 EEG


Start06.10.2021 11:00End06.10.2021 12:00

Type of registration

Online via E-mail

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Event summary

This Wednesday, 6th October (11:00 – in-person and online) Odd Rune Straume is presenting a Brown Bag Seminar. Odd is a Professor of Economics at EEG – UMinho and a NIPE researcher.

Odd is a top researcher and your attendance and participation is very important. If you attend online, turning on your camera during the seminar would be very positive.

Odd holds a Ph.D. in Economics from the University of Bergen. He was the director of NIPE from 2013 to 2019. He is a Research Fellow at CESifo (Munich) since 2009; Research Associate at Bergen Center for Competition Law and Economics (BECCLE); Associate Editor of Journal of Health Economics since 2019 and of Bulletin of Economic Research since 2016; Co-Editor of Portuguese Economic Journal in the period 2008-2016.

Odd’s research interests are in the fields of industrial organization, health economics, competition and regulation in health care markets and labour markets. His research has been published widely in journals such as Journal of Health Economics, Health Economics, Journal of Economic Behavior & Organization, American Journal of Health Economics, Journal of International Economics, Journal of Public Economics, European Economic Review.

To join the webinar, click on the link: https://videoconf-colibri.zoom.us/j/88034821830


Two-part pricing (the Netflix model) has recently been proposed instead of uniform pricing for pharmaceuticals. Under two-part pricing the health plan pays a fixed fee for access to a drug at unit prices equal to marginal costs. Despite two-part pricing being socially efficient, we show that the health plan is worse off when the drug producer is a monopolist, as all surplus is extracted. This result is reversed with competition, as two-part pricing yields higher patient utility and lower drug costs for the health plan. However, if we allow for exclusive contracts, uniform pricing is preferred by the health plan.