It is well known that existence of monopoly is accompanied by economic inefficiency in the form of dead weight loss and … reduced consumer surplus. The consumer surplus that exists in case of perfect competition gets reduced in case of monopoly; as … a part of it goes to the monopolist in the form of monopoly profit, a part of it is lost in the form of deadweight loss …

copayments (specific reimbursements). We show that the induced equilibrium with copayments involves a lower producer price and a … higher level of welfare for consumers. This results provides strong support for a reference price based reimbursement policy. …

Constantly rising expenditures for pharmaceuticals require government intervention in firms' pricing decisions. To this … the introduction of a reference price leads to lower equilibrium prices and induces fiercer competition between firms …

our theory is the health care market, where drug prices can be very high. Our model predicts that monopoly prices for …We offer a theory of how the combination of budget constraints and insurance drives up prices. A natural context for … orphan drugs are inversely related to the prevalence up until a maximum price. This is supported by empirical evidence in the …

-of-pocket drug costs decrease substantially. Our results suggest an average price elasticity of -0.17, which indicates evident moral …