This paper analyzes a maximum price system and a reference price system in a vertical differentiation model with a …. For identical regulatory prices, free pricing under the reference system tends to result in a higher price for the brand …-name drug. For identical price reductions of the brand-name drug, the lower reimbursement amount under the reference price …

. Governments in both countries may limit prices directly via price caps or restrict third-party payer reimbursement for the drug … price cap and a reimbursement limit under certain conditions. In the destination country, parallel trade has no effect on … the level of regulation under a price cap, and it intensifies regulation under a reimbursement limit. Parallel trade may …

Price cap regulation was ... …

. Governments in both countries may limit prices directly via price caps or restrict third-party payer reimbursement for the drug … price cap and a reimbursement limit under certain conditions. In the destination country, parallel trade has no effect on … the level of regulation under a price cap, and it intensies regulation under a reimbursement limit.Parallel trade may …

Price cap regulation uses a formula, set in advance, to determine the price increases for a firm's services for a …. Customers can also benefit because the price cap formula may cause prices to rise less rapidly during the period. The sharpened … incentives created may encourage the firm to offer innovative new services. After the period ends, regulators may order price …