Drugs and medicines account for about half of the total medical out-of-pocket expenses of households. This share of drugs to total medical expenses is much higher for the poor than the rich. Thus, affordability of medicines is an important issue in poverty reduction. Recent efforts to improve...

This paper studies the effect of two regulatory instruments - a price cap and a reference price system - a mandatory substitution rule, and the combination of both on generic competition in a Salop-type model with an off-patent brand-name drug and n differentiated generic versions. The price cap...