Net Price Research Articles

Refusing the best price?

The Regulation National Market System (Reg NMS) links fragmented stock exchanges by routing orders to the National Best Bid and Offer (NBBO). As the NBBO ignores exchange fees, 62% of routings lead to worse net prices. An increase in fee differences increases the market share captured by orders that refuse Reg NMS routings, particularly for stocks whose fees account for a large portion of transaction costs. Heterogeneous opportunity costs rationalize routing choices: non-routable orders entail lower non-execution costs than routable orders. Our results indicate that fees and clientele segmentation drive the proliferation of order types in the Reg NMS era.

Role of Economic Evaluations on Pricing of Medicines Reimbursed by the Italian National Health Service.

The main objective of this study was to explore the extent to which the incremental cost-effectiveness ratio (ICER), alongside other factors, predicts the final outcome of medicine price negotiation in Italy. The second objective was to depict the mean ICER of medicines obtained after negotiation. Data were extracted from company dossiers submitted to the Italian Medicines Agency (AIFA) from October 2016 to January 2021 and AIFA's internal database. Beta-based regression analyses were used to test the effect of ICER and other variables on the outcome of price negotiation (ΔP), defined as the percentage difference between the list price requested by manufacturers and the final price paid by the Italian National Health Service (INHS). In our dataset of 48 pricing and reimbursement procedures, the ICER before negotiation was one of the variables with a major impact on the outcome of negotiation when ≥ 40,000€/QALY. As resulting from multiple regression analyses, the effect of the ICER on ΔP seemed driven by medicines for non-onco-immunological and non-rare diseases. Overall, the negotiation process granted mean incremental costs of €64,688 and mean incremental QALYs of 1.96, yielding an average ICER of €33,004/QALY. This study provides support on the influence of cost-effectiveness analysis on price negotiation in the Italian context, providing an estimate of the mean ICER of reimbursed medicines, calculated using net confidential prices charged by the INHS. The role and use of economic evaluations in medicines pricing should be further improved to get the best value for money.

What Should US Policymakers Learn From International Drug Pricing Transparency Strategies?

This article analyzes differences in prescription drug pricing transparency practices among 3 Organisation for Economic Co-operation and Development member nations: the United Kingdom, Germany, and Canada. Specifically, this article compares these countries' policies on list and net price disclosures and on how international reference pricing is used to evaluate merits and drawbacks of different pricing transparency approaches. Finally, the article summarizes what policymakers in the United States should learn from these comparisons.

Medicaid Spending on Antiretrovirals From 2007 Through 2019.

Antiretroviral (ARV) medications to treat human immunodeficiency virus (HIV) are a major contributor to Medicaid prescription drug spending. Despite having been used for over 3 decades, the first generic ARVs only recently became available, and many newer versions continue to be sold at high prices despite within-class competition. We estimated Medicaid spending on ARVs from 2007 through 2019. Using public Medicaid State Drug Utilization data, we identified trends in ARV spending and use from 2007 through 2019. We estimated net spending and average prices (spending per 30-day supply), accounting for statutory Medicaid rebates, including a 15%-23% base rebate plus additional rebates if a drug's price increased faster than inflation. Among 48 ARVs, estimated net Medicaid spending from 2007 through 2019 was $25 billion for 17 million 30-day supplies. Annual use increased 118%, from 0.7 million 30-day supplies in 2007 to 1.6 million in 2019. During this time, estimated annual net spending increased 178%, from $1.1 billion to $3.0 billion, and average net prices increased 28%, from $1432 to $1830 per 30-day supply. Annual Medicaid net spending on ARVs nearly tripled from 2007 to 2019, due to a combination of expanded use and rising prices. Medicaid did not extract expected benefits from its mandatory inflationary rebates because they were offset by use of newer, more expensive ARVs. To better control spending related to products with incremental innovation, the US government should be authorized to assure that launch prices for new drugs are aligned with the added benefit they offer over existing therapies.

Estimated changes in price discounts for tenofovir-inclusive HIV treatments following introduction of tenofovir alafenamide.

We estimated list and net prices for tenofovir disoproxil fumarate (TDF) products Truvada, Complera, and Stribild, and their tenofovir alafenamide (TAF) versions Descovy, Odefsey, and Genvoya. Gilead offered discounts for Descovy that resulted into lower net prices compared to Truvada. This strategy encouraged patients switching from Truvada to Descovy before the availability of generic Truvada. Conversely, Gilead offered lower discounts for Odefsey and Genvoya, which resulted into higher net prices compared to Complera and Stribild.

Impact of imperfect foresight on the optimal DER deployment, remuneration and policy

This paper proposes a decision-making framework to optimize electricity tariffs and remuneration policy for renewable energy sources operating in transmission- and distribution-level (T&D) marketplaces. We develop perfect and imperfect foresight models with a multi-level structure to investigate the effects of the inability of actors to correctly predict future remuneration on the efficiency of the decisions made by policymakers. The important advantage of the proposed models is that while they are capturing conflicting interests and different information availability of stakeholders involved, they also account for techno-economic constraints on operations of generation, transmission and distribution assets. The presented models can accommodate net metering, value stack, and distribution locational marginal price (DLMP)-based remuneration policies, which allows for their numerical comparison in terms of the effect on the optimal roll-out of distributed energy resources (DERs). The case study carried out for the NYISO and Manhattan T&D networks reveals that inaccurate foresight on the DER remuneration diminishes the social welfare under all DER remuneration policies, with the maximum loss of 1.6% across all considered scenarios.

Association of Research and Development Investments With Treatment Costs for New Drugs Approved From 2009 to 2018

Drug companies frequently claim that high prices are needed to recoup spending on research and development. If high research and development costs justified high drug prices, then an association between these 2 measures would be expected. To examine the association between treatment costs and research and development investments for new therapeutic agents approved by the US Food and Drug Administration (FDA) from 2009 to 2018. This cross-sectional study analyzed 60 drugs approved by the FDA between January 1, 2009, and December 31, 2018, for which data on research and development investments and list or net prices were available. Data sources included the FDA and SSR Health databases. The primary independent variable was estimated research and development investment. The outcome was standardized treatment costs (ie, annual treatment costs for both chronic and cycle drugs, and treatment costs for the maximum length of treatment recommended for acute drugs). Standardized treatment costs were estimated separately using list and net prices obtained from SSR Health at the time of launch and in 2021. To test the association between research and development investments and treatment costs, correlation coefficients were estimated and linear regression models were fitted that controlled for other factors that were associated with treatment costs, such as orphan status. Two models were used: a fully adjusted model that was adjusted for all variables in the data set associated with treatment costs and a parsimonious model in which highly correlated variables were excluded. No correlation was observed between estimated research and development investments and log-adjusted treatment costs based on list prices at launch (R = -0.02 and R2 = 0.0005; P = .87) or net prices 1 year after launch (R = 0.08 and R2 = 0.007; P = .73). This result held when 2021 prices were used to estimate treatment costs. The linear regression models showed no association between estimated research and development investments and log-adjusted treatment costs at launch (β = 0.002 [95% CI, -0.02 to 0.02; P = .84] in the fully adjusted model; β = 0.01 [95% CI, -0.01 to 0.03; P = .46] in the parsimonious model) or from 2021 (β = -0.01 [95% CI, -0.03 to 0.01; P = .30] in the fully adjusted model; β = -0.004 [95% CI, -0.02 to 0.02; P = .66] in the parsimonious model). Results of this study indicated that research and development investments did not explain the variation in list prices for the 60 drugs in this sample. Drug companies should make further data available to support their claims that high drug prices are needed to recover research and development investments, if they are to continue to use this argument to justify high prices.

Do Online Firms Individualize Search Results? An Empirical Analysis of Individualization on Amazon

Online markets offer sellers access to buyers’ information and, thus, the potential to alter prices and products accordingly. In light of this, we undertook an empirical analysis to test for individualization on Amazon.com. We collect data from individuals recruited to shop for household items. Our results indicate evidence of individualization of search results and net prices (via coupons). We found, contrary to what was expected, that demographic, geolocation, and account information play an insignificant role in individualization of search results. Thus, we conclude that individualization is based on more dynamic information, e.g., online browsing behavior. This highlights the fact that sellers’ need for (and use of) buyer information goes beyond the simple information accessible from the buyers’ accounts to a more rigorous monitoring of buyers’ online behavior.

Going ‘Super Value’ in New Zealand: cigarette pricing strategies during a period of sustained annual excise tax increases

BackgroundBetween 2010 and 2020, the New Zealand (NZ) Government increased tobacco excise tax by inflation plus 10% each year. We reviewed market structure changes and examined whether NZ tobacco companies...

Toward energy finance market transition: Does China’s oil futures shake up global spots market?

China is breaking through the petrodollar system, establishing RMB-dominating crude oil futures market. The country is achieving a milestone in its transition to energy finance market internationalization. This study explores the price leadership of China’s crude oil futures and identifies its price co-movement to uncover whether it truly shakes up the global oil spots market. First, we find that for oil spots under different gravities, China’s oil futures is only a net price information receiver from light-, medium-, and heavy-gravity oil spots, but it has a relatively stronger price co-movement with these three spots. Second, for oil spots under different sulfur contents, China’s oil futures still has weak price leadership in sweet, neutral, and sour oil spots, but it has strong co-movement with them. Third, for oil spots under different geographical origins, China’s oil futures shows price leadership in East Asian and Australian oil spots at the medium- and longrun time scales and strong price co-movement with East Asian, Middle Eastern, Latin American and Australian oil spots. China’s oil futures may not have good price leadership in global spots market, but it features favorable price co-movement.

Economic Analysis of Marketing and Constraints of High Yielding Variety Paddy (HYV) vs. Black Aromatic Paddy (Chakhao) in Imphal East District of Manipur

The present study was undertaken in Imphal East district of Manipur to know the marketing cost, marketing margin, price spread, producer’s share in consumer rupee, marketing efficiency of High Yielding Variety (HYV) paddy and Black aromatic paddy. A total of 120 sample respondents are analysed. Among these 42 are marginal farmers,36 are small farmers,26 are semi medium and 16 are medium farmers .For High yielding variety paddy, in channel I, overall average net price receive by producer is Rs.1885 per quintal and the consumer purchase price is Rs.2000 per quintal. In channel-II, overall average net price receive by producer Rs.1609 per quintal and the consumer purchase price is Rs.3000 per quintal. For Black Aromatic paddy, in channel-I, overall net price received by producer is Rs.6185 per quintal, and the consumer purchase price is Rs.6300 per quintal. In channel-II, overall net price received by producer is Rs.5109 per quintal and the consumer purchase price is Rs.12000 per quintal. Marketing efficiency revealed that for High Yielding Variety paddy (HYV) marketing efficiency of channel-I is high with 16.39. For Black Aromatic Paddy, Marketing efficiency of channel-I is high with 53.78.Farmer should chose for those marketing channels which have lesser intermediaries to get the maximum profits. Price fluctuation, lack of suitable govt. Policy like procurement and market regulation are the major marketing constraints to the sample farmer in study area.

Consolidation in Prescription Drug Markets: Impact on Pricing and Access

We examine the impact of M&A activity between drug manufacturers on drug prices and patient access. We start by collecting detailed information on acquisitions involving companies that sell on-patent branded drugs, covering the 2007–2019 period. We find that approximately one-third of branded drugs are acquired by a different company during their patent terms, but only a few “overlap” acquisitions consolidate ownership of drugs in the same therapeutic area. Next, we use a two-way fixed-effects approach to measure how prices and patient access respond to mergers. We find that all newly acquired drugs experience price growth following acquisitions. However, only those acquired by larger companies see an increase in their effective net price. Drugs involved in overlap acquisitions only see higher price growth if the acquisition was small enough to escape regulatory scrutiny, suggesting that antitrust agencies are imposing effective constraints on potentially anti-competitive agreements.

An Economic Analysis of Marketing Costs, Price Spread and Marketing Efficiency of Milk in the Visakhapatnam District of Andhra Pradesh, India

The present study was undertaken to know the Marketing cost and margins, Price spread, Marketing efficiency of Buffalo and Cow milk. The study has been undertaken in the Paravada block of Visakhapatnam district. A total of 100 sample respondents are analyzed. Among these 55 are small farmers, 34 are medium farmers and 11 are large farmers. For buffalo milk, in channel-I, the overall average net price received by the producer is Rs. 49.43, and the consumer purchase price is Rs.56.07. In channel-II, The overall average net price received by the producer is Rs. 46.34, and the consumer purchase price is Rs.58.55. In channel-III, the net price received by the producer is Rs. 39.23, and the consumer purchase price is Rs.60. For cow milk, in channel-I, the overall average net price received by the producer is Rs. 36.50, and the consumer purchase price is Rs.45.22. In channel-II, The overall average net price received by the producer is Rs.33.93, and the consumer purchase price is Rs.48.87. In channel-III, the net price received by the producer is Rs.30.50, and the consumer purchase price is Rs.50. Market efficiency revealed that for buffalo milk Market efficiency of channel-I is high with 8.4, market efficiency revealed that for cow milk Market efficiency of channel-I is high with 5.18. Farmers should focus on the marketing channels where there are fewer intermediaries and can attain maximum profits. There is a need for an up gradation of the dairying technologies like for milking, usage of milking machines is more sophisticated than following the traditional methods.

An Economic Analysis of Price Spread, Marketing Efficiency and Marketing Cost of Tomato in Prayagraj District of Uttar Pradesh, India

The study was carried out to analyse the price spread, marketing efficiency and marketing cost of tomato. The Prayagraj district of Uttar Pradesh was selected purposively for the study because of the large amount of tomato production. Due to the perishable nature of tomato the farmers couldn’t stock up and had to sale in lean month. So, there wasn’t much difference in marketable and marketed surplus of tomato. The percentage of marketable surplus was highest in medium size farm group i.e., 95.28 percent followed by small farmers with 94.94 percent and large size farmers with 94.02 percent. The average marketable surplus was 320.09 quintals that is 94.75 percent. The average total marketing cost was Rs 800/qtls, the average net price received by the farmers was Rs 2000/qtls the average price spread was Rs 800/qtls, and the average Marketing efficiency was Rs 2.5/qtls.

The Contribution of Price Growth to Pharmaceutical Revenue Growth in the United States: Evidence from Medicines Sold in Retail Pharmacies.

To what extent does pharmaceutical revenue growth depend on new medicines versus increasing prices for existing medicines? Moreover, does using list prices, as is commonly done, instead of prices net of confidential rebates offered by manufacturers, which are harder to observe, change the relative importance of the sources of revenue growth? This study uses data from SSR Health LLC to address these research questions using decomposition methods that analyze list prices, prices net of rebates, and sales for branded pharmaceutical products sold primarily through retail pharmacies. From 2009 to 2019, retail pharmaceutical revenue growth was primarily driven by new products rather than by price increases on existing products. Failing to account for confidential rebates creates a more prominent role for price increases in explaining revenue growth, because list price inflation during this period was 10.9%, whereas net price inflation was 3.3%. Policies that restrict price growth on existing medicines likely need to be coupled with policies that reduce launch prices to have a meaningful long-term impact on pharmaceutical revenue growth. Using pharmaceutical list prices is often an inadequate approximation for net prices because the role of rebates has increased and varies by drug class.

Understanding the conditional out-of-sample predictive impact of the price of crude oil on aggregate equity return volatility

Using monthly data from 1973 through 2020, we explore whether it is possible to improve the accuracy of one-month ahead log-aggregate equity return realized volatility point forecasts by conditioning on various nonlinear crude oil price measures widely relied on in the literature. When evaluating the evidence of unconditional relative equal predictive ability as specified in Diebold and Mariano (1995), we observe that similar to well-known economic variables, such as the dividend yield, the default yield spread and the rate of inflation, we rarely observe evidence of statistical gains in relative point forecast accuracy in favor of the crude oil price-based models. However, when evaluating the evidence of conditionalrelative equal predictive ability as specified in Giacomini and White (2006), we observe that contrary to well-known economic predictors, certain nonlinear crude oil price variables, such as the one-year net crude oil price increase suggested in Hamilton (1996) offer sizable point forecast accuracy gains relative to the benchmark. These statistical gains can also be translated into economic gains.

Is the effect of oil price shock asymmetric on the Indian stock market? Firm-level evidence from energy-intensive companies

PurposeThis paper aims to examine the asymmetric impact of the oil price increase and decrease on stock returns at the firm level.Design/methodology/approachTo ascertain the impact oil price can exert on the stock price at the firm level, this study uses panel structural vector auto regression with various linear and nonlinear measures of oil price shock on a data set, containing 1,168 firms listed in Indian stock markets. This study also considers stock index returns, Fama-French factors and inflation as control variables.FindingsThis paper finds evidence that at firm level, net oil price increase and decrease have an asymmetric impact on stock returns. Other oil price shock measures, namely, shock because of oil price increase and decrease, do not show any sign of asymmetric impact on stock returns.Originality/valueThe comparison of firm-level return on its response towards oil price fluctuation can give valuable insights into a firm’s features.

Gold companies and local economic sustainability: the case of Kalsaka Mining SA in Burkina Faso

ABSTRACT Gold mining is a major source of income and economic growth, but imposes substantial environmental and health burdens on local communities. Estimating the relative economic gains and health costs of mining for local communities is a key step towards ensuring better natural resource management and environmental justice, but remains methodologically challenging. The objective of this article is to analyse the contribution of Kalsaka Mining SA to local economic sustainability during the operating phase (2008–2013). A cost-benefit analysis is used in comparing Kalsaka Mining SA local investment and its environmental damage (health cost) during mine lifetime. The net price method is used to evaluate resources rent from Kalsaka mining site exploitation while human capital approach is considered in health damage estimation. The results indicate that rent invested in the local economy was relatively low compared to health cost, implying that Kalsaka Mining SA contribution was largely insufficient to put the local economy on sustainable path.

Forecasting Stock Price Trends by Analyzing Economic Reports With Analyst Profiles.

This article proposes a methodology to forecast the movements of analysts' estimated net income and stock prices using analyst profiles. Our methodology is based on applying natural language processing and neural networks in the context of analyst reports. First, we apply the proposed method to extract opinion sentences from the analyst report while classifying the remaining parts as non-opinion sentences. Then, we employ the proposed method to forecast the movements of analysts' estimated net income and stock price by inputting the opinion and non-opinion sentences into separate neural networks. In addition to analyst reports, we input analyst profiles to the networks. As analyst profiles, we used the name of an analyst, the securities company to which the analyst belongs, the sector which the analyst covers, and the analyst ranking. Consequently, we obtain an indication that the analyst profile effectively improves the model forecasts. However, classifying analyst reports into opinion and non-opinion sentences is insignificant for the forecasts.

Trends in Prescription Drug Launch Prices, 2008-2021

This study uses SSR Health data on drug list prices and estimated net prices after manufacturer discounts to evaluate trends in prices for newly marketed brand-name prescription drugs in the US from 2008 to 2021.