Price Regulation Research Articles

Pharmaceutical pricing and managed entry agreements: An exploratory study on future perspectives in Europe

ObjectivesThis paper illustrates the results of a research aimed at investigating the opinions collected from selected European payers (HTA organisations, authorities/committees assessing, appraising and negotiating drug prices) and experts (researchers/consultants identified through LinkedIn groups) on drug price regulation, managed entry agreements, transparency and HTA advice. MethodsExpert and payer opinions were gathered through a structured questionnaire, validated by three potential respondents and self-administered online between July and November 2021. ResultsRespondents totalled 39 (response rate 29%). The response rate was higher among the experts than the payers. Respondents mostly agreed that price regulation should award drug value through a multiple criteria approach (21 respondents) or cost-effectiveness evidence (14). For most respondents the added therapeutic value and the comparative safety profile should be the main drivers of a premium price. A quite high proportion of respondents supported the use of cost-effectiveness, and suggest relying on the perspective of the health care system. Most respondents expect larger diffusion of outcome-based and financial-based managed entry agreements in the future. Finally, respondents advocated for higher transparency of the negotiation process rather than net price transparency, and expressed the belief that HTA advice could be useful in reaching consensus on the level of unmet need, the comparators to consider, and the dimension of the target population. ConclusionsDespite the limited number of respondents, the paper provides very interesting exploratory insights into much-debated topics related to drug price regulation. The opinions of European payers and experts are very useful for future regulation of drug pricing in Europe. Public interest summaryOur research aimed at gathering the opinions of payers and experts on drug price regulation. The main findings are that pricing should reflect the value of medicines, that a premium price should be awarded only to those drugs that provide for an added therapeutic value and/o a better safety profile, even if other value dimensions (patient preferences and organisational impact) should be not disregarded. Experts and payers expect a larger role of managed entry agreements in the future, despite they may impose an important administrative burden. Finally, transparency of price negotiation is prioritized compared to net price transparency.

Is market power the cause of asymmetric pricing in China's refined oil market?

The asymmetric response of Chinese refined oil prices to crude oil prices is essentially an issue of economic efficiency, and the collusion of the oil oligarchs is not conducive to the market-oriented reform and economic sustainability. The purpose of this paper is to test whether the prices of refined oil products in China does indeed have the asymmetric fluctuations of “rising more and falling less”, and to analyze whether there are unreasonable pricing behaviors colluding among oil companies. We first examine the relationship between refined oil prices and the crude oil price by applying the NARDL using the monthly data from June 2000 to May 2021, and then designs a two-stage regression process based on the EGARCH model to check whether the asymmetric pricing is the result of the market power formed by the oligopolistic collusion. The results show that the asymmetric reaction of gasoline and diesel prices to crude oil prices in China is basically the same. Only the long-run asymmetry has been confirmed while the short-run asymmetry has not passed the test. The long-term equilibrium price amid fluctuations in Chinese refined oil prices is slowly being pulled higher, most likely due to the increased market power of oil companies. Long term asymmetry means that the oligopoly market equilibrium is approaching monopoly. The cause is in the refining segment of refined oil, not in the retail segment because the EGARCH model has only successfully identified the market power in the refining sector. The joint tests indicate that the oil oligarchs may have passed the cost information, which is conducive to raising prices in the long term, to the price regulators, and there is an unreasonable part of China's refined oil prices that undermine market efficiency.

Put an eye on the future: Rethinking the theoretical price of fossil energy based on the perspective of intergenerational equity

Discovering the true value of fossil energy resources can make full use of the price regulation leverage to adjust the energy structure, relieve carbon emissions, and gain more time for renewable energy to replace fossil energy. As exhaustible resources, the exploitation and consumption of coal, oil, and natural gas can directly affect the environment and resources reserve of future generations, which will directly destroy the fairness of intergenerational transmission. To make the price of fossil resources work better, the theoretical energy prices composed of production costs (PC), user costs (UC), environmental costs (EC), and especially intergenerational compensation costs (IC) are taken into consideration in this study. In addition, the study probes the impact of the theoretical and actual prices of fossil energy resources on carbon intensity with the path analysis method and detects the key paths. Results show that the theoretical price of natural gas is compensated the most, followed by coal and oil. From the result of intergenerational equity, the theoretical prices of coal and oil have higher impacts on carbon intensity than their actual prices, while the condition of natural gas is not the same. It is necessary for decision-makers to fully consider the characteristics of environmental damage, scarcity, and especially intergenerational compensation when repricing coal and oil price. Fortunately, the actual price of natural gas is the most effective for realizing the intergenerational equality target. It is crucial to put an eye on the future in reexamining fossil energy prices and formulating relevant emission reduction policies.

Assessing the Sustainability of NTFP-Based Community Enterprises: A Viable Business Model for Indonesian Rural Forested Areas

Indonesia’s vast forested areas have the potential to serve as a crucial source of livelihood for local communities. However, the current contributions of these forests to community livelihoods are significantly underutilized in comparison to their potential. This study evaluates the financial performance and sustainability of community forest-based businesses operating around the forest management area of the Lakitan-Bukit Cogong forest management unit (LBC FMU). Data were collected through semi-structured and in-depth interviews with the key informants through purposive sampling. Financial viability analysis and a qualitative approach were used to assess the feasibility of the businesses. The findings revealed that all businesses show positive values for all financial indicators. From profit estimation and value-added distribution, all products are shown to be feasible. Concerning the value and supply chain, the rubber-processing industry has a remarkable flow. Moreover, small forest enterprises (SFEs) highlight natural capital optimization through multitudinous derivatives of products that could support a substantial regenerative economy, including citronella essential oil, native honeybees, rubber-based product, biochar, skewers, and liquid smoke. In addition, the multidimensional scaling and rapid appraisal for forest (MDS-RAPForest) approach generates a result based on multiple dimensions (ecology, economics, social and human resources, and institutional and administrative dimensions) showing that overall, SFEs are categorized as sufficient/quite sustainable. Furthermore, mainstreaming adaptable forest-based enterprises, jurisdiction approaches, and cross-production system strategies are also discussed. Our findings suggest that sustainable NTFP-based activities within a community context can be facilitated through interconnected market systems, appropriate price regulations, and support from stakeholders and legal frameworks.

Legal Issues of Execution of Export and Import Commercial Contracts for Cross-Border Transportation of Hydrocarbons in the Arctic Taking into Account the Sanctions Factor

The paper discusses the problems of execution of contracts for exploration, oil production, and transportation of hydrocarbons in the Arctic amid enormous sanctions pressure that the oil and gas industry is experiencing today. The aper demonstrates the impact of blocking restrictions, which negatively affected export and import contracts. Recent international agreements have been in a particularly vulnerable position. Emerging risks can shake the debt sustainability of a transaction. Their alienation immediately reveals commercial risks. A transaction made in favor of a creditor, as it seems, should burden such risks. However, it is not easy to determine the forecast values of expenses from the acquisition, assignment of rights to oil production, transportation of refined products due to debt repayment. There is an opportunity to take advantage of industry and corporate import substitution plans, especially in the field of crude oil exports, thereby resisting these risks. Meanwhile, the system of business and legal norms still constitutes a vast field of risks. They change in time, in space, due to price regulation, but also against the background of traditional law enforcement – the search for beneficial owners. Sectoral restrictions already imply facilitation of institutional risk. The author applies a systematic approach – from particular cases of manifestation (of risks), whether they are uncompensated costs as part of the network infrastructure and to a causal relationship with derivatives, non-revolving financial instruments. It is noted how difficult it is then to execute settlement forward contracts if the limits of price fluctuations for these contracts are exceeded many times. The importance of restorative requirements, mandatory in this regard, is emphasized. Russia’s response to the sanctions is to deepen reorientation of hydrocarbon flows from the West to the East. This explains generalization of the role of the Northern Sea Route, based on the assessment of available resources, plans for the re-equipment of ports according to their specialization and depending on the requests of different levels of consumers.

The Legal Framework of the Mandatory Cap on Market Revenues for Electricity Producers and the Solidarity Contribution in the Czech Republic and Slovakia

On 6 October 2022, the Council of the European Union adopted Regulation 2022/1854 on an emergency intervention to address high energy prices (Regulation 2022/1854). Regulation 2022/1854 establishes an emergency intervention to mitigate the effects of high energy prices through exceptional, targeted, and time-limited measures aiming to ensure the necessary solutions and respond to the current energy situation. For this purpose, three groups of measures are introduced: (i) measures aiming to reduce energy consumption, (ii) introducing a mandatory cap on market revenues for electricity producers, and (iii) introducing a solidarity contribution to be imposed on crude petroleum, natural gas, coal, and refinery companies. In this paper, the authors focus on the legal framework adopted in the Czech Republic and in Slovakia to introduce the mandatory cap on market revenues to electricity producers as well as the solidarity contribution.

HPR57 Evidence Demonstration Framework for Medicare Part B and D Products Subject to Inflation Reduction Act (IRA) Price Regulations

The Inflation Reduction Act (IRA) of 2022 enacts a drug price reform allowing the government to negotiate prices of drugs covered under Medicare Parts B and D. Combined with cost-effectiveness reviews by the Institute for Clinical and Economic Review (ICER), the IRA may have a long-term impact on U.S. drug pricing. The objective of this study was to leverage the value framework employed by ICER to determine the best approach for manufacturers subjected to the IRA law during price negotiations.

KEKUATAN PASAR DALAM PERDAGANGAN BERAS DI KOTA TASIKMALAYA

Inflation occurs in food prices, especially rice, which is related to price formation at final consumer level. Market institution adjust their behavior in the face of the market structure. This study aims to analyze existence of market power in the formation of rice prices at the end -consumer level. The data used is weekly price of rice according to quality during the 2019 - 2022 period in Tasikmalaya City. Data analysis was performed using error correction model. Results of the analysis show that there is market power in four of the six qualities of rice traded in Tasikmalaya City. Price setting at various price qualities traded at the retail level is also necessary as an effort to prevent significant price changes such as price regulation at the producer level. Keywords: rice, behavior, market power

Southern politics, southern power prices: Race, utility regulation, and the value of energy

AbstractFor many middle‐income households, paying the electricity bill is a mundane, even mindless, act. But for an ever‐increasing number of low‐income families, the electricity bill—filtered through the racialized materiality of poor‐quality housing stock and antidemocratic price regulation—represents something more ominous: looming disconnection, eviction, and a deep spin of vulnerabilities. This article explores the materiality of race in the US South through the prism of southern utilities and maps the political landscape on which contestations over the value of energy are taking place. I ask, how do different conceptualizations of value by utilities, regulators, and energy justice advocates figure into the price of energy and racialized dispossession in the Deep South? I draw attention to the highly elaborated narrative politics of the value of Georgia Power's energy. In conversation with recent anthropological debates about value and “the just price,” I argue that Georgia Power's monopoly on public power engages and reinforces the racialized political economy of the South to produce high home energy prices for low‐income families. But it also provokes a decryption of these energy prices by energy justice advocates that connects the silent violence of energy injustice to people's everyday experiences of extractive utility bills.

РЕГУЛЮВАННЯ ДІЯЛЬНОСТІ ЗАКЛАДІВ ЗАГАЛЬНОЇ СЕРЕДНЬОЇ ОСВІТИ: ФІНАНСОВИЙ АСПЕКТ

The purpose of the presented work is to determine the main components of the process of regulating the activities of general secondary education institutions, as well as the main characteristics of the financing process. The main role of the components of the management process in institutions of general secondary education and the components of financial support are determined. The main research methods are: analysis and synthesis - to determine the main components of the process of regulating the activities of general secondary education institutions, methods of deduction and induction - to determine the main aspects of financial support for the activities of general secondary education institutions, graphic method - to visually present the results of the study. Regulation of the activities of general secondary education institutions is an important element of ensuring quality education and sustainable development of the educational system. The state, as the main regulator, establishes the regulatory framework and standards for the functioning of educational institutions, as well as provides funding to ensure the availability and quality of education. The main areas of regulation of general secondary education institutions include: regulatory and legal regulation, financing, quality standards, monitoring and evaluation, personnel development, infrastructure and material and technical support. All these aspects of regulation contribute to the creation of a favorable environment for the development of general secondary education institutions, increasing their efficiency and ensuring the quality of education and upbringing of students. Regulatory policy should be aimed at ensuring the sustainable development of education, taking into account the modern challenges of society and the needs of the labor market. It is important that regulation is flexible and adaptable to changing conditions, providing general secondary education institutions with the opportunity to respond effectively to new challenges and to innovate. Regulation of the activities of institutions of general secondary education includes a number of financial aspects that affect their functioning, development and the quality of the education provided. Financial support is one of the key factors that determines the effectiveness of the educational process and the development of general secondary education institutions. The main aspects of the financial regulation of the activities of general secondary education institutions are defined: state funding. The government allocates budget funds to ensure the functioning and development of general secondary education institutions. State funding ensures the basic level of provision of educational services and infrastructure needs of institutions; regulation of tariffs and prices. The state can regulate the level of tuition fees in institutions of general secondary education to ensure the availability of education for different sections of the population; financial control. Institutions of general secondary education are subject to financial control by state inspection bodies, which allows for effective and economical use of budget funds; investment attraction. General secondary education institutions can attract additional funds from external sources, such as grants, sponsorships, donations, etc. This allows to increase financial resources and implement new projects and programs; financial support of educational programs. The state can provide financial support to individual educational programs and initiatives aimed at improving the quality of education and development of institutions; formation of budgets: General secondary education institutions form their budgets, taking into account needs and profitability, as well as the goals and objectives facing them. The financial aspect of regulating the activities of institutions of general secondary education is important for ensuring the stability of their work, improving the quality of education and ensuring accessibility for all segments of the population.

Multi-agent interaction of source, load and storage to realize peak shaving and valley filling under the guidance of the market mechanism

In the construction of new power system, traditional methods and capabilities for regulating the power grid are no longer applicable due to the increasing types and quantities of source, load and storage agents. Currently, research on the participation of these agents in the electricity market has mainly focused on either traditional power systems or the demand side, without exploring the potential interaction between them. To address this issue, this paper proposes a real-time pricing regulation mechanism that incorporates source, load and storage agents into regulation. This mechanism is suitable for new power systems and satisfies the interests of the agents while meeting the needs of grid regulation. Specifically, it is based on time-of-use and real-time pricing regulation mechanisms. In a simulated scenario of load shifting, the proposed pricing regulation mechanism effectively meets the grid regulation requirements and improves the stability of grid operation. Overall, this approach offers a promising solution for the regulation of new power system with diverse and complex agents.

Primary fossil energy cost and price regulation in energy processing sectors---the perspective of price regulation market with Chinese characteristics

All enterprises in the field of energy processing in China are state-owned enterprises (SOEs), and the government regulates the prices of their products. China's SOEs have multiple objectives, so the market is not mimic a simple oligopoly market. Energy processing sectors are the links between primary fossil energy and the economy. We apply a dynamic recursive computable general equilibrium model with multi-sectors and multi-households, named CEEEA/CGE model, to simulate and analyze the impact of primary fossil energy cost changes and what will happen if prices are regulated in these energy processing sectors. These results underscore the role of price regulation in energy processing sectors: the regulation seems to stabilize the economy. It will reduce the impact of rising and falling energy costs, whether the impact is good or bad. Other findings are: 1) “resource curse” is spotted when the primary energy cost is reduced dramatically. 2) CPI only increases by a little, even if the primary energy costs increase significantly. 3) The economic impact of the changes in fossil energy costs is asymmetric.

Optimal Long-Term Health Insurance Contracts: Characterization, Computation, and Welfare Effects

Abstract Reclassification risk is a major concern in health insurance where contracts are typically 1 year in length but health shocks often persist for much longer. While most health systems with private insurers pair short-run contracts with substantial pricing regulations to reduce reclassification risk, long-term contracts with one-sided insurer commitment have significant potential to reduce reclassification risk without the negative side effects of price regulation, such as adverse selection. We theoretically characterize optimal long-term insurance contracts with one-sided commitment, extending the literature in directions necessary for studying health insurance markets. We leverage this characterization to provide a simple algorithm for computing optimal contracts from primitives. We estimate key market fundamentals using data on all under-65 privately insured consumers in Utah. We find that dynamic contracts are very effective at reducing reclassification risk for consumers who arrive at the market in good health, but they are ineffective for consumers who come to the market in bad health, demonstrating that there is a role for the government insurance of pre-market health risks. Individuals with steeply rising income profiles find front-loading costly, and thus relatively prefer ACA-type exchanges. Switching costs enhance, while myopia moderately compromises, the performance of dynamic contracts.

Conceptualising the Behaviour of MNEs, Tax Authorities and Tax Consultants in Respect of Transfer Pricing Practices – A Three-Layer Analysis

Abstract This study explores the decision-making behaviour of economic actors in relation to transfer pricing by applying a three-layer practice theory. A critical review of the literature using snowball sampling and a thematic analysis of interview data from the Ministry of Finance, tax consultants and the Zimbabwe Revenue Authority bring to light novel conceptualisations and perspectives on the transfer pricing phenomenon. This study addresses scholarly gaps by exploring a confluence of legal, implementation and exploitative dimensions in transfer pricing regulation. The study also makes a novel contribution by proposing a model that could be useful to policymakers and tax authorities in ameliorating tax avoidance through transfer pricing.

Pricing as a Means of Ensuring the Availability of Paid Medical Services

The article concludes that the availability of paid medical services is determined by their cost, in connection with which the study of the issue of pricing is updated. The classification of prices according to the degree of regulation was used for the study. It was found that paid medical services are subject to such methods of price regulation as free price, fixed price or tariff, regulated price, recommended price. When setting the cost of the vast majority of paid medical services, a free price is applied, which does not fully guarantee the availability of paid medical services to citizens. The author proposes a system of measures aimed at ensuring the availability of paid medical services in terms of pricing.

Políticas públicas como factor protector del consumo de alcohol en universitarios mexicanos

IntroductionIn environments where public policies regulating alcohol consumption are stricter, alcohol consumption decreases, by virtue of reduced availability, marketing, and price regulation of alcoholic beverages. ObjectiveTo determine the relationship and effect of the perception of policies to reduce alcohol-related problems with alcohol consumption and the four prevalence of alcohol consumption in young Mexican university students. MethodologyA descriptive, correlational and predictive study with a sample of 367 students from a public university in the state of Tabasco, Mexico, selected by stratified random probability sampling. A Personal Data and Prevalence of Alcohol Consumption Questionnaire, the Scale of Support for Public Policies to Reduce Problems Associated with Alcohol and the Alcohol Use Disorder Identification Test (AUDIT) were used. The study adhered to the provisions of the Regulations of the General Health Law on Research. ResultsThe general index of perception of public policies was negatively and significantly related (rs=−.34, P<.001) with alcohol consumption and with the three types of consumption, low risk, dependent and harmful. Perception of harm reduction public policy (B=−.356, P<.001) was identified as a predictor of alcohol consumption in college youth. The general index of perception of public policies has a protective effect on current and instantaneous prevalence (OR=.98), likewise the pricing policy has a protective effect on the four prevalence of alcohol consumption. ConclusionThe general perception of public policy, as well as the perception of harm reduction policies are predictor of alcohol consumption in young university students, therefore, these should be clear and widely known by this population, to facilitate compliance and have the expected effect.

English

The rampant practice of self-medication is indicative of very strong existing push and pulls factors. These factors could be economic, social or systemic. Despite having some beneficial effects, self-medication has life-threatening consequences. This study was aimed to determine the factors which push users to medicine sources or factors at the sources which pull users. A pre-validated questionnaire was administered to participants. Data were collected and analyzed using Microsoft Excel and the results expressed as frequencies and percentages. From the total of 650 respondents, poverty was found to be the major push factor for 360 participants (55.39%), followed by unprofessionalism, friends&rsquo; advice, previous use of medicine, lack of time, and poor price regulation as others. Low cost of medicines was found to pull 402 (61.8%) users to sources of medicines for self-medication. More than 300 of the respondents found easy access to medicine and advertising as strong pull factors. Other important pull factors include quick and time-saving, proliferation of medicine vendors, hospital crowds, and inadequate prescription checks at sources of medication. Poverty is a major push factor for self-medication, further compounded by quick access to illicit sources of medication. Consequently, users get pulled to cheaper sources, which unfortunately sell poor quality medicines, lack the expertise, or do not check prescription. Price control is required to ensure that quality medicines are accessible to users. Imposing physician prescription at all medicine sales points is a crucial step to fight the deleterious consequences of self-medication. Although self-medication has some positive elements, its practice needs to be put under control to avoid grappling with long term health complications. Key words: Self-medication, self-treatment, push factors, pull factors.

Regional revenues of solar and wind generation in Texas

Effective regulatory policies, ample renewable energy potential, and a favorable business climate have led to a boom in wind farms and solar energy projects in Texas. Using a large sample of 15-min data for the six-year period of 2016–2021, we analyze per MWh revenues from solar generation and wind generation in the renewable regions of the Electric Reliability Council of Texas (ERCOT). We find that average regional revenues from variable renewable energy (VRE) for the daytime hours of 07:00–19:00 exceed the average levelized price of recently signed solar and wind power purchase agreements (PPAs), although average regional revenues for wind generation for the nighttime hours of 19:00–07:00 were lower than recent PPA prices. Moreover, VRE's 15-min regional revenues move with ERCOT's cap on the real-time market's energy price offers, regulatory price adder, daily wholesale natural gas price, 15-min nuclear energy generation, 15-min system load, 15-min regional solar energy and 15-min regional wind energy. While continued VRE development may suppress wholesale market prices, continued growth in electricity demand and increasing natural gas prices provide offsetting effects. Nevertheless, new policies are under development to mitigate the adverse effects of further VRE development on grid reliability and generation investment incentive.

The attractiveness of syngas production from forest-based biomass for pulp mills considering carbon pricing and government regulations

While transition to renewable energy and cleaner technologies has been promoted by many governments around the world through incentives and subsidies, some renewable projects fail due to various reasons. Investigation into these reasons would benefit current and future projects. This study focuses on the renewable project of producing syngas from forest-based biomass at a Kraft pulp mill to displace natural gas that fuels their lime kiln. We build on the feasibility study done for the same project by Khadivi and Sowlati [45], who showed despite having a positive net present value and a three-year payback period, the syngas price and escalating carbon tax would result in negative cashflows halfway through the project’s lifetime. This was unacceptable by the pulp mill. Regardless of financial outcomes, the project could benefit from valorization of abundant biomass supply through a gasification technology with acceptable readiness level while providing emission reductions, diversified product portfolio, additional revenue, and employment opportunities. Thus, further investigation is valuable to discover the possible changes in syngas or carbon price that would make this project acceptable. In this paper, an optimization model is developed that determined a syngas price of 27.5 ($ per GJ) increasing by $0.49 every year would be optimal as it makes all cashflows positive while minimizing the total syngas purchase cost for the gas utility. Also, to improve the syngas supply chain efficiency, a bi-objective optimization model is presented that maximizes the savings in costs and emissions when prescribing optimum monthly procurement, storage, and preprocessing decisions.

New German Transfer Pricing Regulations on Business Restructurings, Documentation Deadlines and Rules for Tax Audits: Overview and Practical Implications

Two highly relevant pieces of transfer pricing legislation have been passed in Germany in 2022: The revised Ordinance on Relocation of Functions is expected to increase the number of fact patterns that can qualify as a relocation of functions and it contains stricter rules for exit tax valuation approaches. The revised General Tax Code aims at expediting tax audit processes in Germany by intensifying the system of cooperation most notably via introducing new and adjusted deadlines for tax auditors but also for taxpayers. These are expected to lead to additional pressure on taxpayers and will likely require better transfer pricing documentation processes as well as a higher level of anticipation of potential tax audit questions.