An Empirical Investigation into the Impact of the Step-Price Model on the Norwegian Pharmacy Market
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- Master of Science 
The pharmacy sector is a crucial part of any nation’s healthcare system. The Norwegian pharmacy market is dominated by three key players, each integrated with their own wholesaler. The step-price model was introduced in 2005, and its core premise was to lower the prices of pharmaceuticals when patented medicines lose their patent and face competition from generic medicines. According to the preparatory works of the current pharmacy law, generic substitution of medicines in pharmacies was moreover implemented to stimulate the competition. This master’s thesis presents an empirical analysis of the Norwegian pharmacy market, focusing on the impact of the step-price model on pharmaceutical prices and market concentration measured by the Herfindahl-Hirschman Index. This study aims to quantitatively measure the effect of the step-price model by comparing it to a control group not affected by the model using a difference-in-differences method. Furthermore, the study analyzes the increase in the number of pharmacies, where we compare the trend of new chain pharmacies versus independent pharmacies. Our study found that while the step-price model was successful in lowering the prices, no significant effect was found on the market concentration.
Masteroppgave(MSc) in Master of Science in Applied economics and business, Economics - Handelshøyskolen BI, 2023