Abstract:

The present paper evaluates the effect of deregulated ownership and horizontal integration on the retail pharmacy market. Using data on the full population of reimbursed prescriptions in Slovakia in 2017, we examine whether outlets of pharmacy chains perform better than their independent counterparts in terms of consumer preferences and operating costs. Our findings indicate that consumers perceive pharmacy chains as having higher quality on average than independent outlets, although there is substantial heterogeneity in the effects, both across chain brands and across consumer types. We do not find evidence for substantial productivity gains due to chain affiliation. Lower average costs appear to be driven by geographic rather than technological factors.

Paper joint with Jakub Červený (Medical University of Vienna and CEPR) and Richard Kališ (University of Economics Bratislava).

For further information please contact giovanna.tramontano@unibocconi.it.