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China adopted a market-based pricing mechanism for petroleum products to improve the economic efficiency of resource allocation, thereby exposing its macroeconomy to higher shocks in world crude oil price volatility. To address the WCOP volatility, the price of petroleum products is subject to government regulations. However, the macroeconomic effects of PPP regulations are yet to be studied thoroughly. Accordingly, this study first quantifies the degree of PPP regulation using a “profit + cost” model, followed by the filtration of the macroeconomic impacts of fiscal and monetary policies and then analyzes the economic effects of PPP using an SVAR model. Furthermore, a counterfactual analysis is conducted to verify the results. It was found that PPP regulation could alleviate the shock of WCOP volatility on industrial value-added, finished fixed asset investment, and the producer price index. These findings provide a deeper understanding of the macroeconomic effects of PPP regulations and provide policymakers with new information on the necessity of PPP regulations.

Prices are regulated in many markets, ranging from healthcare to labor to telecommunications. This paper reinterprets the variables in the basic supply–demand model so that both product-definition and quantity are equilibrium outcomes. Specifically, compliance with price controls is achieved by altering the production-factor mix along the supply chain. This approach yields surprising insights into the incidence of price regulations and their effects on the amount of trade. Furthermore, it reveals how many of the short-run effects of price controls can be opposite of what they are in the long run. The supply-chain framework also easily represents business-to-business price controls, which have been more prevalent in policy practice than price-theoretic analysis.

This paper investigates price-cap regulation of an airport where the airport facility (e.g. runway) is congested and airlines have market power. We show that when airport congestion is not a major problem, single-till price-cap regulation dominates dual-till price-cap regulation with respect to optimal welfare. Furthermore, we identify situations where dual-till regulation performs better than single-till regulation when there is significant airport congestion. For instance, when the airport can cover the airport costs associated with aeronautical services simply through an efficient aeronautical charge then dual-till regulation yields higher welfare.

As the demands of some important products such as oil, gas, and agricultural commodities are disrupted, the government often regulates the retail price that includes impositions of a price ceiling and a price floor. In this paper, we analyze the coordination of a supply chain with a dominate retailer under the government price regulation policy by a revenue sharing contract after demand disruption. First, we characterize the optimal decisions of the supply chain under normal circumstance by the revenue sharing contract as a benchmark. Then, when the demand is disrupted, we redesign the contract to coordinate the supply chain and obtain the corresponding revenue sharing contract in different scenarios. Finally, we give some numerical examples to illustrate our theoretical results and explore the impacts of government price regulations on the coordination mechanism.

This paper has two primary objectives. First, it contributes to the literature on oil stabilisation funds and price controls by examining how such a fund is used to regulate market prices in the developing country of Vietnam. Second, it employs descriptive statistics and a standard GARCH methodology to investigate whether the fund, which operates as a form of price control, can effectively reduce domestic price volatility. The results show that the oil price stabilisation fund failed to achieve its intended goal. Considering the administrative costs and other negative impacts associated with the fund, a more market‐ oriented approach, potentially combined with a price‐elastic tax system, is recommended for determining domestic oil prices.

This paper takes up the debate whether price-cap regulation of airports should take the form of single-till or dual-till regulation. The contribution is to model single- and dual-till regulation, evaluate their welfare implications, and compare them to Ramsey charges. We show that single-till regulation dominates dual-till regulation at non-congested airports with regard to welfare maximization. However, none of them provides an airport with incentives to implement Ramsey charges. A Ramsey optimal price-cap regulation, which achieves this goal, is also presented. [PUBLICATION ABSTRACT]

BackgroundIn October 2012, the Chinese government established maximum retail prices for specific products, including 30 antineoplastic medications. Three years later, in June 2015, the government abolished price regulation for most medications, including all antineoplastic medications. This study examined the impacts of regulation and subsequent deregulation of prices of antineoplastic medications in China.MethodsUsing hospital procurement data and an interrupted time series with comparison series design, we examined the impacts of the policy changes on relative purchase prices (Laspeyres price index) and volumes of and spending on 52 antineoplastic medications in 699 hospitals. We identified three policy periods: prior to the initial price regulation (October 2011 to September 2012); during price regulation (October 2012 to June 2015); and after price deregulation (July 2015 to June 2016).ResultsDuring government price regulation, compared with price-unregulated cancer medications (n=22, mostly newer targeted products), the relative price of price-regulated medications (n=30, mostly chemotherapeutic products) decreased significantly (β=−0.081, p<0.001). After the government price deregulation, no significant price change occurred. Neither government price regulation nor deregulation had a significant impact on average volumes of or average spending on all antineoplastic medications immediately after the policy changes or in the longer term (p>0.05).ConclusionCompared with unregulated antineoplastics, the prices of regulated antineoplastic medications decreased after setting price caps and did not increase after deregulation. To control the rapid growth of oncology medication expenditures, more effective measures than price regulation through price caps for traditional chemotherapy are needed.

Background In India, due to a lack of population-level financial risk protection mechanisms, the expenditure on healthcare is primarily out-of-pocket in nature. Through Drug Price Control Orders (DPCOs), the Indian Government attempts to keep medicine prices under check. The aim of this study was to measure the potential impact of DPCO 2013 on the utilization of antibiotics under price regulation in India using large nationally representative pharmaceutical sales data. Methods We used interrupted time series analysis, a quasi-experimental research design to estimate the impact of DPCO 2013 on the utilization of antibiotics in the private sector in India. Indian pharmaceutical sales data set, PharmaTrac from a market research company—All Indian Origin Chemists and Distributors Limited—was used for the study. The data are collected from a panel of around 18,000 stockists across 23 different regions of the country. The primary outcome measure is the percentage change (increase or decrease) in the sales volume of the antibiotics under DPCO 2013, measured in standard units (SUs). Results Our estimates suggest that post-intervention (after notification of DPCO 2013) there was an immediate reduction (level change) in the sales of antibiotics under DPCO 2013 by 3.7% ( P  > 0.05), followed by a sustained decline (trend change) of 0.3% ( P  > 0.05) as compared to the pre-intervention trend at the molecule level, but both changes were statistically insignificant. However, in terms of ‘average monthly market share,’ the DPCO 2013 notification resulted in a sharp reduction of 579% ( P  < 0.05) (level change) followed by a sustained increase of 9.5% ( P  > 0.05) (trend change) in the ‘market share of antibiotics under DPCO’ as compared to pre-intervention trend. Conclusions The impact of DPCO 2013 in terms of the overall increase in the utilization of antibiotics under price regulation was limited but there was a switch from non-price controlled antibiotics to price regulated antibiotics (notified under DPCO 2013). We argue that policies on price control need to be complemented with continuous monitoring of market behavior to have a measurable and long-term impact.

The policy debate about price, value, and innovation in pharmaceuticals is at a critical stage for the NHS. Claxton and colleagues describe the key principles of value based pricing and consider some of the concerns about such a scheme

This paper finds that the use of price controls has a statistically and quantitatively important effect on the extent and timing of the launch of new drugs. Firms headquartered in countries that regulate price reach fewer markets than those in countries without price controls. Companies avoid price-controlled markets, and are less likely to introduce products in additional markets after entering a price-controlled country. Launches into low-price European countries are further delayed following legalization of parallel imports. The results suggest that price regulation in one country affects entry into other countries, and may affect the strategies of domestic firms.