Eric Yde

Ph.D. Candidate in Economics

University of Virginia

Email: edy9g at virginia dot edu

I am a Ph.D. candidate in Economics at the University of Virginia. My research interests are in empirical industrial organization and the economics of healthcare markets. I study vertical contracting and regulations in the context of prescription drug markets.

I received my B.A. in Economics from the University of Rochester. Prior to graduate school, I was a Senior Economist in the antitrust practice of Compass Lexecon.

Research

The Effect of Price Caps on Pharmaceutical Advertising: Evidence from the 340b Program (with Sylvia Hristakeva and Julie Holland Mortimer)

Revise and Resubmit at Management Science

We study the effect of price caps on the provision of costly effort by pharmaceutical firms using variation in drug discounts generated by a price regulation program that allows eligible hospitals to purchase outpatient drugs at steep discounts. These discounts directly affect drug manufacturers’ markups, and may change firms’ incentives to exert promotional effort targeted towards physicians at these hospitals. We find that the effects of price regulation on pharmaceutical firm effort depend crucially on the design of the regulations. Using detailed data on marketing payments from pharmaceutical firms to physicians, we observe that physicians receive 12% fewer promotional payments after their hospitals take up the program. The design of the price caps imply that discounts tend to increase with a drug’s age. Consistent with theoretical predictions, we find that pharmaceutical firms shift promotional payments away from older drugs and towards newer drugs, which are less affected by the price caps

Invited Presentations: ASHEcon 2024

WORKING PAPERS

Regulating Vertical Relationships in Prescription Drug Markets: Evidence from Medicaid

I study the price effects of requiring PBMs and insurers to replace their default fixed-price contracts with cost-plus contracts. Using difference-in differences methods, I find that Medicaid pre-rebate drug prices declined by an average of 17% in states that prohibited fixed-price contracting. The estimated price effects were driven by generic drugs, with slight increases in branded drug prices. These findings are consistent with cost-plus contracts reducing the ability of PBMs to profit off of asymmetric information regarding the true cost of drugs when negotiating compensation with insurers, but also inducing some PBM moral hazard by removing their profit incentives to contain costs. I also detect larger price decreases in states that rely more heavily on insurers that are not vertically integrated with a PBM. In markets where PBMs have strong informational advantages over non-integrated insurers, cost-plus contracts may be an effective means of reducing drug spending.

Invited presentations: ASSA Annual Meetings (HERO Session)

Eric Yde

The Effect of Price Caps on Pharmaceutical Advertising: Evidence from the 340b Program (with Sylvia Hristakeva and Julie Holland Mortimer)

WORKING PAPERS

Regulating Vertical Relationships in Prescription Drug Markets: Evidence from Medicaid

Vertical Integration and Regulated Profits in Prescription Drug Markets

Competition and Externalities in the Wholesale Prescription Opioid Market (with Justin Garrison and Ashwin Nair)

WORKS IN PROGRESS