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Prescription Drug Advertising and Patient Compliance: A Physician Agency Approach

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Author Info
Olivier Armantier (Université de Montréal)
Soiliou Namoro (University of Pittsburgh)

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Abstract

This paper proposes an analysis of both doctors and patients' behavior in an agency model that accounts for the interplay between two highly debated health issues: drug advertising toward doctors and/or patients, and the serious problem of patients' noncompliance with their doctors' prescriptions. Due to the lack of individual data, we propose a structural approach inspired from the industrial organization literature. The model is estimated semiparametrically with product level data on the U.S. market for anti-glaucoma drugs. The results suggest that doctors' prescriptions are directly influenced by the probability of noncompliance, as well as advertising aimed at both doctors and patients. Advertisement toward patients (respectively, doctors) appears to have contributed to (respectively, slowed down) the reduction of the estimated average noncompliance rate.

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Publisher Info
Article provided by Berkeley Electronic Press in its journal Advances in Economic Analysis & Policy.

Volume (Year): 6 (2006)
Issue (Month): 1 ()
Pages: 1545-1545
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Related research
Keywords: direct-to-consumer advertising prescription compliance structural econometrics semiparametric estimation

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Find related papers by JEL classification:
I10 - Health, Education, and Welfare - - Health - - - General

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Toshiaki Iizuka & Ginger Zhe Jin, 2005. "The Effect of Prescription Drug Advertising on Doctor Visits," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 14(3), pages 701-727, 09. [Downloadable!] (restricted)
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    Other versions:
  3. Axel Dreher & Christos Kotsogiannis & Steve McCorriston, 2004. "Corruption Around The World: Evidence From A Structural Model," Public Economics 0406004, EconWPA. [Downloadable!]
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  4. Lemieux, Thomas & Fortin, Bernard & Frechette, Pierre, 1994. "The Effect of Taxes on Labor Supply in the Underground Economy," American Economic Review, American Economic Association, vol. 84(1), pages 231-54, March. [Downloadable!] (restricted)
  5. Giles, David E A, 1999. "Measuring the Hidden Economy: Implications for Econometric Modelling," Economic Journal, Royal Economic Society, vol. 109(456), pages F370-80, June. [Downloadable!] (restricted)
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  6. Angel Alañón & M. Gómez-Antonio, 2005. "Estimating the size of the shadow economy in Spain: a structural model with latent variables," Applied Economics, Taylor and Francis Journals, vol. 37(9), pages 1011-1025, May. [Downloadable!] (restricted)
  7. Guerre, E. & Perrigne, I. & Vuong, Q., 1995. "Nonparametric Estimation of First-Price Auctions," Papers 9504, Southern California - Department of Economics.
  8. Berry, Steven T, 1990. "Airport Presence as Product Differentiation," American Economic Review, American Economic Association, vol. 80(2), pages 394-99, May. [Downloadable!] (restricted)
  9. Rizzo, John A, 1999. "Advertising and Competition in the Ethical Pharmaceutical Industry: The Case of Antihypertensive Drugs," Journal of Law & Economics, University of Chicago Press, vol. 42(1), pages 89-116, April.
  10. Donald, S.G. & Paarsch, H.J., 1992. "Maximum Likelihood Estimation in Empirical Models of Auctions," UWO Department of Economics Working Papers 9211, University of Western Ontario, Department of Economics.
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  12. Aviv Nevo, 2000. "A Practitioner's Guide to Estimation of Random-Coefficients Logit Models of Demand," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 9(4), pages 513-548, December. [Downloadable!] (restricted)
  13. Puneet Manchanda & Dick Wittink & Andrew Ching & Paris Cleanthous & Min Ding & Xiaojing Dong & Peter Leeflang & Sanjog Misra & Natalie Mizik & Sridhar Narayanan & Thomas Steenburgh & Jaap Wieringa & M, 2005. "Understanding Firm, Physician and Consumer Choice Behavior in the Pharmaceutical Industry," Marketing Letters, Springer, vol. 16(3), pages 293-308, December. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Anna Merino, 2003. "Demand for Pharmaceutical Drugs: A Choice Modelling Experiment," Economics Working Papers 704, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
  2. Anna Merino, 2003. "Demand for Pharmaceutical Drugs: A Choice Modelling Experiment," Working Papers, Research Center on Health and Economics 704, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
  3. Chad Meyerhoefer & Samuel Zuvekas, 2008. "The Shape of Demand: What Does It Tell Us about Direct-to-Consumer Marketing of Antidepressants?," Advances in Economic Analysis & Policy, Berkeley Electronic Press, vol. 8(2), pages 1805-1805. [Downloadable!] (restricted)
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