Choosing among Competing Blockbusters: Does the Identity of the Third-party Payer Matter for Prescribing Doctors?

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Choosing among Competing Blockbusters: Does the Identity of the Third-party Payer Matter for Prescribing Doctors?

Author Info

Dalen, Dag Morten (Norwegian School of Management BI)
Sorisio, Enrico (PharmaNess and University of Oslo)
Strøm, Steinar () (Dept. of Economics, University of Oslo)

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Abstract

TNF-alpha inhibitors represent one of the most important areas of biopharmaceuticals by sales, with three blockbusters accounting for 8 % of total pharmaceutical sale in Norway. With use of a unique natural policy experiment in Norway, this paper examines to what extent the identity of the third-party payer affects doctors choice between the three available drugs. We are able to investigate to what extent the price responsiveness of prescription choices is affected when the identity of the third-party payer changes. The three dominating drugs in this market, Enbrel, Remicade, and Humira, are substitutes, but have had different and varying funding schemes - hospitals and the national insurance plan. We find that treatment choices are price responsive, and that the price response increases when the doctor’s affiliated hospital covers the cost instead of a traditional fee-for-service insurance plan.

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Publisher Info
Paper provided by Oslo University, Department of Economics in its series Memorandum with number 10/2009.

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Length: 27 pages
Date of creation: 14 May 2009
Date of revision:
Handle: RePEc:hhs:osloec:2009_010

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Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
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Find related papers by JEL classification:
C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

This paper has been announced in the following NEP Reports:

NEP-ALL-2009-09-11 (All new papers)
NEP-DCM-2009-09-11 (Discrete Choice Models)
NEP-HEA-2009-09-11 (Health Economics)

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This page was last updated on 2009-11-26.

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