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Demand for Pharmaceutical Drugs: A Choice Modelling Experiment

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Author Info
Anna Merino
Abstract

Despite the importance of supplier inducement and brand loyalty in the drug purchasing process, little empirical evidence is to be found with regard to the influence that these factors exert on patients’ decisions. Under the new scenario of easier access to information, patients are becoming more demanding and even go as far as questioning their physicians’ prescription. Furthermore, new regulation also encourages patients to adopt an active role in the decision between brand-name and generic drugs. Using a stated preference model based on a choice survey, I have found evidence of how significant physicians’ prescription and pharmacists’ recommendation become throughout the drug purchase process and, to what extent, brand loyalty influences the final decision. As far as we are aware, this paper is the first to explicitly take consumers’ preferences into account rather than focusing on the behavior of health professionals.

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Publisher Info
Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 704.

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Date of creation: Jun 2003
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Handle: RePEc:upf:upfgen:704

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Related research
Keywords: Brand loyalty; demand inducement; drug price elasticity; discrete choice experiment;

Find related papers by JEL classification:
I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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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. Judith K. Hellerstein, 1998. "The Importance of the Physician in the Generic Versus Trade-Name Prescription Decision," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 108-136, Spring. [Downloadable!] (restricted)
  2. Beggs, S. & Cardell, S. & Hausman, J., 1981. "Assessing the potential demand for electric cars," Journal of Econometrics, Elsevier, vol. 17(1), pages 1-19, September. [Downloadable!] (restricted)
  3. Paul Ellickson & Scott Stern & Manuel Trajtenberg, 1999. "Patient Welfare and Patient Compliance: An Empirical Framework for Measuring the Benefits from Pharmaceutical Innovation," NBER Working Papers 6890, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Hanley, Nick & Mourato, Susana & Wright, Robert E, 2001. " Choice Modelling Approaches: A Superior Alternative for Environmental Valuation?," Journal of Economic Surveys, Blackwell Publishing, vol. 15(3), pages 435-62, July. [Downloadable!] (restricted)
  5. Ellison, S & Cockburn, I & Griliches, A & Hausman, J, 1996. "Characteristics of Demand for Pharmaceutical Products : an Examination of four Cephalosporins," Working papers 96-24, Massachusetts Institute of Technology (MIT), Department of Economics.
    Other versions:
  6. Fredrik Carlsson & Peter Martinsson, 2003. "Design techniques for stated preference methods in health economics," Health Economics, John Wiley & Sons, Ltd., vol. 12(4), pages 281-294. [Downloadable!]
  7. Uwe Dulleck & Rudolf Kerschbamer, 2001. "On Doctors, Mechanics and Computer Specialists Or Where are the Problems with Credence Goods?," Vienna Economics Papers 0101, University of Vienna, Department of Economics. [Downloadable!]
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  8. Coscelli, Andrea, 2000. "The Importance of Doctors' and Patients' Preferences in the Prescription Decision," Journal of Industrial Economics, Blackwell Publishing, vol. 48(3), pages 349-69, September. [Downloadable!] (restricted)
  9. Hausman, Jerry A. & Ruud, Paul A., 1987. "Specifying and testing econometric models for rank-ordered data," Journal of Econometrics, Elsevier, vol. 34(1-2), pages 83-104. [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. Frank R. Lichtenberg, 2006. "Importation and Innovation," NBER Working Papers 12539, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Anna Merino, 2003. "Eliciting Consumers Preferences Using Stated Preference Discrete Choice Models: Contingent Ranking versus Choice Experiment," Working Papers, Research Center on Health and Economics 705, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
  3. Anna Merino, 2003. "Eliciting Consumers Preferences Using Stated Preference Discrete Choice Models: Contingent Ranking versus Choice Experiment," Economics Working Papers 705, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
  4. Karolin Becker & Peter Zweifel, 2005. "Cost Sharing in Health Insurance: An Instrument for Risk Selection?," Working Papers 0513, University of Zurich, Socioeconomic Institute. [Downloadable!]
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