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Does the Identity of the Third-Party Payer Matters for Prescribing Doctors?

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  • Morten Dalen Dag

    ()

  • Locatelli Marilena

    ()

  • Sorisio Enrico

    ()

  • Strom Steinar

    () (University of Turin)

Abstract

TNF-alpha inhibitors represent one of the most important areas of biopharmaceuticals by sales, with three blockbusters accounting for 8 per cent of total pharmaceutical sale in Norway. Novelty of the paper is to examine, with the use of a unique natural policy experiment in Norway, 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. A stochastic structural model for the three drugs, covering demand and price setting, is estimated in a joint maximum likelihood approach. We find that doctors are more responsive when the costs are covered by the hospitals compared to when costs are covered by national insurance

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File URL: http://www.unito.it/unitoWAR/ShowBinary/FSRepo/D031/Allegati/WP2012Dip/8_WP_Dalen_Locatelli_Sorisio_Strom.pdf
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Bibliographic Info

Paper provided by University of Turin in its series Department of Economics Working Papers with number 201208.

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Length: 27 pages
Date of creation: Apr 2012
Date of revision:
Handle: RePEc:uto:dipeco:201208

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  1. O'Brien, Bernie, 1989. "The effect of patient charges on the utilisation of prescription medicines," Journal of Health Economics, Elsevier, vol. 8(1), pages 109-132, March.
  2. Coscelli, Andrea & Shum, Matthew, 2004. "An empirical model of learning and patient spillovers in new drug entry," Journal of Econometrics, Elsevier, vol. 122(2), pages 213-246, October.
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