IDEAS home Printed from https://ideas.repec.org/a/eee/ijrema/v25y2008i4p282-293.html
   My bibliography  Save this article

A dual-market diffusion model for a new prescription pharmaceutical

Author

Listed:
  • Vakratsas, Demetrios
  • Kolsarici, Ceren

Abstract

Despite the proliferation of diffusion models and a plethora of applications in many different markets and domains, relatively little research has been conducted on prescription drug diffusion. Yet prescription pharmaceuticals are an increasingly important component of patient care and a critical factor for health economics. Based on clinical management and pharmacoepidemilogical concepts that consider the severity of health problems, and the medical practice of watchful waiting, we propose a dual-market model for the diffusion of new prescription pharmaceuticals. This model distinguishes between an “early” adoption market involving patients with severe health problems, for whom demand is accumulated prior to the pharmaceutical's launch, and a “late” market corresponding to prescriptions for patients with mild problems, which is developed after and potentially triggered by the product's launch. We applied the model to monthly data on new prescriptions and on corresponding marketing activities for a new prescription category, representing the first oral treatment available for the disease. The results suggest that the proposed model has good parameter face and forecasting validity.

Suggested Citation

  • Vakratsas, Demetrios & Kolsarici, Ceren, 2008. "A dual-market diffusion model for a new prescription pharmaceutical," International Journal of Research in Marketing, Elsevier, vol. 25(4), pages 282-293.
    • Handle: RePEc:eee:ijrema:v:25:y:2008:i:4:p:282-293
    DOI: 10.1016/j.ijresmar.2008.05.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167811608000608
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijresmar.2008.05.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Prasad A. Naik & Murali K. Mantrala & Alan G. Sawyer, 1998. "Planning Media Schedules in the Presence of Dynamic Advertising Quality," Marketing Science, INFORMS, vol. 17(3), pages 214-235.
    2. Frank M. Bass & Trichy V. Krishnan & Dipak C. Jain, 1994. "Why the Bass Model Fits without Decision Variables," Marketing Science, INFORMS, vol. 13(3), pages 203-223.
    3. Frank M. Bass, 1969. "A New Product Growth for Model Consumer Durables," Management Science, INFORMS, vol. 15(5), pages 215-227, January.
    4. Venkataraman, S. & Stremersch, S., 2007. "The Debate on Influencing Doctors’ Decisions: Are Drug Characteristics the Missing Link?," ERIM Report Series Research in Management ERS-2007-056-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    5. Demetrios Vakratsas & Fred M. Feinberg & Frank M. Bass & Gurumurthy Kalyanaram, 2004. "The Shape of Advertising Response Functions Revisited: A Model of Dynamic Probabilistic Thresholds," Marketing Science, INFORMS, vol. 23(1), pages 109-119, April.
    6. Christophe Van den Bulte & Yogesh V. Joshi, 2007. "New Product Diffusion with Influentials and Imitators," Marketing Science, INFORMS, vol. 26(3), pages 400-421, 05-06.
    7. Rosenthal Meredith B. & Berndt Ernst R. & Donohue Julie M. & Epstein Arnold M. & Frank Richard G., 2003. "Demand Effects of Recent Changes in Prescription Drug Promotion," Forum for Health Economics & Policy, De Gruyter, vol. 6(1), pages 1-28, January.
    8. V. Srinivasan & Charlotte H. Mason, 1986. "Technical Note—Nonlinear Least Squares Estimation of New Product Diffusion Models," Marketing Science, INFORMS, vol. 5(2), pages 169-178.
    9. Christophe Van den Bulte, 2000. "New Product Diffusion Acceleration: Measurement and Analysis," Marketing Science, INFORMS, vol. 19(4), pages 366-380, June.
    10. Sriram Venkataraman & Stefan Stremersch, 2007. "The Debate on Influencing Doctors' Decisions: Are Drug Characteristics the Missing Link?," Management Science, INFORMS, vol. 53(11), pages 1688-1701, November.
    11. Meredith B. Rosenthal & Ernst R. Berndt & Julie M. Donohue & Arnold M. Epstein & Richard G. Frank, 2003. "Demand Effects of Recent Changes in Prescription Drug Promotion," NBER Chapters, in: Frontiers in Health Policy Research, Volume 6, pages 1-26, National Bureau of Economic Research, Inc.
    12. Desiraju, Ramarao & Nair, Harikesh S. & Chintagunta, Pradeep, 2004. "Diffusion of New Pharmaceutical Drugs in Developing and Developed Nations," Research Papers 1950, Stanford University, Graduate School of Business.
    13. Minhi Hahn & Sehoon Park & Lakshman Krishnamurthi & Andris A. Zoltners, 1994. "Analysis of New Product Diffusion Using a Four-Segment Trial-Repeat Model," Marketing Science, INFORMS, vol. 13(3), pages 224-247.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Youseok Lee & Sang-Hoon Kim & Kyoung Cheon Cha, 2023. "The diffusion pattern of new products: evidence from the Korean movie industry," Asian Business & Management, Palgrave Macmillan, vol. 22(5), pages 1830-1847, November.
    2. Verniers, Isabel & Stremersch, Stefan & Croux, Christophe, 2011. "The global entry of new pharmaceuticals: A joint investigation of launch window and price," International Journal of Research in Marketing, Elsevier, vol. 28(4), pages 295-308.
    3. Ebina, Takeshi & Matsushima, Noriaki & Shimizu, Daisuke, 2015. "Product differentiation and entry timing in a continuous time spatial competition model," European Journal of Operational Research, Elsevier, vol. 247(3), pages 904-913.
    4. Peres, Renana & Muller, Eitan & Mahajan, Vijay, 2010. "Innovation diffusion and new product growth models: A critical review and research directions," International Journal of Research in Marketing, Elsevier, vol. 27(2), pages 91-106.
    5. Katharina Elisabeth Fischer & Tom Stargardt, 2016. "The diffusion of generics after patent expiry in Germany," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(8), pages 1027-1040, November.
    6. Ceren Kolsarici & Demetrios Vakratsas, 2015. "Correcting for Misspecification in Parameter Dynamics to Improve Forecast Accuracy with Adaptively Estimated Models," Management Science, INFORMS, vol. 61(10), pages 2495-2513, October.
    7. Hong, Jungsik & Koo, Hoonyoung & Kim, Taegu, 2016. "Easy, reliable method for mid-term demand forecasting based on the Bass model: A hybrid approach of NLS and OLS," European Journal of Operational Research, Elsevier, vol. 248(2), pages 681-690.
    8. Verniers, I.W.J. & Stremersch, S. & Croux, C., 2011. "The Global Entry of New Pharmaceuticals: A Joint Investigation of Launch Window and Price," ERIM Report Series Research in Management ERS-2011-010-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    9. Goodwin, Paul & Meeran, Sheik & Dyussekeneva, Karima, 2014. "The challenges of pre-launch forecasting of adoption time series for new durable products," International Journal of Forecasting, Elsevier, vol. 30(4), pages 1082-1097.
    10. Wenjing Shen & Izak Duenyas & Roman Kapuscinski, 2014. "Optimal Pricing, Production, and Inventory for New Product Diffusion Under Supply Constraints," Manufacturing & Service Operations Management, INFORMS, vol. 16(1), pages 28-45, February.
    11. Fruchter, Gila E. & Van den Bulte, Christophe, 2011. "Why the Generalized Bass Model leads to odd optimal advertising policies," International Journal of Research in Marketing, Elsevier, vol. 28(3), pages 218-230.
    12. Marie Doumic & Mathieu Mezache & Benoît Perthame & Edouard Ribes & Delphine Salort, 2017. "Strategic Workforce Planning and sales force : a demographic approach to productivity," Working Papers hal-01449812, HAL.
    13. Stremersch, Stefan, 2008. "Health and marketing: The emergence of a new field of research," International Journal of Research in Marketing, Elsevier, vol. 25(4), pages 229-233.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stremersch, S. & Lemmens, A., 2008. "Sales Growth of New Pharmaceuticals Across the Globe: The Role of Regulatory Regimes," ERIM Report Series Research in Management ERS-2008-026-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    2. Stefan Stremersch & Aurélie Lemmens, 2009. "Sales Growth of New Pharmaceuticals Across the Globe: The Role of Regulatory Regimes," Marketing Science, INFORMS, vol. 28(4), pages 690-708, 07-08.
    3. Kremer, Sara T.M. & Bijmolt, Tammo H.A. & Leeflang, Peter S.H. & Wieringa, Jaap E., 2008. "Generalizations on the effectiveness of pharmaceutical promotional expenditures," International Journal of Research in Marketing, Elsevier, vol. 25(4), pages 234-246.
    4. Peres, Renana & Muller, Eitan & Mahajan, Vijay, 2010. "Innovation diffusion and new product growth models: A critical review and research directions," International Journal of Research in Marketing, Elsevier, vol. 27(2), pages 91-106.
    5. Ruiz-Conde, Enar & Wieringa, Jaap E. & Leeflang, Peter S.H., 2014. "Competitive diffusion of new prescription drugs: The role of pharmaceutical marketing investment," Technological Forecasting and Social Change, Elsevier, vol. 88(C), pages 49-63.
    6. Olivier Toubia & Jacob Goldenberg & Rosanna Garcia, 2014. "Improving Penetration Forecasts Using Social Interactions Data," Management Science, INFORMS, vol. 60(12), pages 3049-3066, December.
    7. Sang-Gun Lee & Eui-bang Lee & Chang-Gyu Yang, 2014. "Strategies for ICT product diffusion: the case of the Korean mobile communications market," Service Business, Springer;Pan-Pacific Business Association, vol. 8(1), pages 65-81, March.
    8. Anusua Datta & Dhaval Dave, 2017. "Effects of Physician‐directed Pharmaceutical Promotion on Prescription Behaviors: Longitudinal Evidence," Health Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 450-468, April.
    9. Singhal, Shakshi & Anand, Adarsh & Singh, Ompal, 2020. "Studying dynamic market size-based adoption modeling & product diffusion under stochastic environment," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    10. M. Berk Ataman & Carl F. Mela & Harald J. van Heerde, 2008. "Building Brands," Marketing Science, INFORMS, vol. 27(6), pages 1036-1054, 11-12.
    11. Barnes, Belinda & Southwell, Darren & Bruce, Sarah & Woodhams, Felicity, 2014. "Additionality, common practice and incentive schemes for the uptake of innovations," Technological Forecasting and Social Change, Elsevier, vol. 89(C), pages 43-61.
    12. Hailin Zhang & Xina Yuan & Tae Ho Song, 2020. "Examining the role of the marketing activity and eWOM in the movie diffusion: the decomposition perspective," Electronic Commerce Research, Springer, vol. 20(3), pages 589-608, September.
    13. Ceren Kolsarici & Demetrios Vakratsas, 2015. "Correcting for Misspecification in Parameter Dynamics to Improve Forecast Accuracy with Adaptively Estimated Models," Management Science, INFORMS, vol. 61(10), pages 2495-2513, October.
    14. Saurabh Panwar & P. K. Kapur & Ompal Singh, 2021. "Technology diffusion model with change in adoption rate and repeat purchases: a case of consumer balking," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 12(1), pages 29-36, February.
    15. 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.
    16. Meade, Nigel & Islam, Towhidul, 2006. "Modelling and forecasting the diffusion of innovation - A 25-year review," International Journal of Forecasting, Elsevier, vol. 22(3), pages 519-545.
    17. Peter Leeflang & Jaap Wieringa, 2010. "Modeling the effects of pharmaceutical marketing," Marketing Letters, Springer, vol. 21(2), pages 121-133, June.
    18. David B. Ridley, 2015. "Payments, Promotion, And The Purple Pill," Health Economics, John Wiley & Sons, Ltd., vol. 24(1), pages 86-103, January.
    19. Park, Sang-June & Choi, Sungchul, 2016. "Valuation of adopters based on the Bass model for a new product," Technological Forecasting and Social Change, Elsevier, vol. 108(C), pages 63-69.
    20. Yuri Peers & Dennis Fok & Philip Hans Franses, 2012. "Modeling Seasonality in New Product Diffusion," Marketing Science, INFORMS, vol. 31(2), pages 351-364, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ijrema:v:25:y:2008:i:4:p:282-293. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/international-journal-of-research-in-marketing/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.