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The importance of the first generic substitution: Evidence from Sweden

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  • Janssen, Aljoscha
  • Granlund, David

Abstract

We analyze changes in the willingness to substitute from prescribed pharmaceuticals to more affordable generic equivalents in response to the first experience with a substitution. Using Swedish individual-level data of prescribed and dispensed pharmaceuticals, we employ a dynamic event study and an instrumental variable approach to show that an initial substitution reduces the probability of opposing subsequent substitutions by 39 percentage points. We recommend that policy-makers target patients with a history of opposed substitution and offer additional discounts to promote substitution as long-term savings outweigh one-time costs.

Suggested Citation

  • Janssen, Aljoscha & Granlund, David, 2023. "The importance of the first generic substitution: Evidence from Sweden," Journal of Economic Behavior & Organization, Elsevier, vol. 213(C), pages 1-25.
    • Handle: RePEc:eee:jeborg:v:213:y:2023:i:c:p:1-25
    DOI: 10.1016/j.jebo.2023.07.017
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    More about this item

    Keywords

    Generic substitution; Pharmaceuticals; Health care costs;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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