We examine the importance of prices, doctor and patient characteristics, and market institutions for the likelihood of choosing generic drugs instead of the more expensive original brand-name version. Using an extensive dataset extracted from The Norwegian Prescription Database (NorPD) containing all prescriptions written in March 2004 and 2006 on 23 different drugs (chemical substances) in Norway, we find strong evidence for the importance of both doctor and patient characteristics for the choice probabilities. The price difference between brand and generic versions and insurance coverage both affect generic substitution. Moreover, controlling for the retail chain affiliation of the dispensing pharmacy, we find that pharmacies play an important role for patients’ willingness to substitute. In markets with more recent entry of generic drugs, the brand-name loyalty proves to be much stronger, giving less explanatory power to our demand model.
|Date of creation:||17 Jun 2008|
|Contact details of provider:|| Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway|
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
More information through EDIRC
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.:
- Richard G. Frank & David S. Salkever, 1995.
"Generic Entry and the Pricing of Pharmaceuticals,"
NBER Working Papers
5306, National Bureau of Economic Research, Inc.
- Ernst R. Berndt, 2002. "Pharmaceuticals in U.S. Health Care: Determinants of Quantity and Price," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 45-66, Fall.
- Brekke, Kurt R. & Grasdal, Astrid L. & Holms, Tor Helge, 2009.
"Regulation and pricing of pharmaceuticals: Reference pricing or price cap regulation?,"
European Economic Review,
Elsevier, vol. 53(2), pages 170-185, February.
- Kurt R. Brekke & Astrid L. Grasdal & Tor Helge Holmås, 2007. "Regulation and Pricing of Pharmaceuticals: Reference Pricing or Price Cap Regulation?," CESifo Working Paper Series 2059, CESifo Group Munich.
- Brekke, Kurt R. & Grasdal, Astrid L. & Holmås, Tor Helge, 2006. "Regulation and Pricing of Pharmaceuticals: Reference Pricing or Price Cap Regulation?," Working Papers in Economics 14/06, University of Bergen, Department of Economics.
- Regan, Tracy L., 2008.
"Generic entry, price competition, and market segmentation in the prescription drug market,"
International Journal of Industrial Organization,
Elsevier, vol. 26(4), pages 930-948, July.
- Tracy L. Regan, 2007. "Generic entry, price competition, and market segmentation in the prescription drug market," Working Papers 2010-7, University of Miami, Department of Economics.
- Coscelli, Andrea, 2000. "The Importance of Doctors' and Patients' Preferences in the Prescription Decision," Journal of Industrial Economics, Wiley Blackwell, vol. 48(3), pages 349-369, September.
- 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.
- Grabowski, Henry G & Vernon, John M, 1992. "Brand Loyalty, Entry, and Price Competition in Pharmaceuticals after the 1984 Drug Act," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 331-350, October.
When requesting a correction, please mention this item's handle: RePEc:hhs:osloec:2008_011. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Magnus Gabriel Aase)
If references are entirely missing, you can add them using this form.