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Entry of New Drugs and doctors' Prescriptions

Listed author(s):
  • Andrea Coscelli

    (Lexecon Ltd)

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    This paper is about entry of new drugs in pharmaceutical markets. More specifically, I analyze the diffusion of new drugs among doctors. My empirical analysis uses non-parametric duration models, which are flexible enough to identify the most important covariates influencing the doctors' adoption decisions. My results peak to issues such as why generic drugs do not have large market shares in post-patent drug markets. When I analyze entry of bio-equivalent products, I find that the doctors' past dispersion across drugs in a therapeutic market is the best predictor of the likelihood of adoption. When a new presentation form is introduced by an incumbent firm, the doctors who extensively prescribed the brand in the other presentation forms are the ones most likely to adopt the new drug. Finally, I find that doctors are not firm-loyal in their prescribing behaviour across therapeutic markets.

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    Paper provided by Department of Economics, Royal Holloway University of London in its series Royal Holloway, University of London: Discussion Papers in Economics with number 98/13.

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    Length: 44 pages
    Date of creation: Mar 1996
    Date of revision: Jan 1998
    Handle: RePEc:hol:holodi:9813
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