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Generic substitution. Micro evidence from register data in Norway

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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 were examined. Using an extensive dataset extracted from The Norwegian Prescription Database (NorPD) containing all prescriptions dispensed to individuals in February 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 robabilities. 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 in promoting generic substitution. In markets with more recent entry of generic drugs, the brand-name loyalty proves to be much stronger, giving less explanatory powerto our demand model. Length: 25 pages

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  • Dalen Gag Morten & Furu Kai & Locatelli Marilena & Strom Steinar, 2009. "Generic substitution. Micro evidence from register data in Norway," Department of Economics and Statistics Cognetti de Martiis. Working Papers 200901, University of Turin.
  • Handle: RePEc:uto:dipeco:200901
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    1. Izhak, Olena, 2019. "Extra costs of integrity: Pharmacy markups and generic substitution in Finland," DICE Discussion Papers 307, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    2. Lin, Yu-Shiuan & Lin, Min-Ting & Cheng, Shou-Hsia, 2019. "Drug price, dosage and safety: Real-world evidence of oral hypoglycemic agents," Health Policy, Elsevier, vol. 123(12), pages 1221-1229.
    3. Kurt Brekke & Dag Dalen & Tor Holmås, 2014. "Diffusion of pharmaceuticals: cross-country evidence of anti-TNF drugs," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(9), pages 937-951, December.
    4. Gorecki, Paul K. & Nolan, Anne & Brick, Aoife & Lyons, Seán, 2012. "Pharmaceuticals Delivery in Ireland. Getting a Bigger Bang for the Buck," Research Series, Economic and Social Research Institute (ESRI), number RS24, December.
    5. Takizawa, Osamu & Urushihara, Hisashi & Tanaka, Shiro & Kawakami, Koji, 2015. "Price difference as a predictor of the selection between brand name and generic statins in Japan," Health Policy, Elsevier, vol. 119(5), pages 612-619.
    6. Dag Morten Dalen & Marilena Locatelli & Steinar Strøm, 2010. "Longitudinal Analysis of Generic Substitution," CESifo Working Paper Series 3176, CESifo.
    7. Marilena Locatelli & Steinar Strøm, 2015. "Longitudinal Analysis of Generic Substitution," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(3), pages 363-374, September.
    8. Ito, Yuki & Hara, Konan & Kobayashi, Yasuki, 2020. "The effect of inertia on brand-name versus generic drug choices," Journal of Economic Behavior & Organization, Elsevier, vol. 172(C), pages 364-379.
    9. Granlund, David & Sundström, David, 2018. "Physicians prescribing originals causes welfare losses," Economics Letters, Elsevier, vol. 170(C), pages 143-146.
    10. Brick, Aoife & Gorecki, Paul K. & Nolan, Anne, 2013. "Ireland: Pharmaceutical Prices, Prescribing Practices and Usage of Generics in a Comparative Context," Research Series, Economic and Social Research Institute (ESRI), number RS32, December.

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