Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Thursday, May 16, 2013

Determinants of Generic vs. Brand Drug Choice: Evidence from Population-wide Danish Data

Posted by D. Daniel Sokol

Niels Skipper (Department of Economics and Business, Aarhus University) Rune Vejlin (Department of Economics and Business, Aarhus University) find Determinants of Generic vs. Brand Drug Choice: Evidence from Population-wide Danish Data.

ABSTRACT: When prescription medications go off patent, vastly cheaper generic drugs usually enters the market. However, the original brand medication often maintains non-negligible market shares. This paper investigates whether demand for branded medications in post-patent markets is patient- or doctor driven. We use population-wide Danish register data including all prescriptions for seven blockbuster drugs from 1998-2008. At the outset, descriptive statistics suggest large variation in drug choice over doctors. Nonetheless, using a two-way fixed effects model we find that the primary determinants of brand drug use are unobserved patient characteristics and price effects, while observed and unobserved doctor characteristics in general explain only 0.7 % of the variation in drug choice. This is suggestive evidence that the doctors in the Danish setting with no incentives to push expensive brand drugs do indeed not do so. Our results also suggest that one should be careful when applying fixed effects in small samples.

http://lawprofessors.typepad.com/antitrustprof_blog/2013/05/determinants-of-generic-vs-brand-drug-choice-evidence-from-population-wide-danish-data.html

| Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef017d42c56fde970c

Listed below are links to weblogs that reference Determinants of Generic vs. Brand Drug Choice: Evidence from Population-wide Danish Data:

Comments

I Think to decision to use branded or generic prescription drugs is influenced by both the patient and their doctor. Patients are typically seeking a cost effective alternative while doctors are encouraged by drug companies to prescribe what they tell them to.

Posted by: Drug Test Friend | May 16, 2013 5:53:26 AM

Post a comment