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Generic substitution: micro evidence from register data in Norway.

https://arctichealth.org/en/permalink/ahliterature144993
Source
Eur J Health Econ. 2011 Feb;12(1):49-59
Publication Type
Article
Date
Feb-2011
Author
Dag Morten Dalen
Kari Furu
Marilena Locatelli
Steinar Strøm
Author Affiliation
BI Norwegian School of Management, Oslo, Norway. dag.m.dalen@bi.no
Source
Eur J Health Econ. 2011 Feb;12(1):49-59
Date
Feb-2011
Language
English
Publication Type
Article
Keywords
Choice Behavior
Drug Industry
Drugs, Generic - economics - therapeutic use
Humans
Models, Econometric
Norway
Registries
Abstract
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 are examined. Using an extensive dataset extracted from The Norwegian Prescription Database 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 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 in promoting generic substitution. In markets with more recent entry of generic drugs, brand-name loyalty proves to be much stronger, giving less explanatory power to our demand model.
PubMed ID
20213182 View in PubMed
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Price regulation and generic competition in the pharmaceutical market.

https://arctichealth.org/en/permalink/ahliterature168321
Source
Eur J Health Econ. 2006 Sep;7(3):208-14
Publication Type
Article
Date
Sep-2006
Author
Dag Morten Dalen
Steinar Strøm
Tonje Haabeth
Author Affiliation
Norwegian School of Management and Frisch Centre, Oslo, Norway. dag.m.dalen@bi.no
Source
Eur J Health Econ. 2006 Sep;7(3):208-14
Date
Sep-2006
Language
English
Publication Type
Article
Keywords
Commerce - economics - legislation & jurisprudence
Cost Control
Drug Industry - economics - legislation & jurisprudence
Drugs, Generic - economics
Economic Competition - economics
Humans
Legislation, Drug - economics
Models, Econometric
Norway
Abstract
In March 2003 the Norwegian government implemented yardstick-based price regulation schemes on a selection of drugs subjected to generic competition. The retail price cap, termed the "index price," on a drug (chemical substance) was set equal to the average of the three lowest producer prices on that drug, plus a fixed wholesale and retail margin. This is supposed to lower barriers of entry for generic drugs and to trigger price competition. Using monthly data over the period 1998-2004 for the six drugs (chemical entities) included in the index price system, we estimate a structural model enabling us to examine the impact of the reform on both demand and market power. Our results suggest that the index price helped to increase the market shares of generic drugs and succeeded in triggering price competition.
PubMed ID
16841230 View in PubMed
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