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The present paper aims to understand the underpinnings of the variations in brand level direct‐to‐consumer (DTC) advertising through a two‐part study. First, it seeks to examine the various influences on advertising intensity (operationalized by advertising to sales ratios) in the context of DTC advertising. Second, it aims to analyze how changes in share of voice impact changes in market share.

Data on brand level advertising as well as sales were collected from different government and industry sources. This is used to compute the ratio of DTC advertising to sales as well as changes in share of voice, market share and average drug prices. A log‐log model is used to find parameter estimates based on OLS regression.

Market share has a negative influence on the ratio of advertising to sales. Drugs which have a greater degree of innovation (as judged by the FDA) appear to spend more on DTC advertising relative to sales. The paper also finds that an increase in share of voice is not associated with increased average drug prices, but is related to a growth of market share because of a change in the share of total prescriptions dispensed.

The paper is one of the few to examine the factors influencing advertising to sales ratios in the context of DTC advertising. It is also one of the first to investigate the relationship of changes in the share of voice with changes in market share.

This paper examines the relationship between the originality of a pharmaceutical innovation and its patent quality. Greater patent quality has been shown in the extant literature to enhance market value, which better enables firms to recoup research and development (R&D) expenditures incurred during the innovation process. Understanding how originality improves patent quality can assist policymakers, when determining the optimal length of pharmaceutical patent protection and/or market exclusivity.

The relationship between originality and patent quality is empirically investigated using a tobit, as well as a zero-inflated negative binomial, estimation approach to account for prevalence of patents receiving zero forward citations. Moderating effects of joint innovation, innovation by a university researcher and innovation by an established innovator on originality are also considered.

There is a robust and positive relationship between patent originality and quality in the pharmaceutical sector. This relationship is positively moderated by joint patent ownership with a university. As such, innovators that target originality in new drug development (especially those collaborating with universities) should, according to extant literature, see greater increases in their market value.

Policymakers can use information on the originality of a new drug to discern the optimal length of market exclusivity needed to enable the innovator to recoup expenditures related to R&D. Better predictions of the timing for which firms can recoup R&D expenditures will equip policymakers with knowledge about the appropriate timing to introduce competition into the market, which is critical to reducing the price of pharmaceuticals to consumers.

The purpose of this paper is to take a close look at competition among the generic entrants during the first three years after patent expiration and examine whether there is a first mover advantage. Pharmaceutical markets experience the entry of numerous generic firms upon expiration of the brand firm’s patent.

A random effect nested logit model of competition that allows for competition between the brand drug and generics, and among multiple generic drugs is specified. The model accommodates the effects of prices, detailing, sampling, journal advertising, time-in-market and molecule-specific characteristics. The model is estimated on cross-section time-series data for 49 molecules in which the brand drug lost patent exclusivity between 1992 and 2000.

Strong evidence that the early generic entrant enjoys a substantial market share and profit advantage over the second and the third entrants, after controlling for differences in marketing activities was found. In addition, evidence suggesting that the advantage is due to the response of the retail pharmacy channel and due to differential effectiveness of advertising and pricing between earlier versus later entrants was found.

This paper is the first to empirically model first mover advantage among undifferentiated products. The findings are useful for regulators in pharmaceutical and healthcare industries. They can also shed light on other industries where there is little or no quality differentiation, such as commodity trading, open-source software distribution and online banking.

The majority of emerging adults in the United States spend time in cohabiting unions. Prior research has suggested that higher levels of sexual non-exclusivity may exist among those in cohabiting relationships compared to marital unions. Although these basic patterns have been explored in prior work, research examining the potential reasons why levels of sexual non-exclusivity differ by union status has been limited. Drawing on a relational perspective and using the fifth wave of data from the Toledo Adolescent Relationships Study (TARS), the present study found that higher levels of sexual non-exclusivity in cohabiting relationships were explained by intimate relationship characteristics and sexual histories rather than sociodemographic factors, partner heterogamy, or partner- and couple-level drug use. These findings highlighted that understanding the higher rates of sexually non-exclusive experiences in cohabiting relationships, compared to marital relationships, requires attention to specific dynamics of the intimate partnership and prior relational experiences of both partners. The study concluded that cohabitation has a unique place in emerging adults’ relationship landscape and may set the groundwork for future relationship functioning.

The paper aims to study how global pharmaceutical companies such as Pfizer have managed the challenges of pharmaceutical patent expiry.

A case study method was applied. The best-selling brand drug over the past 10 years – Lipitor – was chosen as the case target.

For dealing with this, this paper describes all the details of the corresponding strategies of Pfizer before and after patent expiration of Lipitor. Before patent expiry, Pfizer undertook the activities of direct-to-consumer marketing, pricing strategy for competition, legal delay and me-too drug R&D. After patent expiry, Pfizer chose to carry out continuous marketing for brand, rebate strategy, authorized generics and change to over-the-counter. In addition, diversity and globalization strategy was applied before and after patent expiry.

This research provides strong implication for managing pharmaceutical products before and after patent expiry.

It is strongly recommended for both brand and generic drug companies to design strategies to meet the challenges of pharmaceutical patent expiry.

For the global pharmaceutical market, a conclusion can be drawn that, nowadays, the “patent cliff” is the most significant factor influencing decision-makers to consider futuristic policies. Further, it is also a considerably effective solution for reducing health-care costs for policymakers.

This paper contributes to the field of patent expiry management in high-tech industries such as pharmaceuticals.

With expenditures totaling $227 billion in 2007, prescription drug purchases are a growing portion of the total medical expenditure, and as this industry continues to grow, prescription drugs will continue to be a critical part of the larger health care industry. This chapter presents a survey on the economics of the US pharmaceutical industry, with a focus on the role of R&D and marketing, the determinants (and complications) of prescription drug pricing, and various aspects of consumer behavior specific to this industry, such as prescription drug regulation, the patient's interaction with the physician, and insurance coverage. This chapter also provides background in areas not often considered in the economics literature, such as the role of pharmacy benefit managers in prescription drug prices and the differentiation between alternative measures of prescription drug prices.

This research studies the effect of deregulation of price cap in pharmaceutical market. Price regulation (either through price cap or reference price) is common practice in the pharmaceutical market but recently there are increasing voices calling for deregulation claiming that deregulation could help in lowering drug price and increase revenue of pharmaceutical firms. Upon those callings, Chinese government removed the price cap regulation in June 2015. The author uses this natural policy experiment to study this effect.

In this study, the author applied the interrupted time series analysis (ITSA) on the revenue data of nine categories of both generic and branded drugs in China from March 2011 to August 2016 (the time frame includes both before and after of the initialization of the deregulation) and analyzed the effect of deregulation.

The results showed that, whether the revenue of drugs will increase or decrease after the deregulation of price cap depends on the level of competition and the change of patterns of the branded and generic drugs are different. When HHI (Herfindahl–Hirschman index) is sufficiently low (competition is high), revenue does not change as a result of deregulation, when HHI is moderately low (moderate competition), revenue from generic drugs will decrease significantly and revenue from branded drugs will increase significantly, and when HHI is high (low competition), revenue from generic drugs will increase significantly and revenue from branded drugs will decrease significantly.

This is a unique study with a unique data set. Most previous studies focus on regulation of drug price and analyze how this may affect drug revenue; however, this is a natural policy experiment of de-regulation. Moreover, previously most studies focus on reference pricing regulation and this is price-cap, a different mechanism that is rarely studied. The originality/value is high of this article.

The purpose of this paper is to discuss how system dynamics (SD) modeling can help in cases where the management models used by an organization are not adequate for the task at hand.

Two specific cases of management model inadequacy are discussed in this paper – namely management model obsolescence and management model inappropriateness. Each of the two cases is being demonstrated with the use of a specific practical case study. SD simulation models have been constructed based on a more comprehensive view than the ones used at the outset in order to come up with more robust and reliable management models, which were appropriate to the situations at hand. The cases conducted were exploratory in the tradition of action research and the findings are preliminary.

The inadequacy of prior management models was demonstrated by the superior results obtained – as derived from the SD models – if more appropriate management models, leading to new value potentials, were used.

The use of complete systems models prevented the organizational obstacles hindering the assessment of management models used for their adequacy. The paper is addressed primarily to the academic research community; however, the findings are of interest to practitioners as well.

The paper contributes to the research on management models, and the use of SD in organizations more generally.

The purpose of this paper is to find out the relationship between the qualities of generic drugs perceived by the physicians and brand equity of the branded generics and to examine the physicians' perceptions of prescribing generic drugs for selective medical conditions in India.

The study was carried out across six major cities in Eastern India with 392 physicians. Here components of perceived quality, i.e. intrinsic cues and extrinsic cues are hypothesized to influence perceived quality of branded generics which in turn influence brand equity. It is also hypothesized that respondents' quality experience is assimilated towards their quality expectations, independent of small variations in objective quality of the drug.

Results showed that perceived quality of branded generics significantly, but indirectly, affected brand equity through the mediating variables, intrinsic cues and extrinsic cues. The results also showed that physicians' quality experience leads to quality expectations, independent of small variations in drug quality on five common yet serious diseases in India.

Current research finds that for prescription‐based branded generic drugs, perceived quality mainly depends on intrinsic cues; therefore, managers should be interested in intrinsic cues that increase brand equity and necessary marketing actions should be implemented accordingly.

No other scholarly article has been developed, so far, analyzing the effect of perceived quality on brand equity in the Indian branded generic drug segment. Besides providing evidence from the Indian pharmaceutical context about the impact of quality cues, the paper also presents evidence on physicians' quality observation of branded generics on five common yet serious diseases in India.

The purpose of this paper is to show the link between the comparative effectiveness research (CER) and the interest in developing drugs for rare disease by the pharmaceutical industry. Total healthcare spending is on the rise without having a corresponding better health outcome. As such, with the growing role of government in healthcare, measuring and demonstrating value is beginning to expand beyond the private sector to metrics applied in the public sector. A modern approach to comparative effective research began its rapid rise in the USA when the American Recovery and Reinvestment Act of 2009 allocated $1.1 billion for CER. This paper analyzes the implication and impact on the pharmaceutical industry.

The paper reviews the basic definitions of CER and its areas of strength and weakness. It used real examples of drugs to show the impact of the Reinvestment Act of 2009 on the rise of orphan drugs.

The study shows that the act encouraged the development of orphan drugs, mainly because of the low budget impact due to a smaller patient base. Provisions of the Affordable Care Act provide incentives for such rare disease indications, as no one can be denied coverage with pre-existing conditions.

The study is limited by the number of available rare drugs and the ongoing process of implementation of the Affordable Care Act.

The study shows the cost-effective method of treating medical conditions.

Development of orphan drugs opens up access to care for many patients at a cost-effective price.

This paper shows the link between the CER and the interest in developing drugs for rare disease by the pharmaceutical industry. It also brings out the possible implication of the Affordable Care Act on the pharmaceutical industry with respect to its strategies for drug development and drug portfolio.