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The purpose of this investigation is to add to the body of knowledge regarding consumer skepticism toward advertising in general, and toward pharmaceutical advertising in particular. The study was conducted in the U.S. and in Germany. Skepticism toward advertising for both prescription and non-prescription pharmaceuticals was analyzed. Additional variables explored include: health consciousness, product involvement with pharmaceuticals, satisfaction with information in pharmaceutical advertising, and the importance of pharmaceutical advertising as a source of information. Furthermore, differences in the cultural value of uncertainty avoidance between U.S. and German consumers were examined and related to skepticism toward pharmaceutical advertising. Three hundred and forty-one Americans and 447 Germans were surveyed. A significant finding of this research revealed that skepticism toward pharmaceutical advertising is lower than skepticism toward advertising in general. Results also indicated that consumers showed no difference in their level of skepticism toward advertising for prescription versus non-prescription drugs. This is a particularly relevant finding as it relates directly to the ongoing discussion in Europe regarding whether or not to lift the ban on advertising for prescription drugs. Skepticism toward pharmaceutical advertising was found to be significantly negatively related to involvement with pharmaceuticals, to satisfaction with the informational content of the advertisements, to satisfaction with the comprehensibility of the advertisements, and to the importance placed on advertising as a source of health information. Regarding cultural differences, U.S. consumers appear to be less skeptical toward advertising in general, and toward advertising for prescription and non-prescription drugs in particular, than German consumers. This may be due to the lower degree of uncertainty avoidance in the U.S. Differences between the two countries related to the additional variables examined in the study are addressed as well. Implications for consumer protection policies are discussed, and recommendations for advertisers of pharmaceutical products are provided. The authors provide a cultural explanation for differences in the degree of skepticism between U.S. and German audiences.

Purpose – The purpose of this study is to estimate the own- and cross-price elasticity of brand-name outpatient prescription drug cost-sharing for maintenance medications and to estimate the effects of changes in the price differential between generic and brand-name prescription drugs.

Methodology/approach – We first review the literature on the effects of an increase in brand-name drug patient cost-sharing. In addition, we analyze two examples of utilization patterns in filling behavior associated with an increase in brand-name cost-sharing for patients in employer-sponsored health plans with chronic illness.

Findings – We found that the own-price elasticity of demand for brand-name prescription drugs was inelastic. However, the cross-price elasticity was not consistent in sign, and utilization patterns for generic prescription fills did not always increase after a rise in brand-name cost-sharing.

Research limitations – The empirical examples are limited to the experience of patients with employer-sponsored health insurance.

Practical implications – The common practice of increasing brand-name prescription drug patient cost-sharing to increase consumption of generic drugs may not always result in higher generic medication use. Higher brand-name drug cost-sharing levels may result in discontinuation of chronic therapies, instead of therapeutic switching.

Originality/value of chapter – The value of this chapter is its singular focus on the effects of higher brand-name drug cost-sharing through a synthesis of the literature examining the own- and cross-price elasticity of demand for brand-name medications and two empirical examples of the effects of changes in brand-name cost-sharing.

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 chapter uses quarterly county-level data from 2006 to 2014 to examine the direction of causality in the relationship between per capita opioid prescription rates and employment-to-population ratios. We first estimate models of the effect of per capita opioid prescription rates on employment-to-population ratios, instrumenting opioid prescriptions for younger ages using opioid prescriptions to the elderly. We find that the estimated effect of opioids on employment-to-population ratios is positive but small for women, while there is no relationship for men. We then estimate models of the effect of employment-to-population ratios on opioid prescription rates using a shift-share instrument and find ambiguous results. Overall, our findings suggest that there is no simple causal relationship between economic conditions and the abuse of opioids. Therefore, while improving economic conditions in depressed areas is desirable for many reasons, it is unlikely on its own to curb the opioid epidemic.

For health services researchers and health services management educators, chronicling the unfolding of a country's implementation of national health insurance (NHI) is once in a lifetime opportunity. Rarely, do researchers have the opportunity to observe the macro and micro changes associated with turning a country's health care delivery system 180 degrees. Accordingly, we report on the first decade of Taiwan's changing delivery system and selected adaptations of health care management, providers and patients.

Purpose – To analyse the development of pharmaceutical policy in the Dutch market for outpatient prescription drugs since the early 1990s.

Methodology – A literature review and document analysis is performed to examine the effects of pharmaceutical policy on the performance of the Dutch market for outpatient prescription drugs since the early 1990s.

Findings – Government efforts to control prices of pharmaceuticals were effective in constraining prices of in-patent drugs, but had an opposite effect on the prices of generic drugs. The gradual transition towards managed competition – that particularly gained momentum after the introduction of the new universal health insurance scheme in 2006 – appears to be more effective in constraining prices of generic drugs than earlier government efforts to control these prices.

Originality – Comparative analysis of the impact of price regulation and managed competition on generic drug prices in the Netherlands.

Implications – Implications of the changing role of health insurers are discussed for the future market for prescription drugs and role of pharmacies in the Netherlands.

The impact of DTC advertising of prescription drugs on consumers has been the subject of considerable debate worldwide. Proponents of DTC advertising argue that it allows patients to make more informed decisions, helps address under-treatment of some medical conditions, and improves the economic value of health care, among other benefits. In contrast, critics of DTC advertising contend that it leads to consumers paying higher prices, patients potentially being misled about risks and benefits of drugs, and patients pressuring doctors to prescribe drugs. The authors examine this debate in the context of two leading theories on the effects of advertising – the Advertising=Information and Advertising=Market power schools of thought and review empirical studies that have examined the impacts of DTC advertising on consumers. It is found that the research evidence generally favors the Advertising=Information school, which is supportive of the idea that DTC helps patients become more informed and communicate more effectively with their doctors.

The conceptual framework of institutions proposed here is not entirely new. While it shares common features with the early institutionalists’ frameworks, it also introduces some original insights. What is new is that this framework identifies the key components of institutions and approaches as an open organic system with complex dynamics among its components rather than a static mechanism operating in a vacuum. The two additional models presented in the next section will help us better understand how these components of institutions are linked, how they interact, and how institutions are enforced. The framework brings together and builds on empirical evidence and theoretical scholarship from the different disciplines discussed in the previous and current chapters.

Brand-name pharmaceutical companies have engaged in a variety of business conduct that has increased price. One of these activities involves “product hopping,” or brand switches from one version of a drug to another. The antitrust analysis of product hopping implicates antitrust law, patent law, the Hatch–Waxman Act, and state drug product selection laws, as well as uniquely complicated markets characterized by buyers different from decision makers. As a result, courts have offered inconsistent approaches to product hopping.

In this chapter, we offer a framework that courts and government enforcers can employ to analyze product hopping. The framework is the first to incorporate the characteristics of the pharmaceutical industry. It defines a “product hop” to include instances in which the manufacturer (1) reformulates the product to make the generic nonsubstitutable and (2) encourages doctors to write prescriptions for the reformulated rather than the original product.

When the conduct meets both requirements, our framework offers two stages of analysis. First, we propose two safe harbors to ensure that the vast majority of reformulations will not face antitrust review. Second, the framework examines whether the hop passes the “no-economic-sense” test, determining if the behavior would make economic sense if the hop did not have the effect of impairing generic competition. Showing just how far the courts have veered from justified economic analysis, the test would recommend a different analysis than that used in each of the five product-hopping cases that have been litigated to date, and a different outcome in two of them.