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TitleMargins and market shares : pharmacy incentives for generic substitution
Author(s)Brekke, Kurt R.
Holmås, Tor Helge
Straume, Odd Rune
Generic substitution
Issue date2010
PublisherUniversidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)
Citation“NIPE - Working Paper Series”. 20 (2010) 1-39.
Abstract(s)We study the impact of product margins on pharmacies. incentive to promote generics instead of brand-names. First, we construct a theoretical model where phar-macies can persuade patients with a brand-name prescription to purchase a generic version instead. We show that pharmacies.substitution incentives are determined by relative margins and relative patient copayments. Second, we exploit a unique product level panel data set, which contains information on sales and prices at both producer and retail level. In the empirical analysis, we .nd a strong relationship between the margins of brand-names and generics and their market shares. In terms of policy implications, our results suggest that pharmacy incentives are crucial for promoting generic sales.
TypeWorking paper
AccessOpen access
Appears in Collections:NIPE - Documentos de Trabalho

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