Please use this identifier to cite or link to this item: https://hdl.handle.net/1822/25144

TitleMargins and market shares : pharmacy incentives for generic substitution
Author(s)Brekke, Kurt R.
Holmas, Tor Helge
Straume, Odd Rune
KeywordsPharmaceuticals
Pharmacies
Generic substitution
Issue date2013
PublisherElsevier
JournalEuropean economic review
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 pharmacies 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 find a strong relationship between the margins of brandnames and generics and their market shares. This relationship is stronger for pharmaceuticals under reference pricing rather than coinsurance. In terms of policy implications, our results suggest that pharmacy incentives are crucial for promoting generic sales.
TypeArticle
URIhttps://hdl.handle.net/1822/25144
DOI10.1016/j.euroecorev.2013.02.005
ISSN0014-2921
Publisher versionhttp://www.sciencedirect.com/science/article/pii/S0014292113000299#
Peer-Reviewedyes
AccessRestricted access (UMinho)
Appears in Collections:NIPE - Artigos em Revistas de Circulação Internacional com Arbitragem Científica

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