Choosing among Competing Blockbusters: Does the Identity of the Third-party Payer Matter for Prescribing Doctors?

Dag Morten Dalen, Enrico Sorisio and Steinar Strøm ()
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Dag Morten Dalen: Norwegian School of Management BI
Enrico Sorisio: PharmaNess and University of Oslo

No 10/2009, Memorandum from Oslo University, Department of Economics

Abstract: TNF-alpha inhibitors represent one of the most important areas of biopharmaceuticals by sales, with three blockbusters accounting for 8 % of total pharmaceutical sale in Norway. With use of a unique natural policy experiment in Norway, this paper examines to what extent the identity of the third-party payer affects doctors choice between the three available drugs. We are able to investigate to what extent the price responsiveness of prescription choices is affected when the identity of the third-party payer changes. The three dominating drugs in this market, Enbrel, Remicade, and Humira, are substitutes, but have had different and varying funding schemes - hospitals and the national insurance plan. We find that treatment choices are price responsive, and that the price response increases when the doctor’s affiliated hospital covers the cost instead of a traditional fee-for-service insurance plan.

Keywords: Pharmaceuticals; discrete choice model; funding schemes (search for similar items in EconPapers)
JEL-codes: C35 D43 I18 L11 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2009-05-14
New Economics Papers: this item is included in nep-dcm and nep-hea
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Related works:
Working Paper: Choosing among Competing Blockbusters: Does the Identity of the Third-Party Payer Matter for Prescribing Doctors? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:osloec:2009_010

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