Characteristics of Demand for Pharmaceutical Products: an Examination of four Cephalosporins

S Ellison, Iain M. Cockburn (), Zvi Griliches and J Hausman

Working papers from Massachusetts Institute of Technology (MIT), Department of Economics

Abstract: In this paper we model demand for four cephalosporins and compute own- and cross-price elasticities between branded and generic versions of the four drugs. We model demand as a multistage budgeting problem, and argue that such a model is appropriate to the multistage nature of the purchase of pharmaceutical products, in particular, the prescribing and dispensing stages. We find quite high elasticities between generic substitutes and also significant elasticities between some therapeutic substitutes.

Keywords: DEMAND; PHARMACEUTICAL INDUSTRY (search for similar items in EconPapers)
JEL-codes: L65 (search for similar items in EconPapers)
Date: 1996
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Journal Article: Characteristics of Demand for Pharmaceutical Products: An Examination of Four Cephalosporins (1997)
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