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Title:Generic substitution PDF Logo
Authors:Furu, Kari
Dalen, Dag Morten
Locatelli, Marilena
Strøm, Steinar
Issue Date:2008
Series/Report no.:Memorandum // Department of Economics, University of Oslo 2008,11
Abstract:We examine the importance of prices, doctor and patient characteristics, and market institutions for the likelihood of choosing generic drugs instead of the more expensive original brand-name version. Using an extensive dataset extracted from The Norwegian Prescription Database (NorPD) containing all prescriptions written in March 2004 and 2006 on 23 different drugs (chemical substances) in Norway, we find strong evidence for the importance of both doctor and patient characteristics for the choice probabilities. The price difference between brand and generic versions and insurance coverage both affect generic substitution. Moreover, controlling for the retail chain affiliation of the dispensing pharmacy, we find that pharmacies play an important role for patients' willingness to substitute. In markets with more recent entry of generic drugs, the brand-name loyalty proves to be much stronger, giving less explanatory power to our demand model.
Subjects:Generics
substitution
microdata
random utility model
JEL:I18
L65
Document Type:Working Paper
Appears in Collections:Memorandum, Department of Economics, University of Oslo

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