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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/52442
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| Title: | | A probability approach to pharmaceutical demand and price setting: Does the identity of the third-party payer matters for prescribing doctors?  |
| Authors: | | Dalen, Dag Morten Locatelli, Marilena Sorisio, Enrico Strøm, Steinar |
| Issue Date: | | 2011 |
| Series/Report no.: | | CESifo working paper: Industrial Organisation 3643 |
| Abstract: | | TNF-alpha inhibitors represent one of the most important areas of biopharmaceuticals by sales, with three blockbusters accounting for 8 per cent of total pharmaceutical sale in Norway. Novelty of the paper is to examine, with the use of a unique natural policy experiment in Norway, 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. A stochastic structural model for the three drugs, covering demand and price setting, is estimated in a joint maximum likelihood approach. We find that doctors are more responsive when the costs are covered by the hospitals compared to when costs are covered by national insurance. |
| Subjects: | | pharmaceuticals discrete choice model funding-schemes |
| JEL: | | C35 D43 I18 L11 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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