Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/52442
Authors: 
Dalen, Dag Morten
Locatelli, Marilena
Sorisio, Enrico
Strøm, Steinar
Year of Publication: 
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

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