Financial incentives and physicians’ prescription decisions on the choice between brand-name and generic drugs: Evidence from Taiwan

Liu, Ya Ming; Yang, Yea Huei Kao; Hsieh, Chee Ruey

doi:10.1016/j.jhealeco.2008.10.009

Cited by 105 publications

(77 citation statements)

References 16 publications

(24 reference statements)

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“…An early pertinent study is the one by Morton-Jones and Pringle (1993), who compare prescription patterns of PD and non-PD providers in the UK, finding that the share of generic drugs is lower in the PD segment. Liu et al (2009) analyze the choice between generic and brand-name drugs in Taiwan, where PD is the dominant mode. According to them, financial incentives markedly influence this choice.…”

Section: Literature Reviewmentioning

confidence: 99%

Generic substitution, financial interests, and imperfect agency

Rischatsch

Trottmann

Zweifel

2013

Int J Health Care Finance Econ

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Policy makers around the world seek to encourage generic substitution. In this paper, the importance of prescribing physicians' imperfect agency is tested using the fact that some Swiss jurisdictions allow physicians to dispense drugs on their own account (physician dispensing, PD) while others disallow it. We estimate a model of physician drug choice with the help of drug claim data, finding a significant positive association between PD and the use of generics. While this points to imperfect agency, generics are prescribed more often to patients with high copayments or low incomes. While this points to imperfect agency, generics are prescribed more often to patients with high copayments or low incomes.JEL-Classification: I10, I18, I19

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Section: Literature Reviewmentioning

confidence: 99%

Generic substitution, financial interests, and imperfect agency

Rischatsch

Trottmann

Zweifel

2013

Int J Health Care Finance Econ

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“…There is also a recent paper by Liu et al (2009) that looks at the …nancial incentives for physicians to prescribe brand-names or generics in Taiwan. As in Japan, physicians both prescribe and dispense drugs and can pocket the pro…ts of doing so.…”

Section: Related Literaturementioning

confidence: 99%

“…15 The reference price, which is the maximum reimbursement for all products with a given molecule, is de…ned as a "discount" on the price cap for this molecule. 16 The …rms are free to charge prices above the reference price (though constrained by the price cap).…”

Section: Institutional Backgroundmentioning

confidence: 99%

Margins and Market Shares: Pharmacy Incentives for Generic Substitution

2010

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We study the impact of product margins on pharmacies' incentive to promote generics instead of brand-names. First, we construct a theoretical model where pharmacies can persuade patients with a brand-name prescription to purchase a generic version instead. We show that pharmacies'substitution incentives are determined by relative margins and relative patient copayments. Second, we exploit a unique product level panel data set, which contains information on sales and prices at both producer and retail level. In the empirical analysis, we …nd a strong relationship between the margins of brand-names and generics and their market shares. In terms of policy implications, our results suggest that pharmacy incentives are crucial for promoting generic sales.

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“…Evidence of moral hazard is reported by Chiappori et al (1998) and Coulson et al (1995), respectively, for the demand for home visits and the demand for prescription drugs. Liu et al (2009) show that pro…t incentives do a¤ect dispensing physicians, suggesting that physicians act as imperfect agents. Abood (1989) shows that dispensing doctors charge higher retail prices, whereas Rischatsch and Trottmann (2009) indicate that dispensing physicians have a greater probability of prescribing drugs that o¤er high margin, when compared with non-dispensing physicians.…”

Section: Introductionmentioning

confidence: 98%

Antibiotic consumption and the role of dispensing physicians

Filippini

Heimsch

Masiero

2014

Regional Science and Urban Economics

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The bene…ts of separating drug prescribing and dispensing are still unclear, in particular when drug consumption is characterized by important spillovers. We investigate the role of dispensing physicians in the consumption of antibiotics characterized by two opposite external e¤ects: infection prevention and control, and bacterial resistance. We model the interaction between competing physicians (with and without dispensing of drugs) and patients exposed to bacterial infections and show that spatial e¤ects of consumption may generate ambiguous results. Then, we propose an empirical exercise which exploits data from small geographic areas in Switzerland where two regimes -prescribing physicians and dispensing physicians -are possible. We consider spatial aspects of antibiotic consumption by means of combined spatial lag and spatial error econometric estimators for panel data (SARAR models). We …nd evidence that dispensing practices increase antibiotic use after controlling for determinants of demand and access, and spatial e¤ects. Whether dispensing practices lead to an increase of antibiotic consumption beyond socially optimal levels is unclear and requires further research.JEL classi…cation: I11; I18; D12; D21; D43; D81; D82

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Financial incentives and physicians’ prescription decisions on the choice between brand-name and generic drugs: Evidence from Taiwan

Cited by 105 publications

References 16 publications

Generic substitution, financial interests, and imperfect agency

Generic substitution, financial interests, and imperfect agency

Margins and Market Shares: Pharmacy Incentives for Generic Substitution

Antibiotic consumption and the role of dispensing physicians

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