Information and diffusion of new prescription drugs

Abstract

This is the accepted version of the paper.This version of the publication may differ from the final published version. Permanent repository link AbstractThis paper examines the role of different product information flows on the diffusion of new pharmaceuticals. Given the innovative nature of pharmaceutical drugs and their impact on health care expenditure there is a surprisingly small literature devoted to this topic. Some information flow mechanisms have been examined individually in the literature, but very few have captured the simultaneous impact of these mechanisms on up-take and diffusion. This paper uses the up-take of statins as an example. Diffusion of this therapeutical group is expressed as a function of four specific informational channels: self-experience, consumption externalities, scientific evidence and marketing. In addition to this, the influence of economic factors is tested to examine whether they have any role in drug diffusion. Prescription data from over 130 GP practices in the UK during 1991-2004 are used to test the econometric specification applying dynamic panel data methods. Results suggest individual selfexperience and clinical evidence are major factors promoting diffusion, while there is an inverse relationship with GP practice size and diffusion. Having controlled for these factors financial incentives and marketing appear to play little role.JEL classification: I11, I18, L65

Models and Methods of Classification of Innovation Market Information

“…Issues of promoting [5] innovations are of particular importance in the context of the digital transformation of the economy. A new type of interaction and a management system for the relationship of potential customers (buyers, customers) with manufacturers of high-tech goods is being built.…”

The impact of drug quality ratings from health technology assessments on the adoption of new drugs by physicians in Germany

“…Because HTA information is generated in nearly every European country and, in the United States, public and private sector initiatives are emerging to provide comparable information (Hwang et al, 2017; Neumann & Cohen, 2015), our results are highly relevant beyond Germany. We expect physicians elsewhere to react in similar ways because we assume that the factors known to influence the latent utility function of physicians are independent of the health system context, including, most importantly, manufacturers' promotional spending, experience, and provider characteristics (Azoulay, 2002; Bradford & Kleit, 2015; Serra‐Sastre & McGuire, 2013; Stern & Wright, 2016).…”

“…Meanwhile, at the micro level, it is physicians who ultimately decide which drugs they will prescribe to their patients. Research on physician learning and the adoption of health technologies among physicians suggests that prescribing behavior is influenced by a range of information sources, including the promotional activities of manufacturers (Berndt, Gibbons, Kolotilin, & Taub, 2015; Berndt, Pindyck, & Azoulay, 2000; Kremer, Bijmolt, Leeflang, & Wieringa, 2008), physicians' own previous experience (Coscelli, 2003; Coscelli & Shum, 2004), and signals from market authorization documents (Kalra, Li, & Zhang, 2011; Serra‐Sastre & McGuire, 2013).…”

“…That is, drugs are assigned priority review if they are expected to represent major improvements in safety or effectiveness compared with existing treatments. Other studies have used negative information from safety warnings released by market authorization agencies or information about clinical effectiveness (Azoulay, 2002; Bradford & Kleit, 2015; Serra‐Sastre & McGuire, 2013). Azoulay (2002) found evidence that if a drug has greater clinical effectiveness, uncertainty is reduced, leading to increased sales.…”

“…Venkataraman and Stremersch (2007) use data from the appraisals published by the UK National Institute of Health and Care Excellence (NICE) as a proxy for product quality, that is, a meta‐analytic z score for product effectiveness, but not the actual guidance for the product's use in the National Health Service (NHS). Serra‐Sastre and McGuire (2013) use a matrix of variables that represent the flow of information about product quality but do not consider information signals provided by HTA agencies.…”