Defining Relevant Markets for Pharmaceuticals

Abstract

To identify the relevant product markets for Swedish pharmaceuticals, a spatial econometrics approach is employed. First, we calculate Moran's Is for different market definitions and then we use a spatial Durbin model to determine the effect of price changes on quantity sold of own and competing products. As expected, the results show that competition is strongest between close substitutes; however, the relevant product markets for Swedish pharmaceuticals extend beyond close substitutes down to products included in the same class on the four‐digit level of the Anatomic Therapeutic Chemical system as defined by the World Health Organization. The spatial regression model further indicates that increases in the price of a product significantly lower quantity sold of that product and in the same time increase the quantity sold of competing products. For close substitutes (products belonging to the same class on the seven‐digit level of the Anatomic Therapeutic Chemical system), as well as for products that, without being close substitutes, belong to the same therapeutic/pharmacological/chemical subgroup (the same class on the five‐digit level of the Anatomic Therapeutic Chemical system), increased competition is also visible after 1 July 2009 when the latest policy changes with regards to pharmaceuticals have been implemented in Sweden.

Assessing the mediating role and multiple group analysis in physicians’ habit persistence toward prescribing behavior using SmartPLS software

“…The present investigation underscores the criticality of considering brand attributes and drug promotion when prescribing and that physician's habit persistence is the underlying mechanism by which these efforts may impact prescribing behavior. These conclusions supplement previous analyses (Mihaescu and Rudholm, 2017;Mehralian et al, 2016;Abdul Waheed et al, 2011;Murshid and Mohaidin, 2017b). This result also supports that Yemen physicians, regardless of their practice, consider brand attributes and drug promotion when prescribing, and these marketing efforts impact their habit persistence, which is consistent with prior analyses (Mihaescu and Rudholm, 2017;Mehralian et al, 2016;Abdul Waheed et al, 2011;Murshid and Mohaidin, 2017b).…”

“…These conclusions supplement previous analyses (Mihaescu and Rudholm, 2017;Mehralian et al, 2016;Abdul Waheed et al, 2011;Murshid and Mohaidin, 2017b). This result also supports that Yemen physicians, regardless of their practice, consider brand attributes and drug promotion when prescribing, and these marketing efforts impact their habit persistence, which is consistent with prior analyses (Mihaescu and Rudholm, 2017;Mehralian et al, 2016;Abdul Waheed et al, 2011;Murshid and Mohaidin, 2017b).…”

“…This could be attributed to the prescribers' positive experience with brand drugs, which aim to alleviate patients' suffering and improve their quality of life (Zerzan et al, 2011). In addition, while examining the mediating role of physician's habit persistence in the relationship between brand features, drug promotion Physicians' habit persistence variables and prescription behavior can reveal the mechanism underlying these effects; past studies have predominantly focused on physician's habit persistence as an outcome (Mehralian et al, 2016;Abdul Waheed et al, 2011;Sood et al, 2014;Mihaescu and Rudholm, 2017).…”

“…In addition, as suggested by Abdul Waheed et al (2011), brand loyalty may stem from experience and subsequently foster persistence in prescribing patterns, thereby influencing physician responsiveness to promotional efforts. A comprehensive literature analysis suggests that brand attributes and drug marketing have a favorable impact on habit behavior, prescription behavior decisions and ultimately, physician prescription decisions, leading to either physician’s habit persistence or indirect marketing behavior (Mehralian et al , 2016; Abdul Waheed et al , 2011; Sood et al , 2014; Mihaescu and Rudholm, 2017).…”

“…According to the research by Godin et al (2008) and Lally and Gardner (2013), a physician’s habit persistence entails frequent repetition of behavior in a consistent environment, for instance, prescribing a medication, which may become routine. The marketing efforts of pharmaceutical companies can stimulate the said behavior without necessitating conscious decision-making on every occasion (Mihaescu and Rudholm, 2017; Crea et al , 2019). Physician’s habit persistence limits the predictive power of marketing efforts on prescribing behavior by significantly affecting brand loyalty and future repeated use (Hellerstein, 1998; Murshid and Mohaidin, 2017a).…”