Browsing by Subject "Prescription drugs"

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    Essays in pharmaceutical economics.
    (2010-04) Snider, Julia Thornton
    This dissertation is composed of three essays that which examine firms' decisions in developing and marketing prescription drugs and government's role in regulating that process. In the first essay, I look at two forms of promoting prescription drugs and how they interact. Because prescription drugs are chosen by the physician but consumed by the patient, firms have two potential targets for advertising. Advertising to doctors, called "detailing," has historically been more common, but in recent years direct-to-consumer (DTC) advertising has risen in prevalence. The question of how these two types of advertising interact is important for understanding the implications of controversial policies such as the bans on DTC advertising found in most countries. This essay develops an identification strategy exploiting policy differences between the United States and Canada to estimate a model of the joint effects of DTC advertising and detailing. I find a significant complementary effect between the two types: All else equal, for every additional dollar spent on DTC advertising, firms spend eight additional cents on detailing. This implies that DTC advertising bans decrease the effectiveness of detailing, and firms will do less as a result. In the second essay, I examine how advertising can have significant effects on the composition of drug usage between branded and generic drugs. Because generic drugs provide a lower-cost means of delivering drug treatment, such compositional effects are relevant to policymakers facing limited health care budgets. In particular, I focus on the effect of DTC advertising and detailing around the time of patent expiration. I create a model with two firms, one branded and one generic, to capture firms' DTC advertising and detailing decisions over the life of a drug. I compare the model's predictions under different regulations on price and advertising with data from the US and Canada. The model's results are consistent with the empirical observations that detailing and DTC advertising are complementary strategies and that optimal detailing and DTC advertising are lower in an environment where lower prices are set by regulators. In addition, numerical results demonstrate that when consumers are reluctant to switch between the branded drug and the generic, the branded firm may choose to engage in a preemptive advertising campaign prior to patent expiration to limit market share grab by the entering generic or even to delay generic entry. This finding helps explain similar preemptive DTC advertising and detailing campaigns observed in the data. Finally, in the third essay, I analyze the way in which governments optimally balance providing broad access to prescription drugs with creating incentives for innovation. Access and innovation are conflicting goals for price-regulating governments because a low price maximizes access but creates little incentive for innovation. To examine this issue, I model pharmaceutical price regulation as the result of a game between the governments of two countries of varying (economic) size. The agents of the game are a multinational pharmaceutical firm which produces a drug for the global market and the two national governments, each of which is assumed to maximize the welfare of the consumers residing within its borders. Prices are determined as a subgame perfect Nash equilibrium. Observing the two national prices, the firm then undertakes costly innovation to attain a drug quality level which is homogenous across the global market. My model produces the result that dividing the world's population into countries creates a free rider problem in which the public good of pharmaceutical innovation is underfunded. Moreover, whenever one of the two countries is considerably larger than the other, the unique Nash equilibrium is for the smaller country to set its drug price to marginal cost. This suggests that a large economy, such as the United States, will end up providing incentives for drug innovation all over the world.
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    Out-Of-Pocket Costs, Subsidies, And The Delivery Of Breast Cancer Care Among Elderly Women
    (2020-11) Qin, Xuanzi
    Out-of-pocket (OOP) costs can affect patients’ access to care and clinical outcomes. This dissertation takes advantage of the natural experiment provided by the combination of the introduction of generic aromatase inhibitors (AIs) and Medicare Part D low-income subsidy (LIS) policy to understand the role of OOP costs and subsidies in the delivery of breast cancer care. Guidelines suggest postmenopausal women diagnosed with hormone receptor-positive (HR+) breast cancer initiate adjuvant hormonal therapy with either AIs or tamoxifen. Switching to another therapy drug is an important strategy to manage treatment related side effects. Those diagnosed at early stages should also receive surgery and/or radiation before or after the initiation of hormonal therapy. The three AIs, anastrozole, exemestane and letrozole, went off patent sequentially in 2010 and 2011. Generic entry lowered OOP costs for AIs. Medicare Part D beneficiaries receiving LIS (subsidized) have substantial lower OOP costs for prescription drugs than those without LIS (unsubsidized), and thus are unlikely to be affected by changes in OOP costs due to generic entry. Medicare and Medicaid dually eligible beneficiaries (duals) receive LIS and Medicaid support for other medical services. This dissertation uses the Surveillance, Epidemiology and End Results (SEER)-Medicare linked database to identify the main study cohort that consists of women first diagnosed with HR+ breast cancer at age 65 years and older between 2007 and 2013 (N=93,650). I find the introduction of generic AIs was associated with improved pharmaceutical access indicated by increased probability of initiating any hormonal therapy drugs, increased timeliness of initiation and increased probability of receiving AIs over tamoxifen. Despite the minimal reduction in OOP costs for AIs after generic entry among the subsidized group, the subsidized experienced similar changes in outcomes like the unsubsidized group who had large reductions in OOP costs after generic entry. Thus, reduced OOP costs due to generic entry can only partially explain the improved access after generic entry. I also find that generic entry increased therapy adherence and reduced early discontinuation both directly through reduced OOP costs and through intermediary changes in switching behaviors resulted from reduced OOP costs. Generic entry affected therapy adherence and continuation without drug switches directly through reduced OOP costs, and thus increased adherence and continuation without drug switches after generic entry were only observed in the unsubsidized group. Generic entry might affect adherence and continuation with drug switches through both reduced OOP costs and improved management of side effects, and thus increased adherence and continuation with drug switches were observed in both the subsidized and unsubsidized groups. Finally, I find that although duals have their medical service use and prescription drug use subsidized, duals were less likely to be diagnosed at early stages, receive guideline-compliant treatment and initiate hormonal therapy than non-duals. Among duals, those with Medicaid coverage gaps or coverage changes were less likely to be diagnosed at early stages and more likely to discontinue their hormonal therapy than duals without any coverage changes. These results demonstrate that interventions simply reducing OOP costs may be not enough for improving access to care. The inconsistent relationships between costs and health care use and outcomes among the subsidized group highlight the importance to understand non-financial barriers to access, such as health insurance literacy, physician and pharmacist behaviors.
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    Prescription drug brand Web sites: Guidance where none exists
    (University of Minnesota, College of Pharmacy, 2010) Glinert, Lewis
    This paper applies insights from linguistics and discourse analysis to prescription drug brand Web sites, with special reference to the 100 top-selling drugs. Such sites give the outward appearance of being a place to go for straightforward information about a specific brand. In reality, they present a confused mix of brand information, health information and hype, muddled organization, and poor indication of authority, creating an imbalance between benefit and risk content. In so doing, they breach the letter and spirit of the regulations governing direct-to-consumer advertising, which the FDA has by default applied to such Web sites but which were not designed for this special type of discourse. The many communicative difficulties proven to be caused by Web sites in general, in particular for the elderly and less literate, also pose ethical problems. A rethinking of the verbal and visual design of these drug sites is needed -- and new regulatory guidance, for which this paper offers recommendations. At stake is not just the quality of health information at brand drug sites but also their credibility.
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    Selective Contracting in Prescription Drugs: The Benefits of Pharmacy Networks
    (Minnesota Journal of Law, Science and Technology, 2014-05) Shepherd, Joanna
    Selective contracting in health care involves contractual arrangements among insurers and health care providers that give covered individuals a financial incentive to obtain health care from a limited panel of providers. Although selective contracting has been an important strategy of health insurance plans for decades, it has only recently expanded to prescription drug coverage. Drug plans now create pharmacy networks that channel customers to in-network pharmacies. Pharmacies compete to be part of the networks by offering discounts on the drugs they sell to covered customers and drug plans. Although networks can lower prescription drug costs for drug plans and consumers, opponents have argued that they also reduce access to care because consumers can only visit certain providers. In this Article, I use the principles of economic theory, the conclusions of previous empirical studies, the determinations of the FTC, and proprietary data I obtained from the largest pharmacy benefit manager in the United States to analyze both the claims in support of pharmacy networks and the arguments against them. I find that pharmacy networks significantly lower the cost of prescription drugs for drug plans and consumers. Moreover, pharmacy networks have almost no effect on most consumers’ access to pharmacies; the overwhelming majority of consumers live near retail pharmacies that are included in exclusive pharmacy networks.