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Generic substitution, financial interests, and imperfect agency

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  • Maurus Rischatsch
  • Maria Trottmann
  • Peter Zweifel

Abstract

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. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Maurus Rischatsch & Maria Trottmann & Peter Zweifel, 2013. "Generic substitution, financial interests, and imperfect agency," International Journal of Health Economics and Management, Springer, vol. 13(2), pages 115-138, June.
    • Handle: RePEc:kap:ijhcfe:v:13:y:2013:i:2:p:115-138
    DOI: 10.1007/s10754-013-9126-5
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    Cited by:

    1. Daniel Burkhard & Christian P. R. Schmid & Kaspar Wüthrich, 2019. "Financial incentives and physician prescription behavior: Evidence from dispensing regulations," Health Economics, John Wiley & Sons, Ltd., vol. 28(9), pages 1114-1129, September.
    2. Peter Zweifel & Katharina Janus, 2017. "Medical ethics: enhanced or undermined by modes of payment?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(1), pages 119-129, January.
    3. Fiorentini, Gianluca & Bruni, Matteo Lippi & Mammi, Irene, 2022. "The same old medicine but cheaper: The impact of patent expiry on physicians’ prescribing behaviour," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 37-68.
    4. Alexander Ahammer & Ivan Zilic, 2017. "Do Financial Incentives Alter Physician Prescription Behavior? Evidence from Random Patient-GP Allocations," Working Papers 1701, The Institute of Economics, Zagreb.
    5. Maurus Rischatsch, 2014. "Lead me not into temptation: drug price regulation and dispensing physicians in Switzerland," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(7), pages 697-708, September.
    6. Skipper, Niels & Vejlin, Rune, 2015. "Determinants of generic vs. brand drug choice: Evidence from population-wide Danish data," Social Science & Medicine, Elsevier, vol. 130(C), pages 204-215.
    7. Rachamin, Yael & Meier, Rahel & Valeri, Fabio & Rosemann, Thomas & Muheim, Leander, 2021. "Physician-dispensing as a determinant of clinical and process measurements in patients at increased cardiovascular risk: A cross-sectional study in Swiss general practice," Health Policy, Elsevier, vol. 125(10), pages 1305-1310.
    8. Müller, Tobias & Schmid, Christian & Gerfin, Michael, 2023. "Rents for Pills: Financial incentives and physician behavior," Journal of Health Economics, Elsevier, vol. 87(C).
    9. Aida Isabel Tavares, 2017. "Generic substitution policy, an incentive approach," Computational and Mathematical Organization Theory, Springer, vol. 23(2), pages 199-220, June.
    10. Boris Kaiser & Christian Schmid, 2016. "Does Physician Dispensing Increase Drug Expenditures? Empirical Evidence from Switzerland," Health Economics, John Wiley & Sons, Ltd., vol. 25(1), pages 71-90, January.
    11. Schumacher, Heiner & Kesternich, Iris & Kosfeld, Michael & Winter, Joachim, 2014. "Us and Them: Distributional Preferences in Small and Large Groups," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 453, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    12. Stacherl, Barbara & Renner, Anna-Theresa & Weber, Daniela, 2023. "Financial incentives and antibiotic prescribing patterns: Evidence from dispensing physicians in a public healthcare system," Social Science & Medicine, Elsevier, vol. 321(C).
    13. Katharina Elisabeth Fischer & Tom Stargardt, 2016. "The diffusion of generics after patent expiry in Germany," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(8), pages 1027-1040, November.
    14. Rischatsch, Maurus, 2015. "Who joins the network? Physicians’ resistance to take budgetary co-responsibility," Journal of Health Economics, Elsevier, vol. 40(C), pages 109-121.
    15. Zweifel, Peter & Janus, Katharina, 2016. "Physician ethics: undermined or enhanced by modes of payment?," VfS Annual Conference 2016 (Augsburg): Demographic Change 145708, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    Physician agency; Prescribing behavior; Drug dispensing; Generic substitution; Brand-name drugs; I10; I18; I19;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I19 - Health, Education, and Welfare - - Health - - - Other

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