Advanced

Price indices of drugs and the switching to new drugs two empirical examples

Gerdtham, Ulf-Göran LU ; Johannesson, Magnus; Gunnarsson, Bo ; Marcusson, Margareta and Henriksson, Freddie (1998) In PharmacoEconomics 13(1 ). p.71-80
Abstract

Standard price indices may not account for the price decrease that results when patients switch to pharmaceutical products for which their demand-reservation price exceeds the price of the new product. In a similar way, standard price indices may not account for the price increase that results when patients switch to pharmaceuticals for which the reservation price is below the price of the new drug. This study was designed to assess whether standard pharmaceutical price indices under- or overestimate the real price development resulting from new drug introductions. We illustrate that both situations may occur. In our first example, the switch from a branded to a generic drug, we showed that standard price indices recorded a price... (More)

Standard price indices may not account for the price decrease that results when patients switch to pharmaceutical products for which their demand-reservation price exceeds the price of the new product. In a similar way, standard price indices may not account for the price increase that results when patients switch to pharmaceuticals for which the reservation price is below the price of the new drug. This study was designed to assess whether standard pharmaceutical price indices under- or overestimate the real price development resulting from new drug introductions. We illustrate that both situations may occur. In our first example, the switch from a branded to a generic drug, we showed that standard price indices recorded a price increase of about 16%, although the price actually decreased by about 5%. In our second example, the introduction of new formulation of a currently marketed drug, we showed that standard price indices recorded a price increase of about 6%, when the actual price increased by more than 65%.

(Less)
Please use this url to cite or link to this publication:
author
publishing date
type
Contribution to journal
publication status
published
subject
in
PharmacoEconomics
volume
13
issue
1
pages
10 pages
publisher
Adis International
external identifiers
  • scopus:0031973411
ISSN
1170-7690
language
English
LU publication?
no
id
573bd3a1-b86c-4446-8f18-9582f38cc9f3
date added to LUP
2018-10-09 12:31:28
date last changed
2018-10-24 09:08:34
@article{573bd3a1-b86c-4446-8f18-9582f38cc9f3,
  abstract     = {<p>Standard price indices may not account for the price decrease that results when patients switch to pharmaceutical products for which their demand-reservation price exceeds the price of the new product. In a similar way, standard price indices may not account for the price increase that results when patients switch to pharmaceuticals for which the reservation price is below the price of the new drug. This study was designed to assess whether standard pharmaceutical price indices under- or overestimate the real price development resulting from new drug introductions. We illustrate that both situations may occur. In our first example, the switch from a branded to a generic drug, we showed that standard price indices recorded a price increase of about 16%, although the price actually decreased by about 5%. In our second example, the introduction of new formulation of a currently marketed drug, we showed that standard price indices recorded a price increase of about 6%, when the actual price increased by more than 65%.</p>},
  author       = {Gerdtham, Ulf-Göran and Johannesson, Magnus and Gunnarsson, Bo  and Marcusson, Margareta  and Henriksson, Freddie},
  issn         = {1170-7690},
  language     = {eng},
  month        = {12},
  number       = {1 },
  pages        = {71--80},
  publisher    = {Adis International},
  series       = {PharmacoEconomics},
  title        = {Price indices of drugs and the switching to new drugs two empirical examples},
  volume       = {13},
  year         = {1998},
}