Title page for ETD etd-504320749731261

Type of Document Dissertation
Author Howard, Robert E.
URN etd-504320749731261
Title Factors Influencing Physicians' Willingness to Substitute Generics For Brand-Names when Prescribing Antimicrobial Drugs
Degree Master of Arts
Department Economics (Arts and Sciences)
Advisory Committee
Advisor Name Title
Porter, William R.
Reid, Brian K.
Wentzler, Nancy A. Committee Chair
  • generic drugs
  • physician behavior
  • generic substitution
  • perscription drug prices
Date of Defense 1997-04-24
Availability unrestricted
Physicians often continue to prescribe brand-name drugs to their patients even when less expensive generic equivalents are available. In a 1994 study, Judith Hellerstein advances two hypotheses to explain this behavior. First, doctors may consciously conclude that certain brand-name drugs impart a relative therapeutic benefit that outweighs their higher cost. Second, physicians may choose to prescribe brand-name drugs without evidence of therapeutic superiority if neither they nor their insured patients bear the increased cost of these drugs. The second hypothesis implies that moral hazard is evident in physicians' prescribing behavior. Hellerstein's findings support neither hypothesis, but her estimation equation does not explicitly capture the effects of brand-name/generic price differentials and information diffusion on the probability of generic prescription. The author adapts Hellerstein's theoretical model to a modified estimation equation that incorporates these effects and uses it to create new estimates based on data on antimicrobial prescriptions from the 1994 National Ambulatory Medical Care Survey (NAMCS).

Unexpectedly, the results appear to affirm both hypotheses. The evidence for moral hazard is particularly strong, as self-paying patients are significantly more likely than patients with Medicare or private insurance to be prescribed the generics that are cheapest relative to their brand-name counterparts. The author also finds that certain popular antimicrobial drugs such as amoxicillin and sulfamethoxazole/trimethoprim are prescribed in the same form (generic or brand-name) by most doctors to most patients. The market power exhibited by these preferred forms leads the author to conclude that they are "brands" in the economic sense.

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