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Ulf Gerdtham. Photo.

Ulf Gerdtham

Professor

Ulf Gerdtham. Photo.

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

Author

  • Ulf-Göran Gerdtham
  • Magnus Johannesson
  • Bo Gunnarsson
  • Margareta Marcusson
  • Freddie Henriksson

Summary, in English

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%.

Publishing year

1998-12-01

Language

English

Pages

71-80

Publication/Series

PharmacoEconomics

Volume

13

Issue

1

Document type

Journal article

Publisher

Adis International

Topic

  • Economics
  • Health Care Service and Management, Health Policy and Services and Health Economy

Status

Published

ISBN/ISSN/Other

  • ISSN: 1170-7690