Working Paper: NBER ID: w11223
Authors: John Cawley; John A. Rizzo
Abstract: In September 1997, the anti-obesity drugs Pondimin and Redux, ingredients in the popular drug combination fen-phen, were withdrawn from the market for causing potentially fatal side effects. That event provides an opportunity for studying how consumers respond to drug withdrawals. In theory, remaining drugs in the therapeutic class could enjoy competitive benefits, or suffer negative spillovers, from the withdrawal of a competing drug. Our findings suggest that, while the withdrawal of a rival drug may impose negative spillovers in the form of higher patient quit rates, on the whole non-withdrawn drugs in the same therapeutic class enjoy competitive benefits in the form of higher utilization.
Keywords: No keywords provided
JEL Codes: I1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Withdrawal of antiobesity drugs (L65) | Decrease in utilization of nonwithdrawn antiobesity drugs (L49) |
| Withdrawal of pain medications (J26) | Decrease in utilization of nonwithdrawn pain medications (I12) |
| Withdrawal of hypertension drugs (I11) | Decrease in utilization of nonwithdrawn hypertension drugs (I11) |
| Withdrawal of heartburn medications (I11) | Increase in utilization of nonwithdrawn heartburn medications (I11) |
| Withdrawal of cholesterol medications (J26) | Increase in utilization of nonwithdrawn cholesterol medications (I11) |