Working Paper: NBER ID: w19522
Authors: Peter Arcidiacono; Paul B. Ellickson; Peter Landry; David B. Ridley
Abstract: We estimate a model of drug demand and supply that incorporates insurance, advertising, and competition between branded and generic drugs within and across therapeutic classes. We use data on antiulcer drugs from 1991 to 2010. Our simulations show generics and ``me-too'' drugs each increased consumer welfare more than $100 million in 2010, holding insurance premiums constant. However, insurance payments in 2010 fell by nearly $1 billion due to generics and rose by over $7 billion due to me-too antiulcer drugs.
Keywords: No keywords provided
JEL Codes: I11; L13; L65
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Rebates (H23) | Pricing and Demand (D49) |
| Copayments (J33) | Pricing and Demand (D49) |
| Generics (C01) | Increased Consumer Welfare (D69) |
| Me-too Drugs (L65) | Increased Consumer Welfare (D69) |
| Generics (C01) | Reduced Insurance Payments (G52) |
| Me-too Drugs (L65) | Increased Insurance Payments (G52) |