Healthy Skepticism Library item: 9301

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

Mishra A, Rappaport HM.
Alteration of the Total Prescription Volume of a Product Class by a New Molecular Entity
APhA Annual Meeting 1994 Mar; 141:58

Abstract:

The pharmaceutical industry can be characterized as research-intensive and innovation-dependent. The research intensity is evident from its huge R&D expenditures, a fact used by the pharmaceutical industry to defend its pricing policies. According to Pharmaceutical Manufacturers’ Association (PMA), 80% of their R&D expenditure is on developing New Molecular Entities (NMEs). The industry is highly regulated and has stringent patent protection. Therefore, development of NMEs is also a tool of product differentiation and means of entering the market. If an NME has better therapeutic value over existing products in the class, it should significantly increase the total prescription volume of its product class. The objective of the study was to see the effect that the entry of NMEs have on the total prescription volume of their respective product classes. Prescription data were provided by IMS America Ltd. The data were obtained for 36 months before and after the introduction of an NME The study had time series design. The data were autocorrelated which violates the assumptions of linear regression. Therefore, the data were analyzed using autoregression procedure. Autoregression was done on SAS/ETS version 6.07 using PROC AUTOREG. An intervention model was used to achieve the objective. The results indicate no significant change in the total prescription volume of a product class due to the entry of an NME. The results of the study suggest that the growth of an NME may be due to substitution rather than enhancement of usage of the product class.