title: The diffusion of generics after patent expiry in Germany.
abstract: To identify the influences on the diffusion of generics after patent expiry, we analyzed 65 generic entries using prescription data of a large German sickness fund between 2007 and 2012 in a sales model. According to theory, several elements are responsible for technology diffusion: (1) time reflecting the rate of adaption within the social system, (2) communication channels, and (3) the degree of incremental innovation, e.g., the modifications of existing active ingredient's strength. We investigated diffusion in two ways: (1) generic market share (percentage of generic prescriptions of all prescriptions of a substance) and, (2) generic sales quantity (number of units sold) over time. We specified mixed regression models. Generic diffusion takes considerable time. An average generic market share of about 75 % was achieved not until 48 months. There was a positive effect of time since generic entry on generic market share (p < 0.001) and sales (p < 0.001). Variables describing the communication channels and the degree of innovation influenced generic market share (mostly p < 0.001), but not generic sales quantity. Market structure, e.g., the number of generic manufacturers (p < 0.001) and prices influenced both generic market share and sales. Imperfections in generic uptake through informational cascades seem to be largely present. Third-party payers could enhance means to promote generic diffusion to amplify savings through generic entry.
authors.affiliation: Hamburg Center for Health Economics, Universität Hamburg, Esplanade 36, 20354, Hamburg, Germany. katharina.fischer@uni-hamburg.de.
authors.forename: Katharina Elisabeth
authors.initials: KE
authors.lastname: Fischer
authors.affiliation: Hamburg Center for Health Economics, Universität Hamburg, Esplanade 36, 20354, Hamburg, Germany.
authors.forename: Tom
authors.initials: T
authors.lastname: Stargardt
mesh_terms: D004059:Diffusion of Innovation; D016527:Drug Costs / Q000706:statistics & numerical data; D004345:Drug Industry / Q000191:economics*; D004363:Drug Utilization; D016568:Drugs, Generic / Q000191:economics*; D004465:Economic Competition; D005858:Germany; D006801:Humans; D017059:Models, Econometric; D010330:Patents as Topic; D013997:Time Factors
chemical_list: D016568:Drugs, Generic
keywords: Generic entry; Generic market share; Market regulation; Off-patent markets; Pharmaceutical industry; Product life cycle