Scandinavian Working Papers in Economics

Umeå Economic Studies,
Umeå University, Department of Economics

No 742: Consumer Loyalty in the Swedish Pharmaceuticals Market

David Granlund () and Niklas Rudholm ()
Additional contact information
David Granlund: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden
Niklas Rudholm: Department of Economics, Dalarna University, Postal: SE-781 88 Borlänge, Sweden

Abstract: This paper reports on a study of the prescribing physician's influence on consumers' choice between medically equivalent pharmaceuticals. The study was performed using a dataset of 666,000 observations in which consumers were asked whether they were prepared to pay the price difference in order to obtain the prescribed pharmaceutical instead of the cheapest available substitute. The main results support the hypothesis that prescribing physicians have an impact on consumers' choice between medically equivalent pharmaceutical products.

Keywords: Brand loyalty; Branded Generics; Doctors; Parallel import; Generic competition; Secondary Brand

JEL-codes: D12; I11

21 pages, First version: June 17, 2008. Revised: February 21, 2012.

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