Price and Market-Share Competition of Anti-Ulcer Gastric Medications in the Ohio Medicaid Market

摘要

Objectives: Our objectives are (i) to determine whether an increase in competition among companies selling prescription anti-ulcer pharmaceuticals has an impact on drug costs for Ohio Medicaid; (ii) to separate competition's impact into its effect on generic drugs and its effect on branded drugs; and (iii) to distinguish between inter-drug (market) and intra-drug (generic) competition in their effects on drug-prescription reimbursements and utilisation.Methods: Based on Ohio Medicaid pharmacy claims data, we constructed quarterly prescription numbers as well as per-prescription reimbursement figures for each of the anti-ulcer gastric medications that Medicaid reimburses, from quarter 1 1997, through quarter 3 2002. We measured two dependent variables: the change in per-prescription reimbursement and the change in market share. Economic determinants included change in the producer price index, change in the number of brand-name drugs in the submarket (histamine H2-receptor antagonists, coating agent or proton pump inhibitors), direct-to-consumer advertising expenditures, and change in the number of generic manufacturers. An unbalanced panel data set was transformed to correct for serial correlation; variables were added to account specifically for intra-drug error correlation; and models were then estimated using ordinary least squares.Results: Both list prices and per-prescription reimbursements for branded drugs have increased over the last decade, despite the introduction of a number of new branded and generic drugs. Competition affects brand-name drugs through their market shares; branded-drug market shares have decreased as generic drug companies have entered the market (p < 0.001). Both average wholesale price and per-prescription Medicaid reimbursement for all generic drugs were significantly lower than for their brand-name counterparts, and decreased over time. For generic drugs, the rise in the number of generic companies had a significant negative impact on generic drug prescription costs (p = 0.047).Conclusions: Brand-name drug prices increase regardless of new drug entry in the market. Competition among generic companies leads to a decrease in prescription costs for generic drugs only. Ohio Medicaid benefits in the branded-drug market through a fall in branded drug utilisation, as generic competition rises. Ohio Medicaid can lower costs further by taking better advantage of between-brand competition, through the use of a formulary, and between-market competition, through the use of other cost-containment strategies.