Tunçel, Tuba
(2022)
Should We Prevent Off-Label Drug Prescriptions? Empirical Evidence from France.
TSE Working Paper, n. 22-1383, Toulouse

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Abstract
After a drug obtains marketing authorization, the usage depends on the regulation of off-label pre-scriptions for unapproved indications. We investigate the impact of off-label prescription regulation on physicians’ behavior, patients’ health, treatment costs, and pharmaceutical firms’ pricing with a structural demand and supply model. Exploiting rich panel data on physicians’ activities and office visits in France over nine years, we use a model of prescription choice and health outcomes with unobserved patient-level heterogeneity. We identify the demand for on-label and off-label drugs and the effect of prescription choice on health outcomes. On the supply side, we use a Nash-in-Nash bargaining model between the government and the pharmaceutical companies that allows the partial identification of the marginal costs of drugs. Counterfactual simulations show that when we remove off-label drugs from the choice set of physicians, substitution to on-label drugs at constant prices would lead to an increase of 15% in the expenditure on prescription drugs. If we allow bargaining adjustment on drug prices under a ban on off-label prescriptions, the ban would further increase the treatment cost, by 26%, without improving health outcomes.
Item Type: | Monograph (Working Paper) |
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Language: | English |
Date: | September 2022 |
Place of Publication: | Toulouse |
JEL Classification: | C25 - Discrete Regression and Qualitative Choice Models; Discrete Regressors D12 - Consumer Economics - Empirical Analysis I10 - General |
Subjects: | B- ECONOMIE ET FINANCE |
Divisions: | TSE-R (Toulouse) |
Institution: | Université Toulouse 1 Capitole |
Site: | UT1 |
Date Deposited: | 18 Nov 2022 12:50 |
Last Modified: | 22 Jan 2025 13:28 |
OAI Identifier: | oai:tse-fr.eu:127510 |
URI: | https://publications.ut-capitole.fr/id/eprint/46438 |
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