The Importance of the Physician in the Generic and Trade-name Article

The Importance of the Physician in the Generic and Trade-name Prescription Decision - Article Example The time frame and period analyzed in the whole article ranges between 1984 and 1996. This is evident during the introduction of generics in 1984, when all firms that wanted to market, a post-patent expiration generic had to show the efficacy and safety of the drug through tests to the Food and Drug Administration. In the course of time, the Congress implemented the permissive substitution laws in an effort to encourage the use of generic drugs. In addition, the research shows that in 1996, information from IMS America Inc. showed that managed care payments such as private managed care as HMOS AND Medicaid HMOs amounted for over 505 of dollar revenues for pharmaceutical retail sales (Hellerstein, 109). The data sources used in the analysis involve information from a survey of physicians, their patients, and drugs prescribed. In this case, physicians use patient by patient basis to test whether physicians prescribe generics to patients who are not covered by insurance and the effects of state legislation on generic prescription (Hellerstein, 109). The main findings of the whole research show that physicians are important agents in prescription decisions. Therefore, identifying the sources of heterogeneity in behavior across physicians is an integral factor of understanding how the markets for prescription drugs operate. Individuals learn how physicians behavior whenever they have different information and incentives in the areas of specialization. The new information learned from the article indicates that changes are still occurring among physicians through the continued growth of managed care due to increase in market share of generic drugs. At the same time, there probabilities that emphasis on cost containment in Health Maintenance Organizations may cause price differential between a trade name and generic drugs since there are existing negotiations with manufacturers on price discounts.