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Ask Your Doctor if this Product is Right for You: A Bayesian Zero-Inflated Multinomial Joint Model for Patient Drug Requests and Physician Prescriptions

48 Pages Posted: 9 Nov 2016 Last revised: 24 Feb 2017

Bhuvanesh Pareek

Indian Institute of Management (IIM), Indore

Qiang Liu

Purdue University - Krannert School of Management

Pulak Ghosh

Indian Institute of Management (IIMB), Bangalore

Date Written: February 2017

Abstract

The goal of this research is to study physicians' prescription decisions and patients' drug request behaviors jointly. We have developed a new zero-inflated multinomial (ZiMNL) choice model to study patient drug request data with excessive zero requests and a standard multinomial logit (MNL) model to capture physician prescriptions decisions. The two models are joined by a flexible nonparametric multivariate distribution for their random effects. We also adopt an analytically consistent expression for the interaction effect in our non-linear and joint modeling framework. We apply our model to a unique physician panel data set from the Erectile Dysfunction category. Our key empirical findings include the following: (1) the triggering of drug requests by DTCA is complicated with category level DTCA reducing patients' probability of making drug requests and drug specific DTCA driving drug requests for the advertised drug; (2) patient characteristics may play a role in the impact of DTCA on drug requests and the impact of patient requests on physicians' prescription decisions; (3) patient drug requests have a significant impact on physicians' prescription decisions and patients can be consistent with physicians in choosing a drug based on patient diagnosis level and some unobserved factors; (4) there are significant correlations among physician-level random effects that drive both patients' drug requests and physicians' prescription decisions, which validates the joint modeling approach.

Keywords: zero-inated, Bayesian, multinomial Logit, patient requests, physician prescriptions, pharmaceutical market

Suggested Citation

Pareek, Bhuvanesh and Liu, Qiang and Ghosh, Pulak, Ask Your Doctor if this Product is Right for You: A Bayesian Zero-Inflated Multinomial Joint Model for Patient Drug Requests and Physician Prescriptions (February 2017). IIM Bangalore Research Paper No. 526. Available at SSRN: https://ssrn.com/abstract=2866334 or http://dx.doi.org/10.2139/ssrn.2866334

Bhuvanesh Pareek (Contact Author)

Indian Institute of Management (IIM), Indore ( email )

Prabandh Sikhar
Rau-Pithampur Road
Indore, Madhya Pradesh 453331
India

Qiang Liu

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

Pulak Ghosh

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

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