The Importance of the First Generic Substitution: Evidence from Sweden

39 Pages Posted: 4 May 2022

See all articles by Aljoscha Janssen

Aljoscha Janssen

Singapore Management University

David Granlund

Umeå University

Date Written: April 1, 2022


We analyze changes in the willingness to substitute from prescribed pharmaceuticals to more affordable generic equivalents in response to the first experience with a substitution. Using Swedish individual-level data of prescribed and dispensed pharmaceuticals, we employ a dynamic event study and an instrumental variable approach to show that an initial substitution reduces the probability of opposing subsequent substitutions by 39 percentage points. The impact of a first substitution is especially large among elderly patients. We recommend that policy-makers target patients with a history of opposed substitution and offer additional discounts to promote substitution as long-term savings outweigh one-time costs.

Keywords: Generic Substitution, Pharmaceuticals, Health Care Costs

JEL Classification: D12, I11, I12

Suggested Citation

Janssen, Aljoscha and Granlund, David, The Importance of the First Generic Substitution: Evidence from Sweden (April 1, 2022). Available at SSRN: or

Aljoscha Janssen (Contact Author)

Singapore Management University ( email )

Li Ka Shing Library
70 Stamford Road
Singapore 178901, 178899

David Granlund

Umeå University ( email )

Samhallsvetarhuset, Plan 2
Umea University
Umeå, SE 901 87

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