karine lamiraud, konrade von bremen, cam donaldson** *university of lausanne, institute of health...

Karine Lamiraud*, Konrade von Bremen*, Cam Donaldson**

*University of Lausanne, Institute of Health Economics and Management (IEMS), DEEP-HEC**Institute of Health and Society, Newcastle University, UK

The impact of information on patient preferences in different delivery patterns: a contingent valuation study of prescription versus OTC

Toulouse, January 25 – 26 2008

1. Background

The impact of the level of information on WTP may depend upon the delivery mechanism. This has not been assessed yet.

Increasing interest in the use of CV for measuring WTP1. CV methods

2. Major concern

Influence of additional information (Tversky & Kahneman, 1981)

Empirical studies (Donaldson & Schakley 1997; Lee et al 1998; Protière et al 2004)

Information about health attributes of the programmes

Inconsistent effects of additional information on WTP values

3. Impact of information

INTRODUCTION


2. Objectives

INTRODUCTION

This study aims at assessing the impact of information on preferences in different delivery patterns (prescription versus OTC systems)

This study aims at assessing the impact of information on preferences in different delivery patterns (prescription versus OTC systems)


3. Policy relevance

INTRODUCTION

This investigation is driven by the fact that many countries have expanded efforts to move prescribed drugs onto OTC status

Previous works have focused on assessing the change in benefits using a consumer surplus approach based on observed demand curves (Ryan and Yule, 1990; Temin, 1983; Shih et al., 2002)

However, the methods employed were not able to test the susceptibility of benefits to the level of information

A CV approach is used

This investigation is driven by the fact that many countries have expanded efforts to move prescribed drugs onto OTC status

Previous works have focused on assessing the change in benefits using a consumer surplus approach based on observed demand curves (Ryan and Yule, 1990; Temin, 1983; Shih et al., 2002)

However, the methods employed were not able to test the susceptibility of benefits to the level of information

A CV approach is used


Outline

WTP study

Theoretical background

Empirical analysis

Results

Conclusion


1. Theoretical framework

Two simple uses of well-known economic theories help us derive two hypotheses

Agency and Information

“information hypothesis”

Demand theory and the impact of moving to OTC

“switching hypothesis”

THEORETICAL FRAMEWORK


2. Agency and Information

When visiting a doctor, the patient may mostly rely

on the doctor’s knowledge

Opting for an OTC medicine requires full individual

choice and self-administration

The impact of information on WTP will be more significant in the OTC scenario than in the prescription one


« Information assumption »


Cost

Number of consumers

QOTCQp

OTCP

pP

O

A

B

C

3. Demand theory


The figure depicts the demand curve for the case of a hypothetical drug

The cost of the drug is assumed to be fully borne by the consumer

We assume that POTC < Pp (Ryan and Yule, 1990)


Cost

Number of consumers

QOTCQp

OTCP

pP

O

A

B

C

4. « Switching assumption »

(S1) the total WTP is expected to be higher in the OTC scenario than in the prescription one

(S2) more “0” answers are to be expected in the prescription scenario

(S3) if zero “answers” are excluded WTP is expected to be higher in the prescription scenario



5. A test of the validity of the CV approach

Through basing our analyses on the

assumptions arising from these theories, a

useful (and new) test of the validity of

the CV approach is thus provided



1. WTP Study

They offer symptom reduction by 1.5 days

Since their release, NAIs have been prescription drugs

Due to benign side effects, they might also qualify for OTC

Neuraminidase Inhibitors (NAIs)

These effects will be assessed within a study measuring patient preferences concerning a new class of drugs in influenza disease

A CV study was performed to compare preferences between both delivery systems. It took place in the French speaking part of Switzerland (winter 2001, summer 2001)

DATA


2. General information to all study participants

Influenza is in general a benign disease

Self-limited to 5-7 days

Symptoms = fever cough and runny nose with sudden appearance

Risk of complications for children, the old and frail, and chronically ill

Vaccination is available

Vaccination does not give a complete protection against influenza.

Big economic impact due to influenza

Pandemic outbreak can be disastrous to the country

DATA

All participants were first provided with some information on influenza as it was considered that respondents should have a comparable understanding of the disease


3. Testing for informational effect

Basic Information

able to reduce symptom by 1.5 days

needs to be taken within 48 hours

after onset of symptoms

side effects are very mild

Extended Information

able to reduce symptom by 1.5 days

needs to be taken within 48 hours

after onset of symptoms

side effects are very mild

not able to prevent/cure the flue

not active against cold

does not replace vaccination

is not active out of the period of

influenza epidemics of about 4 months

DATA

Respondents were randomly assigned into basic or extended information


4. WTP questionnaires

After being provided with some information all respondents were asked to imagine that they were affected by influenza and to answer 2 WTP questions framed into 2 scenarios

How much are you willing to pay for a

prescription drug which is able to reduce the

duration of the flue by 1.5 days?

This drug is not reimbursed, the consultation

would need to be paid for

How much are you willing to pay for an OTC

drug which is able to reduce the duration of the flue by 1.5 days?

This drug can be bought without restriction in

the pharmacy

First scenario Second scenario

DATA


5. Bidding ranges

Frs 0 Frs. 1 - 20 Frs. 21 - 40 Frs. 41 - 60 Frs. 61 –80 Frs. 81 - 100 Frs. 101 –150 Frs. 151 - 250 Frs. 251 – 500. - Frs. 501- 1'000

More than Frs.1'000

DATA

A payment card system was used to facilitate answers

To exclude starting point bias the order of ranges was randomized (increasing or decreasing)


Outline

WTP study

Theoretical background

Empirical analysis

Results

Conclusion


1. Overview of empirical strategy

The empirical analysis aims at testing the information and switching hypotheses. We conducted 3 main analyses.

EMPIRICAL ANALYSIS

We examined the factors associated with WTP : - information level in the OTC and prescription scenario (I) - scenario (S1)

We examined consistency with S2 via the distribution of zero answers between both the OTC and prescription scenarios

We investigated the distribution of non zero answers between the OTC and the prescription scenario in order to test S3

We examined the factors associated with WTP : - information level in the OTC and prescription scenario (I) - scenario (S1)

We examined consistency with S2 via the distribution of zero answers between both the OTC and prescription scenarios

We investigated the distribution of non zero answers between the OTC and the prescription scenario in order to test S3


2. Econometric model

itiiiOTCipOTCit vuXISISSY 21* )*()*(log

i

Information level (I = 0,1 ie extended vs basic)

The individual

Explanatory factors (socio-demographic and health status variables….)

t

The respondent’s true valuation for scenario t

itX

*isY

The scenario (s = prescription vs OTC)

iI

A finding that would be consistent with the “information” assumption

Based on S1, is expected to be positive and significant

21

EMPIRICAL ANALYSIS


3. Selection of covariates

itiOTCnnOTCpnnpiOTCipOTCit vuSXSXSXSXISISSY ......)*()*(log 111121*

jj

22

11

The following equality tests were then performed

The selection of covariates included testing whether covariates had a different impact on WTP for the prescription and OTC drugs

EMPIRICAL ANALYSIS


4. Econometric estimation

We fitted a random-effects interval censored regression model

isiisiiis vuXISISSY 2110* )*()*(log

Answers lie in intervals and are not point estimates The respondent’s true valuation known

to lie within the interval defined by lower and upper thresholds

Answers might be correlated for a given individual

Assumptions

Zero answers can be considered as very small WTP (]0,1])

A lognormal conditional distribution for valuations is proposed **

log lie between log ta and log tb except for the first and last intervals

*Cameron & James, 1986 ; * *Cameron & Huppert, 1989

*isY

EMPIRICAL ANALYSIS


1. The study population

Information level

Basic Extended p

Females (%)

Age (mean, std)

Mandatory school (%)

High school (%)

Skilled training (%)

University (%)

Working (%)

Physician Health care professional (%)

Non physician Health care professional (%)

55.8%

35.4 ±12.1

6.4%

10.8%

49.7%

33.0%

90.3%

14.6%

52.0%

55.9%

35.5

6.5%

11.5%

50.0%

32.0%

90.1%

13.1%

53.5%

55.8%

35.4

6.3%

10.1%

49.5%

34.1%

90.4%

16.0%

50.6%

0.7

0.7

0.43

0.6

0.1

Supplementary insurance (%)

Perfect subjective health status (%)

Vaccinated against flue (%)

49.4%

74.0%

29.9%

48.4%

74.4%

29.9%

51.4%

73.8%

29.6%0.80

0.90

Administered in winter time (%)

Basic information level (%)

56.2%

49.5%

55.9% 56.4% 0.80

1594 subjects were enrolled in the study

RESULTS


2. WTP descriptive statistics

Prescription scenario

62%

38%

64%

36%

0%

100%

WTP > 0 WT0 = 0 WTP > 0 WT0 = 0

Basic Extended

OTC scenario

76%

24%

80%

20%

0%

100%

WTP > 0 WT0 = 0 WTP > 0 WT0 = 0

Basic Extended

p (basic vs extended) = 0.24 (chi2) p (basic vs extended) = 0.09 (chi2)

Prescription scenario

62%

38%

64%

36%

0%

100%

WTP > 0 WT0 = 0 WTP > 0 WT0 = 0

Basic Extended

OTC scenario

76%

24%

80%

20%

0%

100%

WTP > 0 WT0 = 0 WTP > 0 WT0 = 0

Basic Extended

p (basic vs extended) = 0.24 (chi2) p (basic vs extended) = 0.09 (chi2)

People receiving extended information were more willing to pay for the drug

However this tendancy is significant in the OTC scenario only (at a 10% level)

Willingness to Pay for influenza symptom reduction by 1.5 days

RESULTS


3. Econometric resultsPanel interval regression estimations over the full range of responses

RESULTS

Coef pOTC scenario 0.26 0.02Limited information in the prescription scenario -0.12 0.36Limited information in the OTC scenario -0.22 0.04Ascending ranges in the prescription scenario -0.16 0.22Ascending ranges in the OTC scenario 0.03 0.79Questionnaire filled in during winter time 0.37 <0.01Male gender 0.05 0.73Age (<24, (25,64), >65) -0.43 <0.01High school* 0.88 <0.01Skilled training* 0.73 <0.01University* 0.96 <0.01respondent having a job 0.27 0.243Senior health care professional in the OTC scenario** -0.32 0.16Non Senior health care professional in the OTC scenario** -0.70 <0.01Senior health care professional ** in the prescription scenario** -0.67 <0.01Non senior health care professional in the prescription scenario** -0.70 <0.01Basis + supplementary insurance -0.02 0.84Subjective health status: perfect -0.15 0.30Suffering from chronic disease 0.23 0.35Affected by influenza during the past two years 0.24 0.08Vaccinated against influenza 0.58 <0.01constant 1.79 <0.01sigma_u 2.02rho 0.72 **** mandatory schooling = reference , ** lay people = reference


4. Information impact

An increased level of information:

-pushes the WTP to upper levels in the OTC scenario

- has no impact on the WTP for prescription medicine

When asking for medical advice, the patient relies on the doctor’s knowledge

When opting for OTC, the patient requires relevant information to make informed choices

This is in line with the “information assumption”

RESULTS


5. Other results

when the participant answers the

survey during the winter

with incomes (assuming education

level is a proxy for income)

if respondents are risk averse (as

expressed by being vaccinated)

the insurance coverage does not

influence the WTP

the WTP increases when the

drug is delivered OTC (S1)

the WTP increases

RESULTS

Delivery patterns


6. Discussion (1)

We must discuss the possibility that some people might have thought that the OTC drug had to be sold at a higher price for some reason

RESULTS

misunderstanding ?

It is unlikely that the

seriousness of the disease

has been underestimated

some costs can be avoided ?

However, physicians value the

OTC drug (not the prescription one)

as much as the general population

does

(phsyisicans, however, do not face

the same issues as time or money

to get a prescription)


9. Discussion (2): a sequence effect?

RESULTS

Our methodology does not allow us to assess whether a sequence effect is present or not

However we claim that our findings are not affected by a sequence effect if there is one

If such an effect were present, our current results suggesting that the OTC version is

preferred would even be reinforced

The prescription form of the drug could have benefitted from a sequence effect (WTP is expected to be larger for the first good of a series of good, Payne et al 2000)


8. Discussion (3): protest zeros?

RESULTS

We also checked whether some « 0 » answers could be attributable to protest zeros*

A probit model was estimated on the subgroup of those who answered “0” to both scenarios

A bivariate probit model was run on the propensities to pay for a prescription and OTC drug

Some people may not feel concerned or express aversion to contributing to a publicly funded health care system


8. Discussion (4): protest zeros?

RESULTS

Coef p

Limited information .073 0.344

Ascending ranges -0.05 0.511

Questionnaire filled in during winter time -0.18 0.035

Male gender -0.01 0.885

Age (<24, (25,64), >65) 0.30 0.006

High school -0.45 0.018

Skilled training -0.43 0.005

University -0.38 0.023

Health care professional 0.28 0.004

Basis + supplementary insurance 0.02 0.801

Subjective health status: perfect 0.06 0.490

Suffering from chronic disease -0.08 0.625

Vaccinated against influenza -0.22 0.019

Personal history of influenza over the past 2 yrs -0.21 0.025

constant -1.08 0.000

Probit model explaining zero answers to both scenarios

People declaring zero values to both scenarios cannot be regarded as protesters


Our results:Welfare gains are associated with switching to OTC

The benefits of switching to OTC status are likely to depend on the information level

For the kind of drug considered here (safe and easy to monitor), the requirement for patient decision making is the provision of comprehensive information

1. Policy issue

CONCLUSION


2. Validity of the CV approach

CONCLUSION

One important contribution of the study was to use the CV method to assess the benefits from OTC while previous studies were based on market behaviors of actual consumers

We provide a useful test of the validity of the CV approach given that all the results come out in line with predictions from the agency and demand theories

karine lamiraud, konrade von bremen, cam donaldson** *university of lausanne, institute of health...

Documents

otc slide

level of information

otc medicine

otc systems

otc scenario

p otc p p ryan

otc status previous

cv approach

karine lamiraud*, konrade von bremen*, cam donaldson** *university of lausanne, institute of health...

karine lamiraud, konrade von bremen, cam donaldson** *university of lausanne, institute of health...