The Detailing Response of Branded Drug Firms to Generic Entry

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

The literature on pharmaceutical marketing devotes little attention to the promotion of branded drugs after generic competitors enter the market. This paper addresses this gap in the literature and explores how the sales of branded drugs respond to specific promotional strategies following generic entry. We focus on physician detailing, and specifically, firms' post-generic-entry decisions regarding overall detailing spending and physician-level allocation (i.e., which
physicians to visit). We utilize a novel, custom-built dataset containing information on aggregate-level sales, prescriptions, and promotional budget for 72 brands and their competitors; our dataset further includes detailed physician-level data on detailing visits and prescription behavior for 25 of these brands. We first describe the detailing strategies that brands use in practice, and then analyze the outcomes associated with changes in detailing spending and
allocation. Our analyses reveal that, on average, brands' detailing spending decreases after generic entry, yet the ROI on such spending increases compared to before generic entry. Refocusing of detailing efforts after generic entry such that physicians with higher brand preference are targeted is more likely to lead to an increase in detailing ROI than other allocation strategies post entry. However, in practice, many brands do not undertake such reallocation and do not enhance their ROIs. Our findings are of clear practical relevance to manufacturers of
branded drugs, as well as to policy makers who wish to curb detailing efforts for branded drugs when generic alternatives are available, so as to lower healthcare costs.
Original languageEnglish
JournalInternational Journal of Research in Marketing
Publication statusAccepted/In press - 2024

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