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Background: Healthcare systems worldwide face escalating pharmaceutical expenditures despite interventions targeting pricing and generic substitution. Existing studies often overlook unwarranted volume increases in multisource markets due to differential physician perceptions of brand name and generics. Objective: This study aims to explain the outpacing of generic medicine use over brand name use in multisource markets and assess the regulatory role, specifically examining the impact of reference pricing on volume and intensity increases. Methods: Analyzing German multisource prescription medicine markets from 2011 to 2014, we evaluate regulatory mechanisms and explore whether brand name and generic medicines constitute separate market segments. Using an Oaxaca-Blinder decomposition approach, we divide the differential in brand name versus generic medicine use rates into market structure and unobserved segment effects. Results: Generic use rates surpass same-market brand name substitution by 3.87 prescriptions per physician and medicine, on average. Reference pricing mitigated volume increase, treatment intensity and expenditure. Disparities in quantity and expenditure dynamics between brand name and generic segments are partially explained by market structure and segment effects. Conclusion: Generic medicine use effectively reduces expenditures but contributes to increased net prescription rates. Reference pricing may control medicine use, but divergent physician perceptions of brand name and generics, revealed by identified segment effects, call for nuanced policy interventions. [ABSTRACT FROM AUTHOR]

A patient's perception of the service provided by a health care provider is essential for the successful delivery of health care. This study examines the value created by community pharmacies—defined as perceived customer value—in the prescription drug market through varying elements of service quality. We develop a path model that describes the relationship between service elements and perceived customer value. We then analyze the effect of perceived customer value on customer satisfaction and loyalty. We use data obtained from 289 standardized interviews on respondents' prescription fill in the last six months in Germany. The service elements personal interaction (path coefficient: 0.31), physical aspect (0.12), store policy (0.24), and availability (0.1) have a positive significant effect on perceived customer value. Consultation and reliability have no significant influence. We further find a strong positive interdependency between perceived customer value, customer satisfaction (0.75), and customer loyalty (0.71). Thus, pharmacies may enhance customer satisfaction and loyalty if they consider the customer perspective and focus on the relevant service elements. To enhance benefit, personal interaction appears to be most important to address appropriately. [ABSTRACT FROM AUTHOR]