`
`Physicians’ Perceptions
`of Prescription Drug Prices:
`Their Accuracy and Effect
`on the Prescribing Decision
`
`E. M. Kolassa
`
`ABSTRACT. A survey of 100 primary care physicians found that,
`in general. these practitioners were unable to estimate accurately the
`costs of the drugs they commonly prescribe. A pattern of overesu-
`mating the costs of lower priced agents and underestirnating the
`costs of higher priced agents suggests that physicians generalize
`prices for most drugs into a narrow range between $1.00 and $2.00 ‘
`per day. Even though these physicians failed to estimate adequately
`the costs of the medications they prescribe, most claimed to consider.
`the cost of medications when making the prescribing decision. These
`findings imply that actual costs have little or no actual effeCt on the
`preseribing decisions of most physicians. Should this be true, at-
`tempts to control health care costs that do not focus on physician
`education in the area of treatment cosm may prove ineffective.
`
`INTRODUCTION
`
`Health care costs are currently the focus of considerable attention
`by all facets of society. Physicians, as the primary decision makers
`and resource allocators within the health care system, must bear a
`large share of the responsibility for controlling health care costs
`while providing the best possible care for their patients. Balancing
`
`E. M. Kolassa'. MBA, is Senior Research Assocmte, Research institute of
`Pharmaceutical Sciences, University of Mississippi. University, MS 38677.
`Journal of Research in Pharmaceuncal Economics, Vol. 6(1) 1995
`© 1995 by The Haworth Press, Inc. All rights reserved.
`
`23
`
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`IMMUNQQEQ 2282, pg. 1
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`JOURNAL OF RESEARCH IN PHARMACEOTICAL ECONOMICS
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`these two reSponsibilities can only be accomplished when prescrib-
`ers are made aware of the cosrs associated with the treatments they
`select for their patients.
`While diagnosis and selection of the most appropriate therapy are
`the main focus of physician training, little, if any, attention in this
`training is paid to the cost of health care and the role of cost in
`affecting treatment choices. Efforts to contain health care costs,
`however, cannot be successful until the decision makers within the
`system—physicians—ware cognizant of costs and consider them in
`their decisions. Several studies performed in the past found physi-
`cians, in general, to be unaware of and unaffected by the price of the
`medications they prescribe. Zelnio and Gagnon,
`in a review of
`studies spanning over 25 years. found physicians to be consistently
`unaware of the prices of the medications they prescribed (l). The
`current focus of attention on rising health care costs should,
`it
`would seem, be expected to increase prescribers' concern for and
`knowledge of the costs incurred due to the treatments they pre-
`scribe. To assess the accuracy of physicians’ knowledge of the cost
`of prescribed drug products, a survey of primary care providers was
`undertaken. Primary care physicians were chosen because of the
`higher likelihood that costs would play a role in their decisions and
`that they would be aware of the costs of selected therapies (2).
`The objectives of this study were threefold: to assess primary
`care physicians’ current levels of price awareness in comparison
`with previous findings, to measure these physicians’ attitudes about
`the cost of pharmaceuticals, and to identify the common sources of
`medication price information used by physicians.
`
`METHODOLOGY
`
`Between February I and 12, 1993, primary care physicians were
`contacted by telephonerand asked to participate in this study. Their
`names and telephone numbers were drawn from a nationwide list of
`physicians who had responded previously to telephone surveys con-
`ducred by the contracted interviewing agency (3). Five hundred
`physicians were contacted in total, with 100 agreeing to respOnd
`without receiving honoraria. The remaining 400 would agree to
`respond only in exchange for monetary compensation. Since none
`
`—
`
`.
`
`-
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`-
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`..
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`E. M. Kolassa
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`25
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`was offered or available for this study, those physicians requiring
`honoraria did not participate.
`The physicians who did participate were asked to estimate their
`monthly use and the retail prices of 16 cdmmonly prescribed phar~
`maceuticals and to state their level of confidence in their estimate.
`They were then queried as to sources and accuracy of price in—
`formation and asked to respond to a series of statements dealing
`with health care costs and their own prescribing decisions. Their
`price estimates were compared with average retail prices paid by
`patients and third—party payers. These averages were acquired from
`IMS Americas’ Basic Data Report, which is a virtual census of
`retail pharmaceutical activity.
`~
`FrequenCy distributions and cross tabulations of the data were
`generated and analyzed. When appropriate, statistical tests, includ-
`ing chi-square analysis and analysis of variance, were performed to
`determine differences among respondent types.
`‘
`
`STUDY LIMITATIONS
`
`Since the sample was drawn frOm physicians who had previously
`responded to telephone surveys, the sample cannot be considered
`random and, therefore, may nor be representative of the entire popu—
`lation of primary care physicians. Additionally, only 20% of this
`sample agreed to participate, providing, in total, 2 potential sources
`of nonresponse bias. Still, the consistency of these findings with
`those of previous studies, which will be discussed, would appear to
`limit nonresponse bias as a source of error.
`
`RESULTS AND DISCUSSION
`
`A total of 100 primary care physicians participated in this study.
`The distribution of physicians by practice type, subspecialty (e.g.,
`lM. GP. FF). age, gender, years in pracrice, and patient
`load is
`shown in Table l. A qualitative comparison of these data with
`nationalvlevel
`information on family practitioners suggests this
`sample was approximately representative of primary care physi-
`
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`JOURNAL OF RESEARCH IN PHARMACEUTICAL ECONOMICS
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`TABLE 1. Physician Characteristics.
`
`1':
`
`FP
`GP
`1M
`Other
`Total
`
`26
`38
`31
`5
`1 00
`
`Practice Type:
`
`Sale
`Group
`la! Slafl
`HM Staff
`
`2%
`
`Gender:
`
`Female
`Male
`
`n
`18
`- 37
`
`Age:
`Monthly Patient Load:
`
`W
`48 3
`ass
`
`Percentage of Patlents Belonging to HMOs:
`None
`16%
`25% or less
`44%
`267910 50%
`38%
`51% to 100%
`
`clans as a whole (4). The respondents were also asked to estimate
`the proportion of their patient loads that belong to Hlvios (either
`[PA or Staff model organizations).
`Table 2 presents the drugs included in the study, the average
`physician estimates of the number of prescriptions written monthly
`for each agent, physicians’ average estimate of daily drug cost
`(retail cost to patient), the actual national average daily costs for
`these agents, and the average level of physicians’ confidence of the
`accuracy of their estimates of cost (5). Respondents were asked to
`estimate the costs of only the drugs they prescribed. No significant
`differences in accuracy, confidence, or attitudinal questions were
`found among physicians according to age, gender, specialty, prac-
`tice setting, patient load, or intensity of HMO patient load. Only in
`the area of drug price information sources were differences found
`among respondent types, with staff physicians more likely to re-
`ceive price-related information from pharmacists and less likely to
`receive patient feedback than private practice physicians.
`All but one of the agents selected for this study are leaders in
`their respective classes and are likely to be frequently prescribed by
`primary care physicians. The one agent not fitting this description is
`Lotensin® (benazepril, ClBA—GEIGY), which was selected due to
`
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`Product and Daily Dose
`
`
`
`
`
`Average
`Average Estimate
`Averag 9
`Confidence
`Monthly
`Prescribing
`of Dally Cost
`
`
`
`Prescriptions
`Physicians'
`(Std. Deviation)
`
`
`
`
`Written"
`
`78 m
`Generic HCTZ 25mg GD
`
`.
`LANOXIN 025mg on -
`76 m
`LASix 40mg BID mm. so 86 0-68) _m
`PREMAnlmgpzsmg OD “-m
`Generic lb mien 600 no "mm—”m ‘
`“W“ .
`
`—-_-E-
`
`
`
`
`m
`m—mn
`
`
`
`
`mum-.115.“
`
`
`—_———-!-
`"mum-m
`M“
`“W“
`W.“
`AUGMENTMSO e TID ”mm-I.
`
`
`
`
`
`
`
`
`
`TABLE 2. Physician Estimate of Drug Prices, Actual Prices, and Confidence in Estimates.
`
`Number of
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`‘Physicians were asked to estimate only the prices of those agents they had prescribed in the past month.
`”Average number of prescriptions written monthly for the agent by those physicians who currently prescribed the product.
`“Confidence measured on a scale whare1 = "Not sure at all" and 7 = "Sure"
`
`S
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`dovm of estimates that were within $0.50 of the actual average daily
`
`its unique positioning in the marketplace as a low-cost alternative to
`its competition. It was felt that the promotional attention given this
`agent might provide prescribers with a product for which accurate
`pricing information was available. As can be seen from Table 2,
`physician estimates of the price of this agent, as with all others,
`were not accurate.
`The final column of Table 2 presents the level of confidence the
`physicians had in their price estimates. Using a scale of l to 7, with 1
`indicating they were not sure of the accuracy of their estimate and 7
`indicating they were sure, the answers tended to cluster just above
`the point of neutrality. No differences were found to exist among
`physician specialties or practice types, and there was no statistical
`relationship between the level of confidence in a physician’s esti-
`mate and the accuracy of the estimate.
`'
`To allow for a reasonable margin of cum in the estimates, a +/ -
`20% range about the average actual price was used to evaluate the
`physician estimates. This same level of error has been used several
`times in previous studies and would accommodate variations in
`retail pricing structures for the branded products, although prices
`for generic products vary much more widely (6, 7). Table 3 presents
`the distribution of these estimates.
`‘
`Previous studies found roughly one-third of physicians stated
`they had “no idea” of the prices of the drugs they prescribed (5, 6).
`A study performed by the American Medical Association in 1977
`found 62% of the association ’5 membership was similarly ignorant
`of drug costs (8). Physicians responding to this current Study were
`not provided the opportunity to simply avoid estimating drug costs.
`Those failing to estimate the costs agreed to the statement that they
`did not care about the costs of the agents they prescribed. In total,
`16% (16) of the physicians participating Stated they did not care
`about these costs. The remaining 84 offered estimates for those
`agents they prescribed.
`As would be expected, the relative errOr in the physicians’ price
`estimates was significantly higher for medications priced at the
`lower end of the range studies, since a small absolute difference in
`an estimate for a low—priced agent would render a larger relative
`difference than fOr a more costly agent. Table 4 provides a break-
`
`«
`
`I:
`
`~»
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`IMMUNOGEn 2282, pg. 6
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`TABLE 3. Distribution of Physician Estimates of Drug Costs.
`
`
`
`
`
`
`
`
`Product and Daily Dose
`Percentage
`% of Estimates
`Percentage
`
`
`Percentage Stating
`Overestimating
`Undarestimating
`Within 20% of
`
`
`
`
`Cost
`Average Actual
`"Don't Care'"
`Cost
`
`
`
`
`Cost
`
`
`
`
`
`
`
`
`
`
`
`
`”mm
`
`
`
`
`
`
`
`
`PROCAHDM 14- 60mg OD
`
`FELDENE20‘3 OD
`
`
`
`
`
`AUGMENTIN 250mg no
`
`72.0%
`
`am.
`10 7%
`
`
`‘Physicians were required to estimate the price of the medications they prescribed or state they "don‘t care" about the cost of
`pharmaceuticals.
`
`N‘
`
`0
`
`a“ .u. ._. “.2._._w..,.4.h-w.u»fiaM-mewmmmmwwwnwmmveg}
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`price. This table does not include those physicians stating they did
`_ not care about the cost of medications. As can be seen, the pattern
`of overestimating the cost of less costly agents and underestimating
`the cosr of those priced higher is also apparent here.
`As with previous studies, physicians, in general, tended to over-
`estimate the costs of medications; in this case, 48.2% of the esti-
`mates givenlwere more than 20% higher than the mean actual cost
`(5, 6). These overestimations were not consistent across all agents
`studied, however, since physicians consistently overestimated only
`the costs of those medications that are used for chronic disorders
`that are relatively asymptomatic, such as hypertension and hyper-
`cholesterolemia. The price estimates of medications for acute disor-
`ders, such as infections and pain, as well as those for more symp»
`tomatic diseases. such as arthritis, tended to be low. Since this study,
`as well as those previously cited, found patient feedback to be the
`physicians’ primary source of drug price information, it might be
`hypothesized that patients are more prone to complain of the cost of
`medications for which they feel little benefit from therapy, while
`medications offering relief from acute symptoms are less likely to
`generate these complaints. Tables 3 and 4 provide the percentage of
`responses that fell below, within, and above the range of prices for
`the Specific agents, while Table 5 provides the physicians’ reported
`acquisition of drug price information from various sources and the
`perceived accuracy of the information provided by each source.
`Table 6 contrasts the responses of private practice physicians with
`those who are Staff employees of hoSpitals or HMOs.
`Physicians claim to receive price information from pharmaceuti-
`cal company sales representatives and patients on a fairly regular
`basis and believe patients to be accurate in their assessments of
`prices. Differences between practice types did emerge in this area of
`questioning, as shown in Table 6, with physicians who are staff
`employees of hospitals and HMOs being significantly less likely to
`receive price information from sales representatives (p = .04) or
`patients (p < .01) than physicians in private practice. The $010
`practitioners differed from staff physicians in the extent of their
`belief in the accuracy of price information provided by pharmacists.
`with staff employees appearing to trust pharmacists’ price informa-
`tion more than the solo practitioners (p = .016). These differences
`
`
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`IMMUNOGEn 2282, pg. 8
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`Percentage
`Underestinufing
`Cost by More ihan
`‘-
`
`% of Estimates
`Wlihin +1— $0.50
`of Average
`A u. Cost
`
`Perceniago
`Overesfimafing
`Gas! by more
`
`Product and Daily Dose
`
`Baneric HGTZ 25mg 0D
`
`LANOXIN 0.25m 00
`
`lASIX40 2 BID
`
`PREMARIN 0.625.119 OD
`
`Generic ibuprofen 600 2 Ti
`
`LOTENSIN tOrng GD
`
`VASOTEC 10mg 01)
`
`MiGFlONASE 5mg BID
`
`APAP wl God #3 04h
`
`ZANTAC 150mg on
`
`MEVACOR 20mg OD
`
`PROCARDIA XL 60mg QD
`
`FELDENE 20mg OD
`
`VOLTAREN 50mg TID
`
`CECLOR Sus 250m mi TID
`
`AUGMENTiN 250mg TID
`
`IE
`
`TABLE 4. Accuracy of Physician Estimates of Drug Costs for Physicians Offering Estimates.
`
`
`
`
`-. 4-5“; y.“{.—i.~g.‘a.m.=WiuM-WWUWJKWL‘”MW§I;WPWR
`
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`TABLE 5. Souices and Perceived Accuracy of Drug Price information.
`
`"Hw often do you get drug price
`information from"
`
`'How acairate. a: trustworthy is this
`information?"
`
`Calieagues
`
`Drug Company '
`Sales Person
`Patient
`Pharmacist
`Published Source
`
`TABLE 6. Comparison of Drug Price Information Source for Private Prac-
`tice and Staff Physicians. Average Ratings.
`'
`
`
`
`“How often do you get drug
`“How accurate, ortrustwonhy
`price information ircmz“
`is this information?‘
`(t = "Always" 4 = "Net/er")
`(1 = "Very" 3 I “Not")
`
`
`
`
`
`
`
`
`
`
`
` Drug Company
`
`Sales Person
`
`Patient
`
`Pharmacist
`
`Published Source
`
`Colleagues
`
`
`may be due to the lack of individual patient follow-up and repeat
`visits within a staff empmyee’s pracricc and the staff employee’s
`greater exposure to pharmacists on a regular basis.
`Even with these differences in the manner in which the physi—
`cians may receive price information and their assessments of the
`accuracy of this information, there were no differences in the accu-
`racy of the price estimates offered by physicians in the various
`practice settings.
`As mentioned previously, the error in price estimates appeared to
`follow a pattern, with physicians overestimating the Costs of some
`
`IMMUNOGEn 2282, pg. 10
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`E. M. Kolasi-a
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`33
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`medication types and underestimating others. Additionally, there
`was a distinct pattern of overestimation of the costs of less expen-
`sive agents, such as Lanoxin®, Lasix®, and generic products,
`while there was underestimation of the costs of antibiotics and
`NSAIDS (Feldene® and Voltaren®). While the overestimation of
`drug costs has been deemed acceptable by previous researchers,
`since this overesrimation may limit the use of these products to only
`those cases where they are truly necessary, the underestimation of
`the costs of some agents may then lead to their overuse or to failure
`to consider similar products with lower costs (6). This pattern of
`overestimation of the costs of some agents and the underestimation
`of others lead to an examination of the distribution of the estimates.
`While only 4 of the 15 agents included in the study were priced
`between $1.00 and $2.00 per day, 59.3% of all price estimates fell
`within that range. Might one, then, generalize that the responding
`physicians assume that the “typical” drug costs between $1.00 and
`$2.00 per day? This assumption would allow the physician's stated
`concerns abOut health care costs to be reconciled with his or her
`ignorance of the actual costs.
`
`BELIEFS AND OPINIONS
`
`Included in the survey instrument was a gr0up of statements
`dealing with health care cost issues. Physicians were asked to assess
`their degree of agreement with these statements using a l to 7 scale,
`with “l” indicating very Strong disagreement and “7” indicating
`very strong agreement. The findings from this section are presented
`in Table 7.
`Physicians registered strong agreement with most questions con-
`cerning health care costs and the role of cost in prescribing. There
`was, in fact, general agreement with every statement dealing with
`the use of cost infnrmation and the concern for the cost impact of
`decisions. A: the same time, physicians indicated a weak disagree-
`ment with statements concerning their own knowledge of drug
`prices, partly acknowledging their own lack of knowledge. The only
`difference between practice types in this set of statements was, again,
`between solo practice and staff physicians, who differed in the
`amount of patient complaints they hear concerning price (p < .01).
`
`IMMUNOGEn 2282, pg. 11
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`TABLE 7. Physician Beliefs and Opinions.
`
`13mm
`(Mean Response)
`
`
`or concern lor m . alienis
`The cost of health care is a
`The prices of new medications are in line with lheir value m.
`lam ve
`concerned about the cost citreatmems I describe ‘1.—
`The cost of health care is too hi . h
`
`
`
`
`i wish I knew more aboutihe costs of the dru s l rescribe
`
`
`
`
`
`
`
`
`
`
`m-
`
`.5.
`Pharmacists often contact me to recommend lower riced dm 5 s m
`[05-th warn ailenrs than a rim I urescribe will be ex enslve m
`est uni ol should 0T be a concern for .
`sicians m. 3.1
`Dru ooman sales rec are . - .. sources of -rice Information
`
`The cost of oharmaceutical research exmses hih d 9 rices
`
`The cost oi a drug has a greal influence on my prescribing
`
`
`
`D 1 ooman croflis are :- Hro atelorlherisks the lake
`My patients often complain abou: the cost of medicines
`
`
`Idiange pr lions when patients com - n -- uloosts “
`
`
`’eo
`" my knowledge of dug oosls
` I am sat:
`
`2 costs
`he zuvemmem should take sic to centre .
`
`_m
`Pharmacists are a and source of «ice informalion
`
`
`mm-
`
`
`
`
`
`
`
`
`
`
`Measuredonascale where l =StronglyDisagreeand 7’= StronglyAgree
`
`* pc .01 using analysis of variance, Scheiie lest
`
`_ ~._.... _-_.
`n. --\..._*-:.u-' Jag.
`.
`-., >45—
`
`
`IMMUNOGEn 2282, pg. 12
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`35
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`Such a finding would be expeCted, since staff physicians would be
`less likely to treat the same patient on an ongoing basis and, hence,
`be less likely to receive feedback.
`The re5ponses to several of these statements appear to be contra~
`dictory. and many responses are remtedweffectively—by the inaccu-
`racy of the price estimates provided by the physicians.
`The high level of agreement with the statements “Patients should
`get the be3t treatment possible, regardless of cost” and “I prescribe
`lower cost drugs for patients with lower incomes” may either be
`contradicmry or reveal an area of medical practice where beliefs
`and behavior are contradictory. The agreement with the Statement
`of prescribing lower c03t drugs for patients with lower incomes.
`however, cannot reflect actual behavior, given the lack of drug price
`knowledge demonstrated by the respondents.
`Still, the physicians in this study agreed strongly that costs do. at
`least in part, guide their prescribing. These costs, it must be as-
`sumed, are the physician’s perceptions of costs as opposed to the
`actual purchase prices.
`‘
`Several previous studies have also found that physicians claim to
`consider the cost of medications to be a key consideration in their
`selection (9-11). Whether this stated consideration is actually based
`on the prescriber’s perception of drug costs, as discussed above. or
`is simply a case of normative bias compelling the respondent to.
`answer these questions in the affirmative is unknown. But the lack
`of accuracy of the estimates of cost, taken in light of these state
`ments of cost concems, implies that prescription decisions are being
`made without full consideration of all implications of those deci-
`sions and that the stated concerns over costs are, indeed, manifesta-
`tions of nonnative bias.
`This position is supported by the results of a study of physicians
`conducted in 1975 in the State of Washington, where less than 2%
`of responding physicians identified drug costs as an area where they
`believed more information was needed (12). While that study was
`conducted some 18 years ago, there appears to be no evidence that
`the findings are no longer valid. Another, more recent study solic-
`ited physicians’ views on the importance of cost considerations,
`then went on to assess the value of this information to prescribers
`(13). While there was general agreement that cosr is, indeed, an
`
`
`
`'.l.
`l
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`IMMUNOGEn 2282, pg. 13
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`36
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`JOURNAL OF'RESEARCH IN PHARMACEUTICAL ECONOMICS
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`important consideration in prescribing decisions, the researchers
`concluded that physicians would not be willing to pay to acquire
`‘ this informatioo. One would assume that if costs were truly a deter-
`minant of selection, information on these costs would be deemed
`necessary by prescribers-
`Unless and until physicians become aware of the costs of treat-
`ments they prescribe and use the information on these costs as they
`already ciaiin to, control of health care spending is not likely to
`occur.
`
`CONCLUSION
`
`The physicians participating in this study claimed to consider the
`cost of medications when prescribing but failed to estimate those
`costs accurately. These cost estimates, which may or may not affect
`prescribing behavior, indicated patterns of grouping most drugs into
`a narrow price range. It cannot be assumed that these findings can
`be generalized across the universe of prescribing physicians due to
`the small sample, but should these findings reflect the larger p0pu-
`lation, the inaccuracy of the cost estimates must lead to questions of
`the adequacy of any cost-Aboutainment measures that do not include
`the attainment of accurate price knowledge by physicians and phy—
`sician commitment to consider this factor in making decisions.
`
`REFERENCES
`
`1. Zeinio KN. Gagnnn JP. The effects of price information on physician pre~
`scribing pattems—iiterature review. Drug Intell Clin Pharm 1979;13:156-69.
`2. Greenfield S, et al. Variations in resource utilization among medical spe-
`cialties and systems of care. JAB/1A 1992;267:1624-30.
`3. Market Insight, Inc., of State College PA.
`4. Facts about family practice. American Academy of Family Physicians,
`1991.
`5. Data provided by lMS, international. 3rd quarter 1992 basic data report.
`Prices of products that experienced price changes between the gathering of these
`data and the fielding of the survey were adjusted to reflect the new. more current,
`Prices.
`6. Pink 3, Kerrigan D. Physicians’ knowledge of drug prices. Contemp Pharm
`1978; 18( 1): 13-21.
`
`IMMUNOGEn 2282, pg. 14
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`reg-r“::2:-
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`._:V-.u‘i__.¢‘“.::.ym
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`E. M. Kolassa
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`7. Kaine R, O’Corinell E. Physicians‘ appreciation of drug charges tome pa—
`tient. Clin Pediatr 1972;11:665—6.
`8. How MD: and pharmacists View mutual problems. AMA Navrs
`1978: 20(5).
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`9. Ctfinburapa V, Larson LN. Predicting prescribing intention and assessing
`drug amibute importance. using conjoint analysis. J Pharm Market Manage
`1988;3(2):3-18.
`10. Harris P, Savage H. Physicians’ prescribing practices and decision making
`methods. 11] Pharm ‘1989;(Apr):9-12.
`11. Epstoin AM. Read 11.. W'nfickoff R. Physician beliefs, attitudes, and pre-
`scribing behavior for anti-Mammary drugs. Am J Med 1984;77:313-8.
`12. Smith G, Sorby D, Sharp L. Physician attitudes toward drug information
`resources. Am J Hosp Pharm 1975;32:1945.
`13. Kotzan 3A, Perri M. Wolfgang A?- An exploratory study of physician pct-
`ceptions of drug price information and a prescription price newsletter. J Pharm
`Market Manage 1990;4(3):3-13.
`
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