Physicians' Perceptions
`of Prescription Drug Prices:
`Their Accuracy and Effect
`on the Prescribing Decision ·
`
`E. M. Kolassa
`
`ABSTRACT. A survey of 100 primary care physi~ians found that,
`in general, these practitioners were unable to estimate accurately the
`costs· of the drugs they commonly prescribe. A pattern of overesti(cid:173)
`mating the costs of lower priced agents and underestimating 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 litde or no actua1 effect on the
`prescribing decisions of most physicians. Should this be true, at(cid:173)
`tempts to control health care costs that do ~ot focus on physician
`education in the area of treatment costs may prove ineffective.
`
`INTRODUCTION
`
`Health care costs are ctirrently 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 pati~;.ts. Balancing
`
`t
`
`l i
`
`E. M. Kolassa~ M.B.A., is Senior Research Associate. Research Institute of
`Pharmaceutical Sc~nces. University of M ississippi. University, MS 38677.
`Journal of Research in Pharmaceutical Economics, Vol. 6(1) 1995
`© 1995 by The Haworth Press, Inc. All rights reserved
`23
`SENJU EXHIBIT 2147 ]
`. INN.OPHARMA v SENJU j
`IPR2015-00903
`
`l I
`
`PAGE 1 OF 5
`
`

`
`-·
`
`. .
`'
`
`30
`
`JOURNAL OF RESEARCH IN PHARMACEUJICALECONOMJCS
`
`'
`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 cost of those priced higher is also apparent here.
`As with previous studies, physicians, in general, tended to over(cid:173)
`estimate the costs of medications; in this case, 48.2% of the esti·
`mates given were more than 20% higher than the mean actual cost
`(S. 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 hypenension and hyper(cid:173)
`cholesterolemia. The price estimates of medications for acute disor(cid:173)
`ders, such as infections and pain, as well as th.;>se 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 agen.ts, while Table 5 provides the physicians' reponed
`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 hcspitals 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 solo
`practitioners differed from staff physicians in the extent of their
`belief in the a ccurac y of pric e inf ormation pro v ided b y phannacisls,
`with staff employees appearing to trust phannacists' price informa(cid:173)
`tion more than the solo practitioners (p = .0 16). These differences
`
`PAGE 20F 5
`
`...
`
`l 1
`
`

`
`.1@-;.
`
`· · rye;=-e~...-==-···--·"'....,.·r-r.,.. .:
`
`c
`
`_,....;.
`
`*
`
`··
`
`·•t.,.'>c··· .................. lf..l.*."..._ .. .,.,., •..•.. """~'_.~l'
`
`.. .....,. wrt
`
`.... ,....~~··'--•-.... ~ ..... -w.~·~,_-·
`
`· ..
`
`.·
`
`I
`I i
`
`··-··
`
`---------
`
`11.7o/o
`3.1%
`6.5%
`6.9%
`18.5%
`27.0%
`50.00/o
`12.5%
`25.8%
`44.6%
`59.0%
`8.8%
`35.1%
`51.5°.4
`36.9".4
`13.~..4
`
`5.9%
`
`0%
`24.2-.4
`31.0%
`49.2%
`63.5%
`46.2%
`46.4%
`67.7%
`55.4%
`41.0%
`11.8%
`64.9%
`48.5•.4
`83.1%
`86.4%
`
`tbart&o.50
`Cost by more
`Overestimating
`
`Percentage
`
`Wlflln +1-.$0.50
`% of ES11mates
`
`A.t'JIIAI Cost
`of Average
`
`82.4%
`96.9%
`69.3%
`62.1%
`32.3%
`9.5%
`3.8%
`41.1%
`6.5%
`
`Cost by More than
`Underestimating
`
`Peroentaga
`
`0%
`0%
`79.4%
`0%
`0%
`0%
`0%
`So .50
`
`68
`65
`62
`58
`65
`63
`78
`56
`62
`65
`39
`68
`67
`68
`65
`66
`n
`
`AUG.MENTIN 250mg TID
`CEClOR Sus_R 250mglml TID
`VOL TAREN 50mg TID
`' FEl.DENE 2()fng_ 00
`! PROCARDIA Xl60mg QD
`
`MEVACOR 20mg 00
`ZANTAC 150~ QD
`APAP w/ Cod 13 04h
`YICRONASE SnYtJ BID
`VASOTEC 10mg QD
`LOTENSlN 1 Omg CD
`Generic IJuprofan 600mg TfO
`PAEMARIN 0.625mg CD
`LASIX 40mg BID
`LANOXIN 0.25mg QD
`Ci&nwic HCTZ 2.5q QD
`
`Product and DaDy Dose
`
`TABLE 4. Accuracy of Physician EstimatBs of Drug Costs for Physicians Offering Estimates.
`
`~~-~
`
`t!
`
`.....
`....,
`
`U'l
`~
`0
`
`~
`~
`~
`
`1-C >
`
`

`
`-
`
`···-· -··--- - - . ..,,
`
`J2
`
`JOURNAL OF RESEARCH IN PHARMACEUTICAL ECONOMICS
`'
`TABLE 5. Soufces and Perceived Accuracy of Drug Price Information.
`
`n""' 100
`
`"HoW often do you get drug pries
`information from:"
`
`"How accurate, or trustwonhy lslhis
`infOI'mation7"
`
`SoUI'C8
`Drug Company
`Sales Person
`Patient
`Pharmacist
`Published Source
`CoUeaguee
`
`Always Often seldom Niver
`
`Very Somewhat Not No
`Oplnion
`
`10.1
`12.1
`47.5 30.3
`10.1
`8.1 ~.5 41.4
`4.0
`1e.2 51.5 28.3
`17.2 55.6 26.3
`1.0
`1.0
`20.2
`21.2
`fi/.6
`
`26.0
`59.6
`58.1
`32.6
`9.6
`
`63.5
`26.5
`ZJ.7
`43.2
`56.4
`
`8.3
`11.7
`2.2
`8.4
`20.2
`
`2.1
`2.1
`16.1
`15.8
`13.8
`
`TABLE 6. Comparison of Drug Pries Information Source for Private Prac·
`tice and Staff Physicians. AvQrage Ratings.
`
`n= 100
`
`"How often do you get drug
`price in1ofmation from:"
`{1 """Always" 4 ... "Never")
`
`''How aoourate, or trustworthy
`is this Information?"
`(1 = "Very" 3 • "Not")
`
`Source
`Drug Company
`Sales Person
`Patient
`Pharmadst
`Published Source
`CoUeagues
`
`Private
`Prac:tloe Staff
`
`pvaJue
`(chi-sqr.
`
`Private
`Practice Staff
`
`pvatue
`{c::tli·sqr.)
`
`2.31
`2.40
`3.12
`3.09
`2.97
`
`.04
`2.64
`3.00 < .01
`2.77
`.09
`3.00
`.40
`2.96
`.70
`
`1.86
`1.49
`'1.39
`1 .72
`2.11
`
`1.67
`1.61
`1.15
`1.68
`2.16
`
`.40
`.45
`.19
`.30
`.09
`
`may be due to the lack of individual patient follow-up and repeat
`visits within a staff employee's practice and the staff employee's
`greater exposure to pharmacists on a re~lar basis.
`Even with these differences in the manner in which the physi(cid:173)
`cians may receive price information and their assessments of the
`accuracy of this information, there were no differences in the accu(cid:173)
`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 tho costs of some
`
`---=-"P~GE 4 OF 5
`
`

`
`, . _____ .... ___________ , \
`
`·': . .
`
`E. M. KoU:Jssa
`
`33
`
`medication types and underestimating others . . Additionally~ there
`was a distinct pattern of overestimation of the costs of less expen(cid:173)
`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 overestimation 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 exarrunation 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.
`
`BEUEFS AND OPINIONS
`
`Included in the survey instrument was a group of statements
`dealing with health care cost issues. Physicians were asked to assess
`their degree of agreement with these statements using a 1 to 7 scale,
`with .. 1'' 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(cid:173)
`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 irJ~.:trmation and the concern for the cost impact of
`decisions. At the same time, physicians indicated a weak disagree(cid:173)
`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 ).
`
`PAGE 5 OF 5