Physicians’ Perceptions
`of Prescription Drug Prices:
`Their Accuracy and Effect
`on the Prescribing Decisions
`
`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 overesti-
`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 me ications 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
`prescribing 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 costs may prove ineffective.
`
`INTR OD UCTION
`
`i
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`I:
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`I3
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`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
`
`
`3
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`E. M. Kolassa‘, M.B.A., is Senior Research Associate, Research Institute of
`Pharmaceutical Sciences, University of Mississippi. University, MS 38677.
`i
`Journal of Research in Pharmaceutical Economics, Vol. 6(1) 1995
`(<3 1995 by The Haworth Press, Inc. All rights reserved.
`23
`SENJU EXHIBIT 2147,?
`.,
`LUPIN V SENJUQ
`IPR2015—01105
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`PAEE OF 5
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`JOURNAL OF RESEARCH IN PHARMACEUTICAL ECONOMICS
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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 cost 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 givenwere 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 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 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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`PAGE 2 OF 5
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`TABLE 4. Accuracy of Physician Estimates of Drug Costs for Physicians Offering Estimates.
`
`
`
`Percentage
`% of Estimates
`Percentage
`Underesfimaung
`Whhln +/- $0.50
`Overesfimaling
`
`
`More Ihan
`Cost by
`
`
`
`
`
`Pmduct and Dally Dose
`
`
`
`
`
`l
`6onerIcHcTz zsms 00 j
`LANOXIN 025mg on T 63-194
`mwuoqmo
`PnEuAmNo.625m9 on If
`Generic!) --ofen we no “
`L0TENSlN10mu on T If
`vAsoTEc1omu on j
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`
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`
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`
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`
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`.
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`.T -
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`
`
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`on 221
`Feu>e~e2
`vomasusomg no 2: 242-».
`CECLOR Sus 250m ml TID
`
`
`AUGMENTN 250mg TID
`
`
`
`
`
`
`If
`
`-- --A-.r y...¢.._.._g..,-.4 ..u.-.-u.~.As.u.a.nn:~.a
`
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`PAGE 3 OF 5
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`32
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`JOURNAL or RESEARCH IN PHARMACEUTICAL zcowomcs
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`TABLE 5. Souicos and Perceived Accuracy of Drug Price Information.
`
`"How often do you got drug price
`information from:"
`
`‘How accurate, or trustworthy ls this
`infotman'on?"
`
`
`
`Drug Company '
`Sales Person
`Patient
`Pharmacist
`Published Source
`
`Colleagues
`
`TABLE 6. Comparison of Drug Price Information Source tor Private Prac-
`tics and Staff Physicians. Average Ratings.
`
`
`“How often do you get dmg
`price information tremz“
`(1 = “Always" 4 = "Never")
`
`
`
`
`“How accurate, or trustworthy
`is this lntormation?"
`
`(1 = uvaryu 3 R uNarI)
`
` Drug Company
`
`Sales Person
`Patient
`Pharmacist
`Published Source
`colleagues
`
`
`
`
`
`
`3.1 2
`3.09
`
`may be due to the lack of individual patient follow-up and repeat
`visits within a staff employee's practice and the staff ernployee’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
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`PAGE 4 OF 5
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`?_..j::...-........:.___.._._.._._-....__...,.......,..... .
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`E.‘ M. Kolassa
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`33
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`L‘-SID:
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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 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 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 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 “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 ir.f:,.wrn-ration and the concern for the cost impact of
`decisions. At 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).
`
`PAGE 5 OF 5