Why brand drugs priced higher than generic equivalents

2015 ◽  
Vol 9 (1) ◽  
pp. 3-19 ◽  
Author(s):  
Kathleen Iacocca ◽  
James Sawhill ◽  
Yao Zhao
Keyword(s):  
Prescription Drugs ◽  
Wholesale Price ◽  
Cost Savings ◽  
Brand Names ◽  
Insurance Companies ◽  
Demand Model ◽  
Generic Competition ◽  
Content Type ◽  
Pharmaceutical Manufacturers ◽  
Structural Demand

Purpose – This paper aims to investigate why brand-name drugs are priced higher than their generic equivalents in the US market. The authors hypothesize that some consumers have a preference for brand names, which outweighs the cost savings realized by switching to generics. Consumers may prefer a brand drug because the brand may have a higher perceived quality due to advertising and other promotional activities. Additionally, individuals are habitual in their consumption of prescription drugs, which leads to continued use of the brand in the face of generic competition. Design/methodology/approach – The authors develop a structural demand model and proceed to estimate it using wholesale price and demand data from the years 2000 through 2004. Findings – The results of our analysis reveal that customers have a strong preference for brand drugs. In addition, consumers exhibit high switching costs for prescription drugs. Originality/value – Considering the price and quantity of prescriptions filled each day, determining why brand drugs do not lower their prices to compete with their generic equivalents is an important question. Unfortunately, the existing literature only acknowledges this counter-intuitive business practice, but does not mathematically explain it. The authors address this knowledge gap in literature and provide important insight for all players in this industry including consumers, pharmaceutical manufacturers and health insurance companies.

New SEC variable contract summary prospectus rules: an implementation project plan

2020 ◽  
Vol 21 (2/3) ◽  
pp. 151-166
Author(s):  
W. Thomas Conner ◽  
Nathaniel Segal ◽  
John M. Sanders
Keyword(s):  
Cost Savings ◽  
Insurance Companies ◽  
Project Implementation ◽  
Regulatory Requirements ◽  
Implementation Plan ◽  
Content Type ◽  
Disclosure Requirements ◽  
Policies And Procedures ◽  
Project Plan ◽  
Practical Implications

Purpose To analyze the SEC’s newly adopted Rule 498 A, the variable contract summary prospectus rule, and concurrently adopted prospectus disclosure requirements in order to propose to insurance companies issuing variable contracts a project implementation plan for companies seeking SEC approval for summary prospectuses compliant with the new rules. Design/methodology/approach Discusses the history, requirements, effects, and expected implementation timeline of the new rules, then offers a detailed project plan and timeline for compliance. Findings The Rule does not require insurers to use summary prospectuses, but there are several compelling reasons for doing so. The Rule allows insurers to use a new concise and brief selling document, and by so doing to begin generating very significant cost savings as soon as May 1, 2021. The article provides a detailed implementation plan for insurance companies that want to comply with the new prospectus disclosure requirements and implement policies and procedures to begin using summary prospectuses. Practical implications A coordinated project implementation plan like that outlined in the article might assist insurance companies to make the requisite statutory prospectus revisions and prepare and obtain SEC approval of summary prospectuses by May 1, 2021. Originality/value Analysis from experienced attorneys who frequently advise insurance companies issuing fixed and variable annuities, and assist clients in navigating the complex regulatory requirements governing insurance and securities products.

When foreign brands appear local, and local brands appear foreign

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bo Chen
Keyword(s):  
Developing Countries ◽  
Purchase Intention ◽  
Empirical Studies ◽  
Country Of Origin ◽  
Developed Countries ◽  
Brand Names ◽  
Content Type ◽  
Product Categories ◽  
Foreign Brand ◽  
Foreign Brands

PurposeBoth foreign and local companies frequently name their brands in foreign language on the market of developing countries, and some of them choose to disclose the brands' country of origin to consumers. The purpose of this research is to investigate the joint effects between the practices of disclosing the actual country of origin of the brands and the language of the brand names on consumers' purchase intention for foreign brands and local brands in developing countries.Design/methodology/approachThe proposed hypotheses were tested in two studies, namely an experiment and a field experimental survey, with stimuli from two product categories.FindingsThe results of the two empirical studies with Chinese participants consistently demonstrate that revealing the actual country of origin of the brands undermines consumers' purchase intention for local brands that use foreign brand names, but does not impact consumers' purchase intention for foreign brands that use local brand names.Originality/valueThis research first investigates the effects of adapting the brand names into local language of developing countries for brands from developed countries on consumers' purchase intention, which provides new insight into the literature on foreign branding and country of origin effects as well as practical implications for brand managers.

Service productivity as mutual learning

2015 ◽  
Vol 7 (2/3) ◽  
pp. 296-311 ◽  
Author(s):  
Christian Grönroos ◽  
Katri Ojasalo
Keyword(s):  
Open Systems ◽  
Cost Savings ◽  
Service Organizations ◽  
Content Type ◽  
Mutual Learning ◽  
Context Learning ◽  
Starting Point ◽  
Service Production ◽  
Service Productivity ◽  
Internal Efficiency

Purpose – The purpose of this paper is to analyse the mutual learning implications for service productivity of the characteristics of service and service production. Design/methodology/approach – This is a conceptual paper. The starting point is, first of all, that productivity as a management concept should help a firm to manage its economic profit, and secondly, that service organizations are open systems, where the customers participate as co-producers and are exposed to the firm’s production resources and processes. Unlike in manufacturing, to understand productivity in service organizations as a means of managing profit, cost effects and revenue effects of changes in the productions system cannot be separated. Due to the interaction between customers and the firm’s resources during service production, dialogical collaboration between them develops. This enables mutual learning. Findings – Given the social dynamics in service production processes, four learning processes that influence service productivity are identified. Two processes enhance the organizations’s internal efficiency (cost savings), and two enhance its external effectiveness (perceived quality, revenue generation); two are organization-driven, two are customer-driven. Research limitations/implications – The mutual learning model demonstrates how the service provider by learning from the dynamics of service encounters in many ways can manage the productivity of the organizations’s processes. It shows that learning enables improvement of service productivity through effects enhancing both internal efficiency and external effectiveness. Originality/value – In a productivity context, learning has not earlier been studied as a mutual learning phenomenon.

Loss reserve variability and loss reserve errors

2014 ◽  
Vol 15 (3) ◽  
pp. 248-263 ◽  
Author(s):  
Enoch Nii Boi Quaye ◽  
Charles Andoh ◽  
Anthony Q.Q. Aboagye
Keyword(s):  
Insurance Companies ◽  
Content Type ◽  
Main Research ◽  
Loss Reserve ◽  
Smooth Flow ◽  
Regulatory Standards ◽  
Sources Of Variation ◽  
Regulatory Bodies ◽  
Property And Liability Insurance ◽  
Industry Trends

Purpose – The purpose of this study is to assess the level and variability of Ghanaian property and liability insurer’s reserve estimates to examine its sources and ascertain if reserve errors are random or not (i.e. manipulated or not). Design/methodology/approach – It uses information on insurer claim reserve provisions, claims outstanding, claims incurred and claims paid for the period of 2000-2010. Categorizing the sources of variation as endogenous and exogenous, the authors use the panel correlated standard error regression model to determine sources and magnitude of industry reserve error. Findings – The study finds that size, age, lag of loss reserve error, inflation rate and real gross domestic product are significant in determining the degree of reserve error variation. Type of ownership (domestic or foreign) is, however, not a significant source of variation. Further, the authors found that industry reserve errors are random (not manipulated) across firms, suggesting that sampled insurers act independently on reserve error decision making and are not influenced by industry trends and competition. Research limitations/implications – The main research study limitation is the difficulty involved in obtaining annual statements from insurance companies in Ghana. Reluctance of companies to make statements available impeded on the smooth flow of the study during data collection. Practical implications – Policy-wise, this suggest that regulatory bodies can uniquely set reserve error levels for existing firms with little influence on competition. Further, the Ghanaian insurance regulator does not to focus on the type of ownership (foreign or local) when setting regulatory standards. However, size of the company and age (length of operation) should be considered. Originality/value – This paper is the first empirical study to examine the loss reserve error and loss reserve variability of Ghanaian property and liability insurance companies.

A novel design space concept for design of concrete foundation supporting chemical reactors

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Osama Bedair
Keyword(s):  
Design Space ◽  
Cost Savings ◽  
Space Representation ◽  
Chemical Reactors ◽  
Content Type ◽  
Gas Recovery ◽  
Wide Range ◽  
Numerical Finite Element ◽  
Novel Concept ◽  
Reactor Models

PurposeThis paper presents a novel concept for design of concrete support system for chemical reactors used in refineries and petrochemical plants. Graphical method is described that can be used to size the concrete base and piling system. Recommendations are also provided to optimize the parameters required for the design. The procedure is illustrated for design of two reactor models commonly used in gas recovery units.Design/methodology/approachDesign space representation for the foundation system is described for chemical reactors with variable heights. The key points of the design graph are extracted from the numerical finite element models. The reactor load is idealized at discrete points to transfer the loads to the piles. Bilateral spring system is used to model the soil restrains.FindingsThe graphical approach is economical and provides the design engineer the flexibility to select the foundation parameters from wide range of options.Practical implicationsThe concept presented in the paper can be utilized by engineers in the industry for design of chemical reactors. It must be noted that little guidelines are currently available in practice addressing the structural design aspects.Originality/valueA novel concept is presented in this paper based on significant industrial design experience of reactor supports. Using the described method leads to significant cost savings in material quantity and engineering time.

Consumer perception vs sensory assessment of the quality of clothes of selected brands available on the Polish market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Renata Salerno-Kochan ◽  
Paweł Turek
Keyword(s):  
Quality Assessment ◽  
Sensory Quality ◽  
Brand Names ◽  
Survey Method ◽  
Quality Level ◽  
Sensory Assessment ◽  
Content Type ◽  
Significant Difference ◽  
Consumer Assessment

PurposeThe aim of the study reported in this article was to establish whether the quality of clothes of a given brand is perceived and assessed by consumers at the same level. An additional purpose was to identify the features that characterize the quality of popular, among Polish young female consumers, clothing brands and to classify them according to their quality level (perceived and assessed).Design/methodology/approachThe article presents two approaches to consumer assessment of the quality of clothes: the survey method, in which the product quality was determined by 320 Polish female young respondents (19–25) based on their own previous experiences and impressions related to a particular clothing brand, and a direct assessment of shirts of selected brands using a sensory quality assessment method, a five-point hedonic scale with the verbal anchor (115 evaluators).FindingsThe research has revealed a significant difference between the perception of selected quality features of brands and the consumer assessment of the products. The perception maps developed based on the PROFIT analysis (PROperty FITting) as well as on cluster analysis provided interesting information about the situation of selected brands and their features in comparison with others and allowed to identify strong and weak features characterizing a given category.Research limitations/implicationsThis study has several limitations. First and foremost, the research results cannot be generalized to all consumers because they encompass the results from one national context and one population of respondents (young females). It should also be noted that the conducted research comprises only the most popular clothing brands available on the Polish market, in particular, the fast fashion segment brands. Furthermore, it would be advisable to carry out a sensory assessment of the quality of other clothing items offered under the brand names investigated.Practical implicationsThis research could be a valuable source of information for clothing company managers, thanks to which they could better manage their brand and its position on the market. When undertaking marketing activities consisting of building positive perceptions about the product, it is important to make sure that the product offers an attractive sensory experience. When real quality deviates from consumer perceptions about the quality, managers should take corrective actions to restore and even improve the brand image in the eyes of the consumer, as well as to ensure the brand and the products offered under it a stable position on the market.Originality/valueBy comparing two approaches to consumer quality assessment, discrepancies between declared and real (sensory) quality of clothes have been identified and the distinctive features that differentiate selected brands regarding their quality level have been indicated.

The role of market and product category characteristics in local versus foreign language branding in Latin America

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Pablo Farías ◽  
Luis Torres
Keyword(s):  
Latin America ◽  
Foreign Language ◽  
Latin American ◽  
Product Category ◽  
Cultural Dimensions ◽  
Brand Names ◽  
High Tech ◽  
Content Type ◽  
Local Language ◽  
Product Categories

PurposeThis paper explores which market and product category characteristics could influence the use of foreign language brand names (i.e. whether a brand uses a foreign language versus local language brand name) in some of the largest Latin American countries.Design/methodology/approachHypotheses are tested using 880 brands from 39 product categories and nine Latin American markets using a hierarchical logistic regression.FindingsResults revealed that foreign language brand names are more likely to be used in product categories related to local infrastructure, high-tech and global community. In contrast, local language brand names are more likely to be used in product categories associated to subscriptions. Findings also suggest that Hofstede's national cultural dimensions are significant factors. Finally, the results revealed that foreign language brand names are more likely to be used in markets with a low level of foreign language proficiency.Originality/valueThis paper shows the importance of considering market and product category characteristics and their potential influence on local versus foreign language branding in Latin America – an ignored issue in previous research.

How can an economic scenario generation model cope with abrupt changes in financial markets?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yi-Hsi Lee ◽  
Ming-Hua Hsieh ◽  
Weiyu Kuo ◽  
Chenghsien Jason Tsai
Keyword(s):  
Financial Markets ◽  
Large Scale ◽  
Moving Average ◽  
Insurance Companies ◽  
Scenario Generation ◽  
Autoregressive Moving Average ◽  
Generation Model ◽  
Content Type ◽  
Abrupt Changes ◽  
Key Issues

PurposeIt is quite possible that financial institutions including life insurance companies would encounter turbulent situations such as the COVID-19 pandemic before policies mature. Constructing models that can generate scenarios for major assets to cover abrupt changes in financial markets is thus essential for the financial institution's risk management.Design/methodology/approachThe key issues in such modeling include how to manage the large number of risk factors involved, how to model the dynamics of chosen or derived factors and how to incorporate relations among these factors. The authors propose the orthogonal ARMA–GARCH (autoregressive moving-average–generalized autoregressive conditional heteroskedasticity) approach to tackle these issues. The constructed economic scenario generation (ESG) models pass the backtests covering the period from the beginning of 2018 to the end of May 2020, which includes the turbulent situations caused by COVID-19.FindingsThe backtesting covering the turbulent period of COVID-19, along with fan charts and comparisons on simulated and historical statistics, validates our approach.Originality/valueThis paper is the first one that attempts to generate complex long-term economic scenarios for a large-scale portfolio from its large dimensional covariance matrix estimated by the orthogonal ARMA–GARCH model.

A 12-pulse rectifier with passive harmonic reduction based on UIPT in more electric aircrafts

Circuit World ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rohollah Abdollahi
Keyword(s):  
Power Factor ◽  
Harmonic Distortion ◽  
Cost Savings ◽  
Cost Effective ◽  
Industrial Applications ◽  
Input Current ◽  
New Combination ◽  
Content Type ◽  
Harmonic Reduction ◽  
Simulation Results

Purpose The purpose of this paper is to provide a T autotransformer based 12-pulse rectifier with passive harmonic reduction in more electric aircraft applications. The T autotransformer uses only two main windings which result in volume, space, size, weight and cost savings. Also, the proposed unconventional inter-phase transformer (UIPT) with a lower kVA rating (about 2.6% of the load power) compared to the conventional inter-phase transformer results in a more harmonic reduction. Design/methodology/approach To increase rating and reduce the cost and complexity of a multi-pulse rectifier, it is well known that the pulse number must be increased. In some practical cases, a 12-pulse rectifier (12PR) is suggested as a good solution considering its simple structure and low weight. But the 12PR cannot technically meet the standards of harmonic distortion requirements for some industrial applications, and therefore, they must be used with output filters. In this paper, a 12PR is suggested, which consists of a T autotransformer 12PR and a passive harmonic reduction (PHR) based on the UIPT at direct current (DC) link. Findings To show the advantage of this new combination over other solutions, simulation results are used, and then, a prototype is implemented to evaluate and verify the simulation results. The simulation and experimental test results show that the input current total harmonic distortion (THD) of the suggested 12PR with a PHR based on UIPT is less than 5%, which meets the IEEE 519 requirements. Also, it is shown that in comparison with other solutions, it is cost effective, and at the same time, its power factor is near unity, and its rating is 29.92% of the load rating. Therefore, it is obvious that the proposed rectifier is a practical solution for more electric aircrafts. Originality/value The contributions of this paper are summarized as follows. The suggested design uses a retrofit T autotransformer, which meets all technical constraints, and in comparison, with other options, has less rating, weight, volume and cost. In the suggested rectifier, a PHR based on UIPT at its dc link of 12PR is used, which has good technical capabilities and lower ratings. In the PHR based on UIPT, an IPT is used, which has an additional secondary winding and four diodes. This solution leads to a reduction in input current THD and conduction losses of diodes. In full load conditions, the input line current THD and power factor are 4% and 0.99, respectively. The THD is less than 5%, which satisfies IEEE-519 and DO-160G requirements.

The factors behind working in virtual community

2019 ◽  
Vol 12 (2) ◽  
pp. 246-267 ◽  
Author(s):  
Anitha Acharya
Keyword(s):  
Virtual Teams ◽  
Virtual Community ◽  
Cost Savings ◽  
Working Hours ◽  
Substantial Cost ◽  
Content Type ◽  
Part Time ◽  
Research Findings ◽  
Hourly Basis ◽  
Practical Implications

Purpose In this paper, the prior research on virtual teams was reviewed to assess the state of the literature. The purpose of this paper is to determine why individuals prefer working in virtual teams (also termed liquid workers and part-time workers). Previous researchers have focussed on the benefits that organizations receive if they hire liquid workers, but to date, no research has been conducted to determine the perspective of these liquid workers. The various definitions of virtual teams are discussed and an integrative definition is proposed that suggests all teams may be defined in terms of their extent of virtualness. Design/methodology approach A systematic review of the literature on virtual teams was conducted. The data were collected from 12 informants. A thematic analysis was used to analyse the data. Findings Six main themes were identified, namely, pliability, opportunities, increased earnings, vigour, family and transportation. Research limitations/implications This study was conducted in a three-metropolitan city in India and warrants being extended to rural and international settings to gain additional insights and confirmation of the research findings. Practical implications It is suggested that organizations who recruit liquid workers will be in a position for substantial cost savings; this is because organizations usually make payment of liquid workers’ wages on an hourly basis. This will help the organizations to schedule the number of working hours depending on their needs. Originality/value The current study is novel as there is a paucity of research in identifying the factors behind working in the virtual community in India. This study presents the first research of its kind to the best knowledge of the author, and the findings will be valuable for companies who are looking for cost savings.

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