Encouraging generic drugs (GD) over brand-name drugs is an appealing strategy for reducing medical expenditures. Numerous studies have been conducted on the distinct roles of pharmacist, physician, and patient in the use of GD (Dunne and Dunne, 2015, BMC Medicine). They reveal that pharmacists have the most favorable view of GD; physicians are willing to prescribe GD under certain conditions, and patients avoid using GD frequently. However, the literature overlooks the potential interaction between the three stakeholders and its effect on GD. We intend to contribute to the literature by demonstrating the relationship between such stakeholder interaction and GD use.

Compared to pharmacies with a low hospital concentration, those with a moderate, a high, and a very high hospital concentration use 1-percentage-point (ppt), 2.4-ppt, and 1.4-ppt more GD, respectively. Meanwhile, GD use varies little with the patient concentration level: in comparison to pharmacies with a low patient concentration, GD use is 0.4-ppt higher for those with a high patient concentration but 0.9-ppt lower for those with a very high patient concentration. Increases in GD use are more pronounced in pharmacies where older, male, and low-income patients are overrepresented.  

The results indicate that the association between pharmacies’ GD use and hospital concentration differs greatly from the association between the GD use and patient concentration. A stronger interaction between hospitals and pharmacies may increase GD use, whereas a very close relationship between patients and pharmacies may hinder GD use. The findings highlight the importance of interaction between the stakeholders in promoting GD use.