Working Paper Article Version 1 This version is not peer-reviewed

An Econometric Analysis of Contracts between Pharmaceutical Firms and French Veterinarians: A Principal-Agency Theory Approach in the Context of Oligopolies

Version 1 : Received: 18 September 2020 / Approved: 19 September 2020 / Online: 19 September 2020 (10:07:07 CEST)

How to cite: Raboisson, D.; Ferchiou, A.; Corre, T.; Perez, S.; Sans, P.; Lhermie, G.; Dervillé, M. An Econometric Analysis of Contracts between Pharmaceutical Firms and French Veterinarians: A Principal-Agency Theory Approach in the Context of Oligopolies. Preprints 2020, 2020090455 Raboisson, D.; Ferchiou, A.; Corre, T.; Perez, S.; Sans, P.; Lhermie, G.; Dervillé, M. An Econometric Analysis of Contracts between Pharmaceutical Firms and French Veterinarians: A Principal-Agency Theory Approach in the Context of Oligopolies. Preprints 2020, 2020090455

Abstract

In France, veterinarians are allowed to both prescribe and deliver drugs, a questioned situation from the perspective of antimicrobial use (AMU) reduction in order to ovoid AM resistance (AMR). This situation places veterinarians in direct commercial relationships with the pharmaceutical industry. The present study aims to describe contracts between pharmaceutical companies and veterinarians during the period 2008-2014. 382 contracts related to 47 drugs belonging to the 8 main pharmaceutical firms (2,320 observations) in France were collected. The price per unit after rebate (PUR) was calculated for each drug and contract. The descriptive analysis demonstrated a high disparity between the content of contracts and the way in which they are presented. A linear regression was then used to explain the PUR with the explanatory variables, which were the yearly purchase objective, the year, the type of drug and type of rebate. The decrease in PUR for each extra €1,000 objective per drug category was established to be €0.061 per 100 kg body weight (BW) for anticoccidiosis treatments, €0.029 per 100 kg BW for anti-inflammatories, €0.0125 per 100 kg BW, €0.0845 per animal for antiparasitics, and €0.031 per animal for intramammary antimicrobials. Applying agency theory shows that veterinarians can be considered the agents in case of monopolistic or oligopolistic situations of pharmaceutical firms, they are considered the principals otherwise. Policies that focus on maintaining veterinarians as principals may help reach the better societal benefit since this helps them maintain access to veterinary services throughout the region at low public cost while being liable for AMU.

Subject Areas

drugs; veterinarian; pharmaceutical firm; contract

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