UROP Research Mentor Project Submission Portal: Submission #846

Overall Research Project Description We will investigate consumers’ choices when the set of options in the market changes. We will focus on a strictly regulated industry, namely the pharmaceutical industry. We will explore physicians’ treatment decisions when the available drug options change. There can be various reasons why the set of drugs available changes, such as new drug entries, exit of existing drugs, or new information on the safety and effectiveness of drugs. We will also examine pharmaceutical firms’ decisions on their product portfolios, which is an important determinant of available products in the market, for instance, whether they voluntarily discontinue drugs when they are to enter the market with a new drug or new version of the same drug with gradual improvements. Old drugs often provide more affordable treatment options due to higher market competition after the patent expires or because they are exposed to price regulations like the Inflation Reduction Act. Using data on the treatment choices, we will examine the impact of voluntary drug discontinuations, which are unrelated to safety concerns, on adherence to treatment, cost of treatment, and consumer surplus.