ATTITUDE TOWARD GENERIC OTC DRUGS Consumers' Attitude Toward Generic OTC Drugs

165 Pages·2017·2.52 MB·English

by  Anil Jharap

Running head: ATTITUDE TOWARD GENERIC OTC DRUGS

Consumers’ Attitude Toward Generic OTC Drugs:
Examining the Effects of Perceived Risk and Consumer Knowledge
Anil Jharap
Erasmus University Rotterdam
Supervisor: Dr. Sonja Wendel
Second reader: Prof. dr. ir. Benedict Dellaert

Master Thesis in partial fulfillment of the requirements for the degree of Master of Science in
Business Economics, Specialization Marketing, Erasmus School of Economics
Abstract

Despite the increased use of OTC drugs, very little is known about consumers’ perception of
generic OTC drugs. In this study, the role of perceived risk types in the relationship between
product category knowledge types and attitude toward generic OTC drugs was investigated.
Primary data was obtained with a self-administered survey method. The results of the multiple
regression analysis suggest that subjective product category knowledge has (1) a direct
positive effect on attitude towards generic OTC drugs, (2) a positive indirect effect by
diminishing the perceived financial risk of generic OTC drugs (complementary mediation).
Furthermore, the results suggest that objective product category knowledge only has a
positive indirect effect on attitude toward generic OTC drugs with the perceived financial risk
of generic OTC drugs acting as the mediator (indirect only mediation). This study highlights
the importance of improving health literacy among consumers.
Keywords: OTC drugs, generic drugs, perceived risk, subjective knowledge, objective
knowledge

Preface
Writing a thesis can be a challenging task. In my experience, perseverance is the key to
achieving a result you can be proud of. At the Erasmus University Rotterdam, I have learned
to think about solutions to future economic issues and their social relevance. I feel this thesis
emphasizes the social responsibility and the impact of economics on society. This thesis
would not be possible without the help and support of others.
First of all, I would like to thank my supervisor for her guidance. Dr. Wendel, dear Sonja, you
always took the time to provide extensive feedback. You encouraged me to think more
critically and analytically. I have learned a tremendous amount during this process and I am
convinced these lessons are helpful to me in my future career. All teachers of the Major
Marketing program and Master Marketing program have inspired me in some way to pursue a
career in marketing and I am grateful for my education at the Erasmus School of Economics.
Second, I would like to thank the people that shared their expertise with me. I would like to
thank Danielle van der Zon and Marten Hummel. Danielle van der Zon of Stichting
Pharmacon took the time to go over the process of the druggist examinations and provided
material that helped me to construct a vital part of my research. This is much appreciated.
Marten Hummel, director at Centraal Bureau Drogisterijbedrijven, welcomed me at their
headquarters and provided me with valuable insights from practice. Also, many thanks to drs.
M. Fathallah of Medsen Apotheek Kralingen for sharing his knowledge of OTC drugs and
Marloes Spanjersberg for her translation work.
Third, I would like to thank all the people who have filled in the survey. I was moved by the
enthusiasm of friends, family, and colleagues to spread the survey.
Lastly, I would like to thank my family for their support. Lieve papa, mama, Bindia en Prya,
ik draag deze scriptie op aan jullie.

Rotterdam, August 22, 2017
Anil Jharap
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Index

1. Introduction ......................................................................................................................... 1
1.1 Drug Brands ................................................................................................................. 1
1.2 Consumer Perceptions of OTC Drug Brands .............................................................. 2
1.3 Attitude Toward Generic OTC Drugs ......................................................................... 3
1.4 Research Question ....................................................................................................... 4
1.5 Delimitations of the Study ........................................................................................... 4
1.6 Contribution ................................................................................................................. 5
1.7 Outline of the Research ............................................................................................... 7
2. Literature Review ................................................................................................................ 8
2.1 Attitude ........................................................................................................................ 8
2.2 Consumer Knowledge ............................................................................................... 14
2.3 Perceived Risk ........................................................................................................... 25
3. Hypothesis Development and Conceptual Model ............................................................. 34
3.1 Perceived Risk and Attitude ...................................................................................... 34
3.2 Knowledge and Attitude ............................................................................................ 35
3.3 Knowledge and Perceived Risk ................................................................................. 38
3.4 Mediating Role of Perceived Risk ............................................................................. 40
3.5 Summary of Hypotheses ............................................................................................ 41
3.6 Conceptual Model ...................................................................................................... 43
4. Method .............................................................................................................................. 44
4.1 Research Design ........................................................................................................ 44
4.3 Sampling .................................................................................................................... 46
4.4 Instrumentation .......................................................................................................... 47
4.5 Survey Development and Structure ........................................................................... 51
4.6 Direct Effects ............................................................................................................. 53
4.7 Mediation Effects ...................................................................................................... 54
5. Analysis ............................................................................................................................. 60
5.1 Sample ....................................................................................................................... 60
5.3 Exploratory Factor Analysis ...................................................................................... 61
5.4 Preliminary Analysis ................................................................................................. 66
5.5 Hypothesis Testing .................................................................................................... 68
6. Discussion ..................................................................................................................... 80
7. Managerial Implications ................................................................................................... 86
8. Limitations and Future Research ................................................................................... 88
Bibliography ............................................................................................................................. 90
Appendix A ............................................................................................................................ 114
Appendix B ............................................................................................................................ 124
Appendix C ............................................................................................................................ 137
Appendix D ............................................................................................................................ 149
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ATTITUDE TOWARD GENERIC OTC DRUGS 1

1. Introduction
The European market for over-the-counter (OTC) drugs continues to expand (Tisman,
2013). OTC drugs are drugs for the purpose of self-medication and are sold to the consumer
without the need of a doctor’s prescription. The OTC market across all European countries is
expanding in value, volume and the range of OTC drugs (Bond, Orru, Leder & Bouvy, 2004).
To illustrate the growth: just for Germany, the total value of OTC drug sales is estimated to be
risen substantially from €7.8B in 2012 to €8.5B in 2014 (Kretschmer, 2015). At the same
time, there is widespread concern about the financial sustainability of health systems in
Europe as healthcare costs are rising due to an aging population (Thomson, Thomas &
Mossialos, 2009). The European Parliament stated that responsible self-medication should be
promoted to reduce health care costs and to encourage people to take responsibility for their
health (“European Parliament Resolution”, 1996). Consequently, countries in Europe have
taken it upon themselves to actively promote self-medication. One of the actions to promote
self-medication is to place more drugs in OTC classes and thereby to increase the number of
OTC drugs available to consumers (Bond et al., 2004). This increment of switches from
prescription-only to OTC availability is regarded as a way to transfer some of the
reimbursement costs of prescriptions drugs to consumers (Creyer, Hrsistodoulakis & Cole,
2001). Other potential benefits are an increased access to effective drugs, a greater autonomy
of consumers in treating minor illnesses, and fewer visits to physicians (Brass, 2001). An
example of a policy reform that had an impact on the accessibility of OTC drugs is the in
2007 introduced Medicines Act in the Netherlands (Brabers, Van Dijk, Bouvy & De Jong,
2013). For the first time in the Netherlands retail access channels such as supermarkets and
gas stations were allowed to sell OTC drugs alongside established pharmacies.
Correspondingly in other European countries, a similar trend is visible, albeit differences in
the exact products available and the regulation of OTC drug use, supply, and distribution.
1.1 Drug Brands
The promotion of responsible self-medication in Europe is a way to empower
consumers to make decisions about OTC drugs to treat or prevent illness. Generally speaking,
consumers can choose between two types of brands of OTC drug: ‘brand-name brands’ and
‘generic brands’ (Smith, 2014). Brand-name drugs carry a distinctive proprietary name
originating from the pharmaceutical company who first discovered and developed the drug –
e.g., Bayer Aspirin. Generics instead have a nonproprietary or established name and are