Modeling competition between two pharmaceutical drugs using innovation diffusion models

TL;DR

This paper introduces a diffusion model that incorporates knowledge spread to analyze competition between two pharmaceutical drugs, specifically focusing on antidiabetic medications in Italy.

Contribution

It presents a novel innovation diffusion model that accounts for knowledge dissemination, enhancing understanding of drug competition dynamics.

Findings

The model effectively captures the competition dynamics between the two drugs.

Knowledge diffusion significantly influences sales performance.

Application to the Italian market demonstrates practical relevance.

Abstract

The study of competition among brands in a common category is an interesting strategic issue for involved firms. Sales monitoring and prediction of competitors' performance represent relevant tools for management. In the pharmaceutical market, the diffusion of product knowledge plays a special role, different from the role it plays in other competing fields. This latent feature naturally affects the evolution of drugs' performances in terms of the number of packages sold. In this paper, we propose an innovation diffusion model that takes the spread of knowledge into account. We are motivated by the need of modeling competition of two antidiabetic drugs in the Italian market.