Popular in Professional

Medicine

Induction of Social Contagion

Yale University Nicholas A. Christakis

Business

The Allegory of the Favela: The Multifaceted Effects of Socioeconomic Mobility

University of Pennsylvania Leandro S. Pongeluppe

Architecture

Connecting Cities and Nature

University of Virginia Timothy Beatley

Human Rights Law

Human Rights and Corruption: Problems and Potential of Individualising a Systemic Problem

Max Planck Institute Anne Peters

Finance

Chinese Exchange Rate Policy: Lessons for Global Investors

University of California San Diego Michael Melvin

Law

A statistical approach to law school citation rankings

University of Virginia Joshua Fischman

Education

Does regulation affect firm strategic repositioning across submarkets?

View more insights in Professional - Business - Management

View more figures from Indian Institute of Management Lucknow

View the page of Priyatam Anurag

Read the Study

Next in Business

The Making of the “Good Bad” Job: How Algorithmic Management Manufactures Consent Through Constant and Confined Choices

Lindsay Cameron | University of Pennsylvania

Achieving Mutual Understanding Without Saying a Word

Xiao-Ping Chen | University of Washington

Priyatam Anurag discusses coercive institutional pressures as an impetus for firms to reposition across intraindustry boundaries.

Image courtesy of interviewee. January 25, 2024

Log-in or Sign-up to Faculti
Currently viewing this subject insight as a guest. You have insight(s) remaining for this month. Login to view 8000+ figures on the platform.

Generating Workspace...

Export as PDF

This video video is a transcript of a presentation discussing a research study on price controls in India, particularly focusing on how firms respond to these regulations. The speaker acknowledges their co-authors and explains that price controls can create an unattractive market position for firms, prompting them to reposition their offerings.

The study examines repositioning driven by regulation, contrasting it with previous literature that primarily focused on competition or technology as drivers. The researchers argue that regulation induces firms to shift towards less regulated segments of the market, specifically exploring the market for paracetamol, where they note significant repositioning from the regulated 500 mg dosage to the unregulated 650 mg dosage.

They employ a quasi-experimental methodology, analyzing market changes and the correlation of marketing intensity with successful repositioning. The findings indicate that firms not only shifted market presence but also raised prices, suggesting profitability from repositioning. The study also highlights potential health implications, as the increased use of higher dosages of paracetamol contrasts with global trends advocating for reduced dosages.

The research concludes by noting the effectiveness of repositioning under regulatory pressure and its implications for market dynamics and public health, alongside recommendations for policy awareness regarding the unintended consequences of such regulations. Finally, it mentions that post-study, similar demand-shifting practices were penalized by regulatory bodies, validating the study's findings. Overall, the study highlights the complex interplay between regulation, market behavior, and firm strategies in the pharmaceutical sector.

Language:

Export as PDF

X-TIMESTAMP-MAP:LOCAL=00:00:00.000,MPEGTS=900000

00:00.015 --> 00:01.045
First of all, I think

00:01.045 --> 00:03.085
before we start, I think it's a joint work

00:03.195 --> 00:07.805
with my co-authors, professor Aja and Professor Riko.

00:08.345 --> 00:09.525
And, this part

00:09.525 --> 00:13.045
of a larger work we were doing on price controls in India.

00:13.665 --> 00:15.885
And, we were really interested in seeing

00:16.065 --> 00:19.605
how firms are responding to these regulatory changes.

00:20.105 --> 00:22.565
And, price control for

00:22.565 --> 00:25.085
that matter is fairly coercive in nature.

00:25.665 --> 00:28.485
So suppose, they set up prices

00:29.225 --> 00:31.365
and, some kind of a ceiling price.

00:31.465 --> 00:34.925
And if you don't follow that, then you can face penalty

00:35.225 --> 00:36.285
and things of that kind.

00:36.705 --> 00:40.045
So what it does is that it makes firms

00:40.665 --> 00:42.245
who are presenting those markets,

00:42.745 --> 00:45.845
or in those sub-markets, their position becomes

00:46.405 --> 00:49.085
unattractive, because of price regulation.

00:49.265 --> 00:52.165
And then that is something which is an impetus for

00:52.845 --> 00:54.005
repositioning that,

00:54.115 --> 00:56.045
because of regulation, your

00:56.605 --> 01:00.165
existing market position becomes, becomes unattractive.

01:00.585 --> 01:04.165
And then that becomes an impetus for, repositioning.

01:04.505 --> 01:06.845
So in the prior literature on repositioning,

01:06.845 --> 01:09.365
there are two mechanisms which were discussed earlier.

01:09.695 --> 01:13.565
First was more to do with competition driven repositioning.

01:13.865 --> 01:16.565
So you have, say, excessive competition coming in,

01:16.825 --> 01:19.205
and then that would act as an impetus for firms

01:19.225 --> 01:21.365
to reposition from their existing location.

01:21.865 --> 01:24.085
And the second was driven by technology.

01:24.185 --> 01:26.605
So there are technological changes, the emergence,

01:26.705 --> 01:28.965
but dominant design and things of that kind.

01:28.985 --> 01:30.645
So that would again, be an impetus

01:30.645 --> 01:32.885
for repositioning in our paper.

01:32.995 --> 01:35.725
What we were basically looking at was,

01:35.725 --> 01:37.525
because of the presence of regulation.

01:37.945 --> 01:40.685
Now, like I said, it makes your existing position.

01:41.025 --> 01:42.885
So suppose you have a market presence

01:42.945 --> 01:45.565
and, the regulated, segment

01:45.695 --> 01:49.765
where there is a price ceiling in place, so that,

01:50.065 --> 01:52.365
market presence then becomes unattractive.

01:52.585 --> 01:53.885
It becomes unprofitable,

01:54.385 --> 01:56.765
and then, you have to re reposition.

01:56.865 --> 01:59.085
So that is the, where we kind

01:59.085 --> 02:02.085
of complimented the existing literature on repositioning.

02:02.465 --> 02:05.685
And we said that in the previous work on repositioning,

02:05.715 --> 02:08.045
this aspect has not really been covered.

02:08.265 --> 02:11.325
And then we are complimenting the literature on that.

02:11.985 --> 02:15.245
Uh, there were a couple of other interesting, I mean,

02:15.245 --> 02:18.685
so when we examined this phenomena in detail,

02:18.715 --> 02:20.245
what we also found was

02:20.245 --> 02:22.325
that suppose we are talking about competition driven

02:23.625 --> 02:26.165
or ing, which is coming from technological changes.

02:26.875 --> 02:29.885
Most of them were exogenous in nature.

02:31.215 --> 02:33.635
Uh, but in our case, it is,

02:33.895 --> 02:36.115
it becomes like firm driven accent.

02:36.455 --> 02:40.115
So in that sense, we were talking about repositioning,

02:40.115 --> 02:42.435
which was endogenous in nature.

02:43.885 --> 02:47.425
Uh, second, when you look at competition, then,

02:47.555 --> 02:49.065
there is this element

02:49.255 --> 02:51.545
that forms may undercut each other, right?

02:51.845 --> 02:54.585
So suppose there is a price ceiling in pay in place.

02:55.005 --> 02:57.705
So as a result, suppose some forms increase the

02:57.705 --> 02:58.905
price, it may

02:58.965 --> 03:03.165
Give opportunity for other firms to say, undercut them

03:03.185 --> 03:05.405
and gain markets share and things of that kind.

03:05.825 --> 03:09.245
So, as a result, repositioning may lead

03:09.245 --> 03:10.365
to surprise decrease.

03:10.385 --> 03:14.445
For example, when repositioning is, accompanied by,

03:14.445 --> 03:18.605
price decrease, then, it may not lead to say,

03:18.605 --> 03:21.965
benefit to the firms that firms are looking for

03:21.965 --> 03:23.125
through repositioning.

03:23.505 --> 03:27.565
So what we, also found out that,

03:27.895 --> 03:30.725
firms were repositioning to insulated niches.

03:30.725 --> 03:32.965
So in those insulated niches,

03:33.205 --> 03:35.645
whatever you are doing it is also probably leading

03:35.865 --> 03:37.245
to market level changes.

03:37.905 --> 03:39.205
And as a result,

03:39.315 --> 03:41.765
they were insulated from competitive pressure.

03:42.345 --> 03:45.325
And, that is how, the, the,

03:45.625 --> 03:50.445
the repositioned in a way that, they, they,

03:50.995 --> 03:54.525
were sealed it from the negative effect of, regulation.

03:54.985 --> 03:58.525
And at the same time, I mean, they, they did it, I mean,

03:58.525 --> 04:00.325
in a way which, kind

04:00.325 --> 04:02.765
of changed the entire market behavior.

04:03.225 --> 04:07.085
Uh, so, so that was the basic context of our study.

04:07.195 --> 04:09.365
Yeah, we looked at this quasi.

04:09.585 --> 04:13.205
So the method that we followed was quasi experiment method.

04:13.865 --> 04:15.885
So in the particular empirical setting,

04:15.985 --> 04:19.165
we examined the market for paracetamol,

04:19.425 --> 04:23.125
and, paracetamol, if you see, there are approximate,

04:23.705 --> 04:25.565
doses, which is there.

04:25.665 --> 04:27.725
So you have paracetamol 500 mg

04:27.985 --> 04:30.285
and then paracetamol six 50 mg.

04:30.305 --> 04:32.205
So those are approximate doses.

04:32.625 --> 04:35.525
Uh, but because of the effect of regulation,

04:36.275 --> 04:38.765
only 500 mg was under regulation,

04:38.825 --> 04:42.085
but six 50 mg was not under regulation.

04:42.225 --> 04:46.205
So, so as a result, there was a, a opportunity for farms

04:46.205 --> 04:50.205
to reposition from 500 mg 2 6 50 mg,

04:50.645 --> 04:53.165
increase their market presence in six 50 mg.

04:53.465 --> 04:55.965
So that is the empirical, context

04:56.355 --> 04:57.685
that, that we looked at.

04:58.185 --> 05:01.925
And then, this gave us a nice quasi

05:01.925 --> 05:03.325
experiment, kind of a design.

05:03.705 --> 05:06.485
Uh, we also use international data as part

05:06.485 --> 05:07.605
of the robustness check.

05:07.625 --> 05:10.045
So suppose regulation is there in India,

05:10.585 --> 05:13.645
but globally you do not really have this

05:13.645 --> 05:14.685
kind of regulation.

05:15.065 --> 05:18.605
So that set up a nice, kind of a quasi natural experiment

05:18.625 --> 05:19.765
and of a design for us.

05:20.225 --> 05:21.685
So, we were looking at,

05:21.785 --> 05:25.605
so suppose if firms are increasing their market presence in

05:25.705 --> 05:29.325
say, six 50 and G in India, do we observe similar kind

05:29.325 --> 05:30.845
of thing, even interact?

05:31.585 --> 05:34.085
Uh, but when we did this using a difference

05:34.085 --> 05:37.565
and difference kind of an estimation, we found that,

05:37.565 --> 05:39.365
this, this, feature

05:39.785 --> 05:42.525
of repositioning was unique to the Indian context.

05:43.025 --> 05:47.125
So, so the extent of repositioning that, that we found,

05:47.545 --> 05:52.165
was close to so upwards of say, 10% when we looked at across

05:52.925 --> 05:55.245
specifications in India or, or globally.

05:56.105 --> 06:00.125
And, like I said, this repositioning, I mean,

06:00.125 --> 06:02.845
if it is accompanied by price decrease, for example,

06:02.945 --> 06:05.245
so it would not really be profitable for firms.

06:05.745 --> 06:07.405
But what we really found was

06:07.405 --> 06:10.485
that this repositioning was also accompanied

06:10.545 --> 06:11.845
by price increase.

06:11.905 --> 06:16.765
So there was a price increase of say, 25 per se, of,

06:16.825 --> 06:19.125
so, post regulation that,

06:19.125 --> 06:20.965
that we could measure as an effect.

06:21.105 --> 06:25.485
So, so, you have sift of market presence from

06:26.195 --> 06:29.565
more of 500 mg to more of six 50 mg.

06:29.825 --> 06:33.005
And simultaneously there is an increase in,

06:33.425 --> 06:34.965
in prices also.

06:35.425 --> 06:39.325
Uh, the third result is to explain the, the market

06:39.705 --> 06:43.245
or the mechanism through which all of it is happening.

06:43.625 --> 06:45.445
So we looked at marketing.

06:45.625 --> 06:49.685
So, so, it is possible that this may just be an effect

06:49.685 --> 06:50.765
of scarcity, right?

06:50.785 --> 06:53.845
So because of regulation, probably there is a scarcity,

06:53.985 --> 06:57.045
and as a result, you have prices are increasing.

06:57.585 --> 07:00.085
So, then we looked at whether firms

07:00.195 --> 07:03.405
with greater marketing intensity, are they able

07:03.405 --> 07:06.965
to reposition more because repositioning is also costly.

07:07.025 --> 07:08.685
It, it is a cost. So this kind

07:08.685 --> 07:11.325
of demands lifting is also costly.

07:11.625 --> 07:15.245
And, so, so in the third result, in the third set

07:15.245 --> 07:18.285
of results, what we found was that firms

07:18.355 --> 07:20.685
with greater marketing intensity were able

07:20.685 --> 07:21.805
to reposition more.

07:22.185 --> 07:24.725
So that kind of causally explained

07:24.865 --> 07:28.205
or added the mechanism with to the entire thing.

07:28.945 --> 07:31.085
Uh, how is this shift happening, right?

07:31.225 --> 07:32.925
So, there is this,

07:32.925 --> 07:35.365
physician level detailing, which may be happening.

07:35.425 --> 07:39.845
So as you would know, pharmaceutical markets doctors act

07:39.845 --> 07:41.605
as some kind of an intermediary.

07:41.865 --> 07:45.245
So it is not like, I mean, consumers by themselves

07:45.265 --> 07:48.485
or patients by themselves are asking more of,

07:48.505 --> 07:49.645
say, six 50 md.

07:49.905 --> 07:54.165
So there's an involvement of, say, doctors as, as,

07:54.345 --> 07:57.965
as a critical sort of presence in the entire thing.

07:58.465 --> 08:01.885
So we also looked at, prescriptions, for example.

08:02.025 --> 08:03.925
So we used prescription data

08:04.265 --> 08:08.405
and then examined whether there's a say in terms of more

08:08.405 --> 08:12.245
of prescriptions going towards 6, 6 50 mg.

08:12.385 --> 08:14.845
And so that was also one of the mechanisms.

08:14.865 --> 08:16.445
So you have marketing intensity

08:16.915 --> 08:21.365
because of which now suppose firms are in a way investing

08:21.365 --> 08:22.965
more in terms of demand shifting.

08:23.465 --> 08:26.365
Second aspect is as they are doing it,

08:26.425 --> 08:29.165
so it may also be influencing the,

08:29.235 --> 08:31.005
physician's prescription, right?

08:31.305 --> 08:33.445
But, having said that,

08:33.585 --> 08:37.445
now when we look at physician's prescription within say,

08:37.555 --> 08:40.565
paracetamol, for example, so that may be endogenous.

08:40.705 --> 08:44.085
So, so we look for a proxy variable that what is,

08:44.165 --> 08:47.005
for example, happening in an antibacterials.

08:47.345 --> 08:51.405
So we use prescriptions in antibacterials as some kind

08:51.405 --> 08:55.725
of a proxy for, marketing effort for, for these pumps.

08:56.065 --> 08:59.405
And then we found results, which was consistent with,

08:59.865 --> 09:02.325
our predictions that, farms,

09:02.325 --> 09:04.205
which are investing more.

09:04.515 --> 09:06.885
They are, so this impact

09:06.885 --> 09:10.925
and prescription in say antibacterial is also correlated

09:10.925 --> 09:12.285
with whatever we are seeing.

09:12.475 --> 09:16.045
Yeah. Uh, our study in a way confirmed.

09:16.305 --> 09:19.565
Uh, so when we looked at this curiosity that

09:19.585 --> 09:21.445
how is this repositioning happening,

09:21.665 --> 09:23.405
or, no, I mean,

09:23.425 --> 09:26.045
is this repositioning something which is profitable?

09:26.185 --> 09:29.325
So, when it is happening, it is, like I said

09:29.325 --> 09:31.125
before, if it is unless,

09:31.125 --> 09:35.445
and until it is accompanied by say, price increase,

09:35.665 --> 09:38.205
it does not really make business sense performance.

09:38.745 --> 09:41.285
So, in our results, we also used

09:41.465 --> 09:43.765
or in our, hypothesis database,

09:43.765 --> 09:48.445
and we also used document Steiner, model to explain,

09:48.785 --> 09:52.965
this demand shifting, as, as a, as a mechanism.

09:53.385 --> 09:57.885
And then we found, evidence, which was,

09:58.265 --> 10:00.445
consistent with our hypothesis.

10:00.785 --> 10:03.885
And some of the implications which were there from,

10:03.885 --> 10:06.165
especially from a policy point of view, was that,

10:06.465 --> 10:09.525
so suppose forms that repositioning on, they are able

10:09.545 --> 10:10.565
to reposition.

10:11.105 --> 10:13.885
So that makes regulation ineffective, right?

10:13.945 --> 10:17.085
So that was, that, while it is profitable

10:17.105 --> 10:20.005
for firms regulation kind of,

10:20.005 --> 10:22.085
becomes ineffective in, in that sense.

10:22.625 --> 10:25.685
The second was that, so this is not just regulation

10:25.685 --> 10:27.205
of any market.

10:27.745 --> 10:30.125
It is a regulation in the,

10:30.225 --> 10:32.045
in the medicine market, for example.

10:32.265 --> 10:36.045
And then suppose, firms are repositioning in this way.

10:36.395 --> 10:40.165
This also has health implications that, so, if, so,

10:40.195 --> 10:42.205
what we found during the period of study

10:42.635 --> 10:45.725
that earlier paracetamol, for example, was seen

10:45.745 --> 10:47.485
as a safe kind of a medicine.

10:48.065 --> 10:51.725
But more recently what we found was that US FDA,

10:51.725 --> 10:56.565
for example, was asking for, for per tablet dose

10:56.585 --> 10:59.685
to be reduced for five, 400 mg for, for example.

11:00.225 --> 11:03.685
So in a period where globally there was a movement of safe,

11:04.265 --> 11:07.885
per dose, reducing the strength in the same period,

11:07.995 --> 11:11.365
what we were observing that Indians were actually,

11:11.435 --> 11:13.965
consuming more of paracetamol six 50 mg.

11:13.965 --> 11:17.125
So globally, there was a voice about making say,

11:17.185 --> 11:19.525
per dose restricted to 400 mg.

11:19.705 --> 11:23.205
And in the same period, the, the,

11:23.655 --> 11:25.645
trend in the Indian market was

11:25.645 --> 11:27.885
that it is moving towards six 50 mg.

11:28.145 --> 11:31.765
And now that is something which may really be, say, overdose

11:31.825 --> 11:33.805
of, paracetamol, right?

11:33.825 --> 11:36.445
So it'll have a negative health implication.

11:36.825 --> 11:38.765
So that was the second aspect.

11:39.825 --> 11:43.725
Now, something which happened after our study, so,

11:44.095 --> 11:46.645
after our study, and then, paracetamol,

11:46.705 --> 11:49.725
as you would see, was also, very much used

11:49.725 --> 11:52.445
during covid, for example. So

11:52.655 --> 11:54.805
Later on what we discovered that one

11:54.805 --> 11:57.805
of the firms in India was, penalized

11:58.065 --> 12:02.725
by the competition commission for, doing these kind

12:02.725 --> 12:04.045
of demand shifting, right?

12:04.145 --> 12:07.765
So, so covid, I mean, our study was pre covid,

12:08.345 --> 12:13.125
but post covid, again, we found that, firm action,

12:13.545 --> 12:15.765
for demand shifting, right?

12:15.945 --> 12:20.765
And then, that was, found to be anti competitive.

12:21.145 --> 12:24.845
And then the, the regulator kind of, so that kind

12:24.845 --> 12:26.645
of validated our study further

12:26.915 --> 12:30.565
that whatever we found in terms of demand shifting, it,

12:30.625 --> 12:34.485
it was prevalent, managerial implication.

12:34.765 --> 12:38.525
I think this, repositioning, I think, was,

12:38.825 --> 12:41.845
was more of managerial implication that

12:41.985 --> 12:46.045
how firms can simultaneously kind of increase the quantity

12:46.425 --> 12:49.445
as well as the prices using more

12:49.445 --> 12:51.885
of marketing intensity and things of that kind.

12:51.945 --> 12:55.805
So, so that was the, managerial implication of it.

Impact of Price Controls on Firm Repositioning

00:00:00 - First of all, I think before we start, I think it's a joint work with my co-authors, professor Aja and Professor Riko. And, this part of a larger work we were doing on price controls in India. And, we were really interested in seeing how firms are responding to these regulatory changes. And, price control for that matter is fairly coercive in nature. So suppose, they set up prices and, some kind of a ceiling price.
00:00:35 - and things of that kind. So what it does is that it makes firms who are presenting those markets, or in those sub-markets, their position becomes unattractive, because of price regulation. And then that is something which is an impetus for repositioning that, because of regulation, your existing market position becomes, becomes unattractive. And then that becomes an impetus for, repositioning.
00:01:06 - there are two mechanisms which were discussed earlier. First was more to do with competition driven repositioning. So you have, say, excessive competition coming in, and then that would act as an impetus for firms to reposition from their existing location. And the second was driven by technology. So there are technological changes, the emergence, but dominant design and things of that kind. So that would again, be an impetus for repositioning in our paper. What we were basically looking at was,
00:01:37 - Now, like I said, it makes your existing position. So suppose you have a market presence and, the regulated, segment where there is a price ceiling in place, so that, market presence then becomes unattractive. It becomes unprofitable, and then, you have to re reposition. So that is the, where we kind of complimented the existing literature on repositioning. And we said that in the previous work on repositioning, this aspect has not really been covered.
00:02:11 - there were a couple of other interesting, I mean, so when we examined this phenomena in detail, what we also found was that suppose we are talking about competition driven or ing, which is coming from technological changes. Most of them were exogenous in nature. but in our case, it is, it becomes like firm driven accent. So in that sense, we were talking about repositioning,
00:02:43 - second, when you look at competition, then, there is this element that forms may undercut each other, right? So suppose there is a price ceiling in pay in place. So as a result, suppose some forms increase the price, it may Give opportunity for other firms to say, undercut them and gain markets share and things of that kind. So, as a result, repositioning may lead to surprise decrease.

Repositioning Strategies Amid Price Regulation Changes

00:03:14 - price decrease, then, it may not lead to say, benefit to the firms that firms are looking for through repositioning. So what we, also found out that, firms were repositioning to insulated niches. So in those insulated niches, whatever you are doing it is also probably leading to market level changes. And as a result, they were insulated from competitive pressure.
00:03:45 - the repositioned in a way that, they, they, were sealed it from the negative effect of, regulation. And at the same time, I mean, they, they did it, I mean, in a way which, kind of changed the entire market behavior. so, so that was the basic context of our study. Yeah, we looked at this quasi. So the method that we followed was quasi experiment method.
00:04:15 - we examined the market for paracetamol, and, paracetamol, if you see, there are approximate, doses, which is there. So you have paracetamol 500 mg and then paracetamol six 50 mg. So those are approximate doses. but because of the effect of regulation, only 500 mg was under regulation, but six 50 mg was not under regulation. So, so as a result, there was a, a opportunity for farms
00:04:50 - increase their market presence in six 50 mg. So that is the empirical, context that, that we looked at. And then, this gave us a nice quasi experiment, kind of a design. we also use international data as part of the robustness check. So suppose regulation is there in India, but globally you do not really have this kind of regulation. So that set up a nice, kind of a quasi natural experiment
00:05:20 - So, we were looking at, so suppose if firms are increasing their market presence in say, six 50 and G in India, do we observe similar kind of thing, even interact? but when we did this using a difference and difference kind of an estimation, we found that, this, this, feature of repositioning was unique to the Indian context. So, so the extent of repositioning that, that we found, was close to so upwards of say, 10% when we looked at across
00:05:56 - And, like I said, this repositioning, I mean, if it is accompanied by price decrease, for example, so it would not really be profitable for firms. But what we really found was that this repositioning was also accompanied by price increase. So there was a price increase of say, 25 per se, of, so, post regulation that, that we could measure as an effect. So, so, you have sift of market presence from

Market Mechanisms and Price Dynamics Explained

00:06:29 - And simultaneously there is an increase in, in prices also. the third result is to explain the, the market or the mechanism through which all of it is happening. So we looked at marketing. So, so, it is possible that this may just be an effect of scarcity, right? So because of regulation, probably there is a scarcity, and as a result, you have prices are increasing.
00:07:00 - with greater marketing intensity, are they able to reposition more because repositioning is also costly. It, it is a cost. So this kind of demands lifting is also costly. And, so, so in the third result, in the third set of results, what we found was that firms with greater marketing intensity were able to reposition more. So that kind of causally explained or added the mechanism with to the entire thing.
00:07:31 - So, there is this, physician level detailing, which may be happening. So as you would know, pharmaceutical markets doctors act as some kind of an intermediary. So it is not like, I mean, consumers by themselves or patients by themselves are asking more of, say, six 50 md. So there's an involvement of, say, doctors as, as, as a critical sort of presence in the entire thing. So we also looked at, prescriptions, for example.
00:08:04 - and then examined whether there's a say in terms of more of prescriptions going towards 6, 6 50 mg. And so that was also one of the mechanisms. So you have marketing intensity because of which now suppose firms are in a way investing more in terms of demand shifting. Second aspect is as they are doing it, so it may also be influencing the, physician's prescription, right? But, having said that,
00:08:37 - paracetamol, for example, so that may be endogenous. So, so we look for a proxy variable that what is, for example, happening in an antibacterials. So we use prescriptions in antibacterials as some kind of a proxy for, marketing effort for, for these pumps. And then we found results, which was consistent with, our predictions that, farms, which are investing more.
00:09:06 - and prescription in say antibacterial is also correlated with whatever we are seeing. Yeah. our study in a way confirmed. so when we looked at this curiosity that how is this repositioning happening, or, no, I mean, is this repositioning something which is profitable? So, when it is happening, it is, like I said before, if it is unless, and until it is accompanied by say, price increase,

Repositioning and Its Regulatory Implications

00:09:38 - So, in our results, we also used or in our, hypothesis database, and we also used document Steiner, model to explain, this demand shifting, as, as a, as a mechanism. And then we found, evidence, which was, consistent with our hypothesis. And some of the implications which were there from, especially from a policy point of view, was that,
00:10:09 - to reposition. So that makes regulation ineffective, right? So that was, that, while it is profitable for firms regulation kind of, becomes ineffective in, in that sense. The second was that, so this is not just regulation of any market. It is a regulation in the, in the medicine market, for example. And then suppose, firms are repositioning in this way. This also has health implications that, so, if, so,
00:10:42 - that earlier paracetamol, for example, was seen as a safe kind of a medicine. But more recently what we found was that US FDA, for example, was asking for, for per tablet dose to be reduced for five, 400 mg for, for example. So in a period where globally there was a movement of safe, per dose, reducing the strength in the same period, what we were observing that Indians were actually,
00:11:13 - So globally, there was a voice about making say, per dose restricted to 400 mg. And in the same period, the, the, trend in the Indian market was that it is moving towards six 50 mg. And now that is something which may really be, say, overdose of, paracetamol, right? So it'll have a negative health implication. So that was the second aspect. Now, something which happened after our study, so,
00:11:46 - as you would see, was also, very much used during covid, for example. So Later on what we discovered that one of the firms in India was, penalized by the competition commission for, doing these kind of demand shifting, right? So, so covid, I mean, our study was pre covid, but post covid, again, we found that, firm action, for demand shifting, right?
00:12:21 - And then the, the regulator kind of, so that kind of validated our study further that whatever we found in terms of demand shifting, it, it was prevalent, managerial implication. I think this, repositioning, I think, was, was more of managerial implication that how firms can simultaneously kind of increase the quantity