Tough versus soft regulations to promote generic medications in Italy

This paper investigates the effects of regulations aiming to optimise the multi-agency relationships, with a focus on the prescription choice between generic versus branded medications. In 2012, Italian legislators introduced two laws targeting general practitioners prescription behaviour, a soft (recommendations) law followed by a hard (mandatory) law to promote generic medication. We implement a regression discontinuity in time framework and an event study to quarterly administrative data for individuals with chronic kidney disease linked to data from their general practitioners in Emilia Romagna, Italy. The results indicate that the policies were effective, but had modest effects on increasing the prescription of generic medications. Hard laws seem to have played a key role in driving this change. Heterogeneity checks provide evidence that less competition among GPs and interaction with specialists increased generic medication prescriptions.