The Impact of Over-the-Counter Switches on the Product Life Cycles of 15 Pharmaceutical Products in Sweden

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Abstract
During the period 1972–1990, 15 over-the-counter switches (an OTC switch means that a pharmaceutical product becomes available without a prescription) occurred in Sweden. The effects of these switches on sales are analyzed on the basis of quarterly data using different time series techniques. The theoretical basis for the study is the product life cycle theory. The time series models considered are deterministic trend models with and without adjustment for autocorrelation in the residuals and intervention models based on the Box-Jenkins methodology. We find clear effects on sales of the switch in more than half of the cases analyzed. In several cases, the effect is doubtful, and there are cases where the switch did not seem to influence sales at all. In general, the results are robust with respect to the analytic method used, but there are also cases where the opposite is true.

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