Generic utilization and cost-sharing for prescription drugs.
OBJECTIVE
The purpose of this study is to estimate the own- and cross-price elasticity of brand-name outpatient prescription drug cost-sharing for maintenance medications and to estimate the effects of changes in the price differential between generic and brand-name prescription drugs.


METHODS
We first review the literature on the effects of an increase in brand-name drug patient cost-sharing. In addition, we analyze two examples of utilization patterns in filling behavior associated with an increase in brand-name cost-sharing for patients in employer-sponsored health plans with chronic illness.


RESULTS
We found that the own-price elasticity of demand for brand-name prescription drugs was inelastic. However, the cross-price elasticity was not consistent in sign, and utilization patterns for generic prescription fills did not always increase after a rise in brand-name cost-sharing.


CONCLUSIONS
The empirical examples are limited to the experience of patients with employer-sponsored health insurance.


CONCLUSIONS
The common practice of increasing brand-name prescription drug patient cost-sharing to increase consumption of generic drugs may not always result in higher generic medication use. Higher brand-name drug cost-sharing levels may result in discontinuation of chronic therapies, instead of therapeutic switching.


CONCLUSIONS
The value of this chapter is its singular focus on the effects of higher brand-name drug cost-sharing through a synthesis of the literature examining the own- and cross-price elasticity of demand for brand-name medications and two empirical examples of the effects of changes in brand-name cost-sharing.
Gibson
Teresa Bernard
TB
Thomson-Reuters, Ann Arbor, MI, USA.
McLaughlin
Catherine G
CG
Smith
Dean G
DG
D017047:Cost Sharing; D019992:Databases as Topic; D003924:Diabetes Mellitus, Type 2 / Q000188:drug therapy; D016527:Drug Costs / Q000706:statistics & numerical data; D016568:Drugs, Generic / Q000627:therapeutic use*; D005260:Female; D006801:Humans; D007004:Hypoglycemic Agents / Q000191:economics; D008297:Male; D008875:Middle Aged; D012196:Review Literature as Topic; D014481:United States
D016568:Drugs, Generic; D007004:Hypoglycemic Agents