On the demand for prescription drugs: heterogeneity in price responses.
This paper estimates the price elasticity of demand for prescription drugs using an exogenous shift in consumer co-payment caused by a reform in the Danish subsidy scheme for the general public. Using purchasing records for the entire Danish population, I show that the average price response for the most commonly used drug yields demand elasticities in the range of -0.36 to -0.5. The reform is shown to affect women, the elderly, and immigrants the most. Furthermore, this paper shows significant heterogeneity in the price response over different types of antibiotics, suggesting that the price elasticity of demand varies considerably even across relatively similar drugs.
Department of Economics and Business, Aarhus University, Aarhus, Denmark. nskipper@econ.au.dk
Niels
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Skipper
D000328:Adult; D000368:Aged; D000900:Anti-Bacterial Agents / Q000191:economics / Q000627:therapeutic use; D003669:Deductibles and Coinsurance / Q000191:economics / Q000706:statistics & numerical data; D003718:Denmark / Q000453:epidemiology; D004009:Dicloxacillin / Q000191:economics / Q000627:therapeutic use; D016527:Drug Costs / Q000706:statistics & numerical data*; D054242:Emigrants and Immigrants / Q000706:statistics & numerical data; D005260:Female; D006301:Health Services Needs and Demand / Q000191:economics / Q000706:statistics & numerical data; D006801:Humans; D007348:Insurance, Health / Q000191:economics / Q000706:statistics & numerical data; D008297:Male; D008875:Middle Aged; D010406:Penicillins / Q000191:economics / Q000627:therapeutic use; D055553:Prescription Drugs / Q000191:economics* / Q000627:therapeutic use
D000900:Anti-Bacterial Agents; D010406:Penicillins; D055553:Prescription Drugs; D004009:Dicloxacillin