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Are Physicians' Prescribing Decisions Sensitive to Drug Prices? Evidence from a Free‐antibiotics Program
Author(s) -
Li Shanjun,
Laxminarayan Ramanan
Publication year - 2015
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.3008
Subject(s) - antibiotics , medical prescription , context (archaeology) , affect (linguistics) , business , drug , variety (cybernetics) , medicine , psychology , pharmacology , computer science , paleontology , communication , artificial intelligence , microbiology and biotechnology , biology
This paper investigates whether patient‐level factors, in particular cost considerations, affect the physicians' prescribing decisions. In the context of a natural experiment, we examine the effect of the first US commercial free‐antibiotics program on retail antibiotic sales. We find an overall increase in antibiotic prescriptions under the program and substitutions to covered antibiotics from not‐covered antibiotics. The shift away from not‐covered antibiotics, particularly from those without covered equivalents, indicates a change in the physicians' prescribing decisions. We locate stronger program effects in low‐income areas. Our findings, robust to a variety of specifications, are in contrast with previous literature. Copyright © 2013 John Wiley & Sons, Ltd.