Article

Consumer Demand and Health Effects of Cost-Sharing

Dana P. Goldman and Geoffrey F. Joyce

in The Oxford Handbook of the Economics of the Biopharmaceutical Industry

Published in print April 2012 | ISBN: 9780199742998
Published online September 2012 | | DOI: http://dx.doi.org/10.1093/oxfordhb/9780199742998.013.0012

Series: Oxford Handbooks

 Consumer Demand and Health Effects of Cost-Sharing

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With recent increases in pharmacy spending, pharmacy benefit managers and health plans have adopted benefit changes designed to reduce pharmaceutical use or steer patients to less expensive alternatives. The rapid proliferation of mail-order pharmacies, mandatory generic substitution, co-insurance plans, and multitiered formularies have transformed the benefit landscape. This article focuses on how the salient cost-sharing features of prescription drug benefits may affect access to prescription drugs and what is known about how these features may affect medical spending and health outcomes. The evidence suggests that some patients, including the chronically ill, are very responsive to the cost-sharing arrangements in prescription drug plans. And for certain conditions, the evidence clearly indicates that more cost-sharing is associated with increased use of other medical services such as hospitalizations and emergency department visits. These findings make benefit design an important public health tool for improving population health.

Keywords: pharmacy spending; cost-sharing; prescription drug benefits; benefit design

Article.  13618 words. 

Subjects: Economics ; Health, Education, and Welfare ; Financial Institutions and Services

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