Are physicians' prescribing decisions sensitive to drug prices? Evidence from a free-antibiotics program

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Abstract

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.

Original languageEnglish (US)
Pages (from-to)158-174
Number of pages17
JournalHealth Economics (United Kingdom)
Volume24
Issue number2
DOIs
StatePublished - Feb 1 2015

All Science Journal Classification (ASJC) codes

  • Health Policy

Keywords

  • Antibiotics
  • Natural experiment
  • Prescribing decisions

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