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Prescription Drug charges impact efficiency and equity: a collection of international perspectives

A recent UK review article entitled, "What impact do prescription drug charges have on efficiency and equity? Evidence from high-income countries" (1) reviews the literature
(173 articles from 15 countries) on user charges for prescription charges in high-income countries with a view to assessing their impact on efficiency and equity. Almost all of the studies reviewed concluded that prescription charges reduce the use of prescription drugs, but they also show that most patients are not particularly sensitive to changes in the out-of-pocket price of prescription drugs; the economic effect is that the demand for prescription drugs is price inelastic.
One of many issues discussed: The authors observe that most studies conclude that user charges reduce the use of prescription drugs and so enhance allocative efficiency as defined by standard welfare economics. However, the authors posit that in assessing the impact of prescription drug charges on efficiency, an interpretation of efficiency more commonly used to evaluate policy is one that focuses on improving health through the provision of effective health care. From this perspective they propose that the cost,health, and distributional consequences of prescription drug charges can be seen to lower efficiency.
They examine various policy implications/options. They provide critiques of the studies they reviewed, also noting what areas have not yet been studied.
The authors also provide tables which incorporate information from the studies, showing the impact of prescription drug charges;
-on the volume of prescriptions obtained,
-on the probability of obtaining a prescription,
-on the use of generic or reference-price drugs,
-on the demand for other health services,
-on patients' out of pocket expenditures.

(1) http://www.equityhealthj.com/content/pdf/1475-9276-7-12.pdf , from Biomed Central (http://www.biomedcentral.com/) a peer reviewed article of The International Journal for Equity in Health 2008, Marin C. Gemmill, Sarah Thomson, Elias Mossialos,all of London School of Economics and Political Science, London, UK , acknowledged support of an educational grant from the Merck Company Foundation program on Pharmaceutical Policy Issues. 19 pp followed by references and tables.Countries include Australia, Belgium, Canada, Denmark, France, Germany, Italy, Netherlands, New Zealand, Spain, Sweden, UK, US.

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