Drug Budgets and Effects on Physicians' Prescription Behaviour: New Evidence from Germany

Journal of Pharmaceutical Finance, Economics and Policy, Vol. 14, No. 3, pp. 77-95, 2005

Posted: 30 Mar 2010 Last revised: 20 Aug 2010

See all articles by Jonas Schreyoegg

Jonas Schreyoegg

University of Hamburg - Faculty of Economics and Business Administration

Reinhard Busse

Technische Universität Berlin (TU Berlin)

Date Written: 2005

Abstract

Since their introduction in 1993, the structure of physician drug budgets in Germany has changed frequently. Although highly disputed, they have limited the pharmaceutical expenditure of the Statutory Health Insurance Scheme for nearly one decade. This raises the question of how these savings have been achieved. It is assumed that under budget constraints physicians aim to eliminate drug therapies with low or disputed effectiveness, and substitute existing drug therapies with cheaper generic therapies. Therefore, data for the prescription behavior of physicians are analyzed from the last ten years.

Since the introduction of drug budgets, physicians have steadily reduced the number of prescriptions for drugs with disputed effectiveness, while prescriptions for drugs with undisputed effectiveness remained at a constant level. It can be projected that the number of prescribed drugs with disputed effectiveness will be zero by 2007 or 2008. From 1992 to 2000 expenditure for drugs with disputed effectiveness charged to the Statutory Health Insurance Scheme was reduced by € 3.0 billion. Furthermore, the market share of prescriptions as a percentage of the total pharmaceutical market and the turnover of generics as a percentage of the total market has steadily increased over the last ten years. The increased prescription of generics has generated savings of € 2.7 billion in the year 2002. It is concluded that drugs budgets have induced a change in prescription behavior, which has possibly led to improved drug therapy effectiveness.

Keywords: Drug budgets, prescription behavior, spending caps, effectiveness

Suggested Citation

Schreyoegg, Jonas and Busse, Reinhard, Drug Budgets and Effects on Physicians' Prescription Behaviour: New Evidence from Germany (2005). Journal of Pharmaceutical Finance, Economics and Policy, Vol. 14, No. 3, pp. 77-95, 2005. Available at SSRN: https://ssrn.com/abstract=1574177

Jonas Schreyoegg (Contact Author)

University of Hamburg - Faculty of Economics and Business Administration ( email )

Von-Melle-Park 5
Hamburg, 20146
Germany

Reinhard Busse

Technische Universität Berlin (TU Berlin) ( email )

Straße des 17
Juni 135
Berlin, 10623
Germany

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