Are Physicians’ Prescribing Decisions Sensitive to Drug Prices? Evidence from a Free-Antibiotics Program
43 Pages Posted: 1 May 2010 Last revised: 7 Nov 2013
Date Written: May 1, 2010
This paper investigates whether patient-level factors, in particular cost considerations, affect physicians’ prescribing decisions. In the context of a natural experiment, we examine the effect of the first U.S. commercial free-antibiotics program on retail antibiotic sales using the difference-in-differences method. We find an overall increase in antibiotic prescriptions under the program as well as substitutions to covered antibiotics from not-covered antibiotics. The shift away from not-covered antibiotics, particularly from those that do not have covered equivalents indicates a change in 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.
Keywords: Antibiotics, Drug Resistance, Difference-in-Differences, Prescribing Decisions
JEL Classification: I10, L80
Suggested Citation: Suggested Citation