Heterogeneity in Cost-Sharing and Cost-Sensitivity, and the Role of the Prescribing Physician

60 Pages Posted: 29 Jun 2013

See all articles by Mariana Carrera

Mariana Carrera

Case Western Reserve University

Dana Goldman

University of Southern California - Schaeffer Center for Health Policy and Economics

Dana P. Goldman

RAND Corporation; National Bureau of Economic Research (NBER)

Geoffrey Joyce

University of Southern California

Date Written: June 2013

Abstract

In this paper, we use individual level data on purchases of one of the most prescribed categories of drugs (cholesterol-lowering statins) to study the responses of physicians and patients to variation in the cost of drugs. In a sample of first-time statin prescriptions to employees from a group of Fortune 500 firms, we find that copay variation across plans has a relatively small effect on the choice of drug, and this effect does not vary with patient income. After the highly-publicized expiration of the patent for Zocor (simvastatin), however, prescriptions for this drug increased substantially, especially for lower-income patients. Our analysis suggests that physicians can perceive the adherence elasticity of their patients and adjust their initial prescriptions accordingly, but only in response to a large and universal price change. Using prescriber identifiers, we present suggestive evidence that physicians learn about a patient's price sensitivity through their own experience of prescribing to that patient.

Suggested Citation

Carrera, Mariana and Goldman, Dana and Goldman, Dana P. and Joyce, Geoffrey, Heterogeneity in Cost-Sharing and Cost-Sensitivity, and the Role of the Prescribing Physician (June 2013). NBER Working Paper No. w19186. Available at SSRN: https://ssrn.com/abstract=2287045

Mariana Carrera (Contact Author)

Case Western Reserve University ( email )

Dana Goldman

University of Southern California - Schaeffer Center for Health Policy and Economics ( email )

635 Downey Way
Los Angeles, CA 90089-3333
United States

Dana P. Goldman

RAND Corporation ( email )

P.O. Box 2138
Santa Monica, CA 90407-2138
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Geoffrey Joyce

University of Southern California ( email )

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