What Explains Generosity in the Public Financing of High-Tech Drugs? An Empirical Investigation for 25 OECD Countries and 11 Controversial Drugs

Katharina Böhm (), Claudia Landwehr () and Nils Steiner ()
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Katharina Böhm: Johannes Gutenberg University Mainz
Claudia Landwehr: Johannes Gutenberg University Mainz
Nils Steiner: Johannes Gutenberg University Mainz

No 1708, Working Papers from Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz

Abstract: In times of increasing cost pressures public health care systems in the OECD countries face the question whether and to which extent new high-tech drugs are to be financed within their public health care systems. Systematic empirical research that tries to explain across-country variation in these coverage decisions is, however, almost non-existent. We analyze an original dataset that contains coverage decisions for 11 controversial drugs in 25 OECD countries via multilevel modeling. Our results indicate that regulations to what extent a pharmaceutical is publicly financed are unrelated to wealth and general expenditure levels for health care, while societal health care systems tend to be more generous. By taking into account that rationing decisions have been (at least partially) delegated to specialized agencies in all of the countries under investigation, we also uncover suggestive evidence that institutional characteristics of the underlying decision processes matter systematically for coverage decisions.

Keywords: Delegation; independent regulatory agencies; health care; priority setting; multilevel analysis (search for similar items in EconPapers)
Pages: 26 pages
Date: 2017
New Economics Papers: this item is included in nep-eur and nep-hea
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