Ageing, health status and coverage rate effects on community prescription costs in Ireland

Martin Kenneally () and Brenda Lynch ()
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Martin Kenneally: University College Cork
Brenda Lynch: University College Cork

The European Journal of Health Economics, 2018, vol. 19, issue 5, No 6, 687-695

Abstract: Abstract Aims and objectives This paper aims to explore how GMS drug costs depend on age, gender, income, health status, community drug scheme coverage rates and whether they display significant differences across regions of Ireland. We also aim to find out whether the GMS drug costs of high and low income cohorts respond similarly to changes in their health status. The paper projects GMS drug costs in 2026 and examines the separate cost of population ageing and population growth over the period. We also aim to simulate the estimated model to show how much giving free prescription drugs to all persons aged ‘under 5’ would add to 2026 GMS drug costs, and also how much giving universal GMS coverage to all persons in 2026 would add to 2026 GMS drug costs. Methods We construct a multivariate logistic regression model of GMS community drug costs in Ireland. We progress the methodology used in earlier studies by explicitly modelling how regional incomes and regional health status interact in determining GMS drug costs in Ireland. An age cohort and region breakdown of the simulated GMS drug costs, of both projected demographic trends and public policy measures that have been adopted or are under consideration, are also investigated. Findings We find that GMS drug costs depend on age—but not gender—on income, health status, community drug scheme coverage rates, and they are significantly lower for all age cohorts in Donegal and the North West region. The GMS drug costs of high income cohorts tend to increase as their health status improves, whereas they tend to decrease as the health status of low income cohorts improves. A uniform 1% gain in health status has little impact on total GMS prescribing costs. Similarly, if the health status of all Irish regions improved to match that of the East region in 2010 it would only have reduced public prescription costs by around 32 € million of the 1.8 € billion GMS drugs bill. We find that giving free prescription drugs to all persons aged ‘under 5’ in 2010 would have only a minor impact on 2010 GMS drug costs, whereas giving universal GMS coverage to all persons would have doubled public prescription costs from 1.8 € billion to circa 3.6 € billion.

Keywords: Public drug costs; Ireland; Demographics; Health status; Coverage rates; Public policy (search for similar items in EconPapers)
JEL-codes: I18 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s10198-017-0913-7

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