Do Physicians Respond to the Costs and Cost-Sensitivity of Their Patients?

Mariana Carrera, Dana Goldman, Geoffrey Joyce () and Neeraj Sood

American Economic Journal: Economic Policy, 2018, vol. 10, issue 1, 113-52

Abstract: We use individual level data on purchases of cholesterol-lowering drugs 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 12 Fortune 500 firms, we find that co-pay variation across plans has a small effect on the choice of drug, and this effect does not vary with patient income. After the highly publicized patent expiration of Zocor, however, prescriptions for this drug increased substantially, especially for lower income patients. Our analysis suggests that physicians can perceive the price sensitivity of their patients and adjust their initial prescriptions accordingly, but only in response to a large and universal price change.

JEL-codes: D14 G22 I11 I13 L65 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/pol.20150523
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Citations: View citations in EconPapers (21)

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