In search of a corrected prescription drug elasticity estimate: a meta-regression approach

Health Econ. 2007 Jun;16(6):627-43. doi: 10.1002/hec.1190.

Abstract

An understanding of the relationship between cost sharing and drug consumption depends on consistent and unbiased price elasticity estimates. However, there is wide heterogeneity among studies, which constrains the applicability of elasticity estimates for empirical purposes and policy simulation. This paper attempts to provide a corrected measure of the drug price elasticity by employing meta-regression analysis (MRA). The results indicate that the elasticity estimates are significantly different from zero, and the corrected elasticity is -0.209 when the results are made robust to heteroskedasticity and clustering of observations. Elasticity values are higher when the study was published in an economic journal, when the study employed a greater number of observations, and when the study used aggregate data. Elasticity estimates are lower when the institutional setting was a tax-based health insurance system.

Publication types

  • Research Support, Non-U.S. Gov't

MeSH terms

  • Cost Sharing*
  • Drug Costs / statistics & numerical data
  • Drug Costs / trends
  • Drug Therapy / economics*
  • Drug Therapy / statistics & numerical data*
  • Fees, Pharmaceutical / statistics & numerical data*
  • Fees, Pharmaceutical / trends
  • Health Services Needs and Demand / economics*
  • Health Services Needs and Demand / statistics & numerical data
  • Humans
  • Insurance, Pharmaceutical Services / economics*
  • Insurance, Pharmaceutical Services / trends
  • Meta-Analysis as Topic
  • Models, Econometric*
  • Regression Analysis