Findings from Heinrich-Heine-University Yields New Findings on Healthcare Economics (Tiered co-payments, pricing, and demand in reference price…

Findings from Heinrich-Heine-University Yields New Findings on Healthcare Economics (Tiered co-payments, pricing, and demand in reference price markets for pharmaceuticals)

By a News Reporter-Staff News Editor at Health & Medicine Week -- Research findings on Health and Medicine - Healthcare Economics are discussed in a new report. According to news reporting out of Dusseldorf, Germany, by NewsRx editors, research stated, "Health insurance companies curb price-insensitive behavior and the moral hazard of insureds by means of cost-sharing, such as tiered co-payments or reference pricing in drug markets. This paper evaluates the effect of price limits-below which drugs are exempt from co-payments-on prices and on demand."

Our news journalists obtained a quote from the research from Heinrich-Heine-University, "First, using a difference-in-differences estimation strategy, we find that the new policy decreases prices by 5 percent for generics and increases prices by 4 percent for brand-name drugs in the German reference price market. Second, estimating a nested-logit demand model, we show that consumers appreciate co-payment exempt drugs and calculate lower price elasticities for brand-name drugs than for generics."

According to the news editors, the research concluded: "This explains the different price responses of brand-name and generic drugs and shows that price-related co-payment tiers are an effective tool to steer demand to low-priced drugs."

For more information on this research see: Tiered co-payments, pricing, and demand in reference price markets for pharmaceuticals. Journal of Health Economics, 2017;56():19-29. Journal of Health Economics can be contacted at: Elsevier Science Bv, PO Box 211, 1000 Ae Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Journal of Health Economics - www.journals.elsevier.com/journal-of-health-economics/)

Our news journalists report that additional information may be obtained by contacting A. Herr, Heinrich Heine Univ, DICE, Dusseldorf, Germany (see also Health and Medicine - Healthcare Economics).

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.jhealeco.2017.08.008. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

Keywords for this news article include: Dusseldorf, Germany, Europe, Healthcare Economics, Health and Medicine, Heinrich-Heine-University.

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