This seminar will take place on May 17 at 15:30. The seminar will be in a hybrid format with:
- in-person session in the IST Alameda Campus, Department of Engineering and Management's Meeting Room
- online, via Zoom https://videoconf-colibri.zoom.us/j/93855993325?pwd=c1BkTkJOcWNQdnF3U0JWc2hvWTRFZz09
Our seminars are free to attend and open to everyone. Please share with whomever may be interested.
Summary
Out-of-pocket payments and reimbursement for prescribed drugs are shaped by patient choices, pricing mechanisms and pharmacies’ financing models. Since generic drugs are usually cheaper than equivalent branded drugs, the focus has been predominantly centered on fostering the adoption of the former, for instance through internal reference price systems. However, less attention has been drawn to the choice within generic drugs, since it was assumed that internal reference price systems would induce patients towards the cheapest generic drug. This paper argues that such predictions often ignore the role of pharmacies. Through a simple model we discuss potential pharmacy-related mechanisms that can affect the adoption of the cheapest generic drug. Moreover, drawing on empirical evidence from Portugal, the paper reveals that consumers do not invariably opt for the cheapest generic drug. In fact, contrary to theoretical predictions, patients’ uptake of the cheapest generic drug does not increase with higher prices for alternative drugs. Instead, pharmacies play a role on the drug sold to the patient. We find that higher pharmacy margins for alternative drugs, decreases the uptake of the cheapest generic drug. Overall, substantial savings on out-of-pocket payments can be achieved by providing incentives to the sale of the cheapest generic drug. This implies revisiting stock management policies, as well as considering alternative financing models for pharmacies.
Speaker's bio
Eduardo Costa is a tenure-track Assistant Professor in Economics at the Department of Engineering and Management of Instituto Superior Técnico (University of Lisbon) and a researcher at CEGIST. His research is focused on Health Economics, particularly in topics related with the sustainability and efficiency of public health spending, competition in the pharmaceutical market, and on the economic impact of health professionals. He is currently the president of the Portuguese Association for Health Economics. Additionally, he is also a member of the National Health Technology Assessment Commission and of the National NHS Reference Centers Commission. He is also adjunct faculty at Nova School of Business and Economics. He has significant consulting and research experience in national and international projects on health economics and policy. He holds a PhD in Economics from Nova School of Business and Economics, and was a visiting researcher at the Boston University and at the Harvard School of Public Health. He also worked as a research fellow at the Lancaster University.
Personal homepage: https://sites.google.com/view/costaeduardo/home