This research was supported in part by a Post-doctoral Fellowship from the Canadian Institutes of Health Research. Data access was arranged through the Centre for Health Services and Policy Research, UBC, with permission of the British Columbia Ministry of Health and Ministry Responsible for Seniors.
Quantifying Components of Drug Expenditure Inflation: The British Columbia Seniors' Drug Benefit Plan
Article first published online: 19 NOV 2002
Health Services Research
Volume 37, Issue 5, pages 1243–1266, October 2002
How to Cite
Morgan, S. G. (2002), Quantifying Components of Drug Expenditure Inflation: The British Columbia Seniors' Drug Benefit Plan. Health Services Research, 37: 1243–1266. doi: 10.1111/1475-6773.01058
I am indebted to the editors, two anonymous referees, and professors Morris Barer and Robert Evans for their comments on an earlier draft. All remaining errors and omissions are my own.
- Issue published online: 19 NOV 2002
- Article first published online: 19 NOV 2002
- Prescription drugs;
Objective. To quantify the relative and absolute importance of different factors contributing to increases in per capita prescription drug costs for a population of Canadian seniors.
Data Sources/Study Setting. Data consist of every prescription claim from 1985 to 1999 for the British Columbia Pharmacare Plan A, a tax-financed public drug plan covering all community-dwelling British Columbians aged 65 and older.
Study Design. Changes in per capita prescription drug expenditures are attributed to changes to four components of expenditure inflation: (1) the pattern of exposure to drugs across therapeutic categories; (2) the mix of drugs used within therapeutic categories; (3) the rate of generic drug product selection; and (4) the prices of unchanged products.
Data Collection/Extraction Methods. Data were extracted from administrative claims files housed at the UBC Centre for Health Services and Policy Research.
Principal Findings. Changes in drug prices, the pattern of exposure to drugs across therapeutic categories, and the mix of drugs used within therapeutic categories all caused spending per capita to increase. Incentives for generic substitution and therapeutic reference pricing policies temporarily slowed the cost-increasing influence of changes in product selection by encouraging the use of generic drug products and/or cost-effective brand-name products within therapeutic categories.
Conclusions. The results suggest that drug plans (and patients) would benefit from more concerted efforts to evaluate the relative cost-effectiveness of competing products within therapeutic categories of drugs.