Abstract
While most countries separate drug prescription and dispensation to ensure independent drug choice, some allow this combination to increase pharmaceutical access in rural areas or to increase the utilization of pharmacist skills. A drawback of this approach is that dispensing physicians or prescribing pharmacists may be incentivized to increase their own profits through the prescription of cost-inefficient drug packages, leading to an increase in pharmaceutical spending. Switzerland constitutes an interesting example of where dispensing and non-dispensing physicians coexist, permitting a comparison of their prescribing behavior. The present study shows that drug margin optimization is possible under the current drug price regulation scheme in Switzerland. Using drug claims data, empirical findings indicate a 5–10 % higher margin per dose for dispensing physicians compared to pharmacists. Cost per dose is 3–5 % higher when dispensed by physicians instead of pharmacists.
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Notes
This is not the case in some countries, where drugs are sold by patient-specific package sizes containing the exact number of pills needed.
The corner solution for the illustrative example given in the next subsection is represented by the package containing seven pills (see Fig. 2).
The logistic drug margin is calculated neglecting value added taxes.
N i cancels out of the equation because prescriptions of different packages at the same time are treated as separate observations.
Again, additional fees and taxes that are either small or do not differ between combined and separated providers are neglected.
ATC-codes: omeprazole (A02BC01), amlodipine (C08CA01), ciproflocaxin (J01MA02).
For more information, see http://www.drugbank.ca/drugs.
Mean MPD (in CHF per 1,000 mg) for physicians versus pharmacies: 40.0 versus 37.6 (omeprazole), 53.1 versus 52.1 (amlodipine), and 4.1 versus 3.9 (ciprofloxacin).
Mean CPD (in CHF per 1,000 mg) for physicians versus pharmacies: 101.1 versus 101.7 (omeprazole), 155.8 versus 158.5 (amlodipine), and 9.0 versus 8.8 (ciprofloxacin).
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Acknowledgments
This study was partly written during my visiting scholarship at the University of California at Berkeley. I would like to gratefully acknowledge the financial support provided by the Swiss National Science Foundation and thank Professor Richard Scheffler from the Nicholas C. Petris Center for Health Care Markets and Consumer Welfare, and the Global Center for Health Economics and Policy Research. In addition, thanks are directed to Harald Telser, Maria Trottmann, and Philippe Widmer for their helpful comments and critiques.
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Rischatsch, M. Lead me not into temptation: drug price regulation and dispensing physicians in Switzerland. Eur J Health Econ 15, 697–708 (2014). https://doi.org/10.1007/s10198-013-0515-y
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DOI: https://doi.org/10.1007/s10198-013-0515-y