Differential own-price elasticity of demand for prescription drugs by clinical value

Understanding how pharmaceutical demand responds to price changes is fundamental for health policy decisions. This study examines whether price elasticity of demand for prescription drugs varies with clinical value. Analyzing 29 single-source medications included in China's National Reimbursement Drug List (2017–2019) through centralized negotiations, we categorized drugs as high-value or low-value based on incremental quality-adjusted life years. Using fixed-effects regression models with standardized price and sales volume data from approximately 3000 hospitals, we estimated price elasticity and reimbursement inclusion semi-elasticity stratified by value category. Low-value drugs exhibited substantially higher price elasticity (−0.54; 95 % CI, −0.76 to −0.32) compared to high-value drugs (−0.01; 95 % CI, −0.03 to 0.004). Despite similar price reductions (approximately 55 %) following reimbursement inclusion, low-value drugs experienced significantly greater volume increases (38.83 %; 95 % CI, 10.94 %–66.71 %) than high-value drugs (−2.44 %; 95 % CI, −35.73 %–30.85 %; p = 0.016). The results provide novel empirical evidence that price elasticity of demand for prescription drugs varies systematically with clinical value, with high-value drugs exhibiting relatively inelastic demand. The findings provide empirical support for value-based approaches to prescription access policy, but also suggest that centralized procurement mechanisms premised on volume-price trade-offs should factor in the inelastic demand of high-value drugs.