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Ageing, health status and coverage rate effects on community prescription costs in Ireland

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  • Martin Kenneally

    () (University College Cork)

  • Brenda Lynch

    () (University College Cork)

Abstract

Aims and objectives This paper aims to explore how GMS drug costs depend on age, gender, income, health status, community drug scheme coverage rates and whether they display significant differences across regions of Ireland. We also aim to find out whether the GMS drug costs of high and low income cohorts respond similarly to changes in their health status. The paper projects GMS drug costs in 2026 and examines the separate cost of population ageing and population growth over the period. We also aim to simulate the estimated model to show how much giving free prescription drugs to all persons aged ‘under 5’ would add to 2026 GMS drug costs, and also how much giving universal GMS coverage to all persons in 2026 would add to 2026 GMS drug costs. Methods We construct a multivariate logistic regression model of GMS community drug costs in Ireland. We progress the methodology used in earlier studies by explicitly modelling how regional incomes and regional health status interact in determining GMS drug costs in Ireland. An age cohort and region breakdown of the simulated GMS drug costs, of both projected demographic trends and public policy measures that have been adopted or are under consideration, are also investigated. Findings We find that GMS drug costs depend on age—but not gender—on income, health status, community drug scheme coverage rates, and they are significantly lower for all age cohorts in Donegal and the North West region. The GMS drug costs of high income cohorts tend to increase as their health status improves, whereas they tend to decrease as the health status of low income cohorts improves. A uniform 1% gain in health status has little impact on total GMS prescribing costs. Similarly, if the health status of all Irish regions improved to match that of the East region in 2010 it would only have reduced public prescription costs by around 32 € million of the 1.8 € billion GMS drugs bill. We find that giving free prescription drugs to all persons aged ‘under 5’ in 2010 would have only a minor impact on 2010 GMS drug costs, whereas giving universal GMS coverage to all persons would have doubled public prescription costs from 1.8 € billion to circa 3.6 € billion.

Suggested Citation

  • Martin Kenneally & Brenda Lynch, 2018. "Ageing, health status and coverage rate effects on community prescription costs in Ireland," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(5), pages 687-695, June.
  • Handle: RePEc:spr:eujhec:v:19:y:2018:i:5:d:10.1007_s10198-017-0913-7
    DOI: 10.1007/s10198-017-0913-7
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    References listed on IDEAS

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    1. Puig-Junoy, Jaume, 2004. "Incentives and pharmaceutical reimbursement reforms in Spain," Health Policy, Elsevier, vol. 67(2), pages 149-165, February.
    2. Layte, Richard & Barry, Michael & Bennett, Kathleen & Brick, Aoife & Morgenroth, Edgar & Normand, Charles & O'Reilly, Jacqueline & Thomas, Stephen & Tilson, Leslie & Wiley, Miriam M. & Wren, Maev-Ann, 2009. "Projecting the Impact of Demographic Change on the Demand for and Delivery of Healthcare in Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS13, January.
    3. Lesley Tilson & Kathleen Bennett & Michael Barry, 2005. "The potential impact of implementing a system of generic substitution on the community drug schemes in Ireland," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 6(3), pages 267-273, September.
    4. Judith K. Hellerstein, 1998. "The Importance of the Physician in the Generic Versus Trade-Name Prescription Decision," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 108-136, Spring.
    5. Gorecki, Paul K. & Nolan, Anne & Brick, Aoife & Lyons, Seán, 2012. "Pharmaceuticals Delivery in Ireland. Getting a Bigger Bang for the Buck," Research Series, Economic and Social Research Institute (ESRI), number RS24, January.
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    More about this item

    Keywords

    Public drug costs; Ireland; Demographics; Health status; Coverage rates; Public policy;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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