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Free prescriptions for low‐income pensioners? The cost of returning to free‐of‐charge drugs in the Spanish National Health Service


  • Jaume Puig‐Junoy
  • Jaime Pinilla


This study estimated the impact of reducing a capped low coinsurance rate for outpatient medicines to nil for low‐income pensioners and disabled individuals in the Valencian Community (Spain). This reduction was implemented in January 2016 as a regional reform which modified the national cost‐sharing reform adopted in July 2012. The impact of this intervention on the number of monthly prescriptions dispensed between July 2012 and December 2018 was estimated using two different approaches of the synthetic control method, the classical method and the method based on Bayesian structural time series. The estimates from both methods were similar, showing significant overall increases of 6.34% and 6.70% [95% credible interval: 4.05, 9.47], respectively in the number of prescriptions dispensed in this region. These results are similar to those of the previous studies indicating that reducing price from a small amount to zero discontinuously boosts demand. This evidence indicates that the impact of this intervention on the budget of the regional health service is far greater than the amount of the subsidy in the public budget. These results are useful for making accurate budgetary projections for similar eliminations of charges for low‐income pensioners in the Spanish National Health Service.

Suggested Citation

  • Jaume Puig‐Junoy & Jaime Pinilla, 2020. "Free prescriptions for low‐income pensioners? The cost of returning to free‐of‐charge drugs in the Spanish National Health Service," Health Economics, John Wiley & Sons, Ltd., vol. 29(12), pages 1804-1812, December.
  • Handle: RePEc:wly:hlthec:v:29:y:2020:i:12:p:1804-1812
    DOI: 10.1002/hec.4161

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    References listed on IDEAS

    1. Toshiaki Iizuka & Hitoshi Shigeoka, 2018. "Free for Children? Patient Cost-sharing and Healthcare Utilization," NBER Working Papers 25306, National Bureau of Economic Research, Inc.
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    8. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    9. Rieger, Matthias & Wagner, Natascha & Mebratie, Anagaw & Alemu, Getnet & Bedi, Arjun, 2019. "The impact of the Ethiopian health extension program and health development army on maternal mortality: A synthetic control approach," Social Science & Medicine, Elsevier, vol. 232(C), pages 374-381.
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    12. Cristina Hernández-Izquierdo & Beatriz González López-Valcárcel & Stephen Morris & Mariya Melnychuk & Ignacio Abásolo Alessón, 2019. "The effect of a change in co-payment on prescription drug demand in a National Health System: The case of 15 drug families by price elasticity of demand," PLOS ONE, Public Library of Science, vol. 14(3), pages 1-39, March.
    13. Pilar García-Gómez & Toni Mora & Jaume Puig-Junoy, 2018. "Does €1 Per Prescription Make a Difference? Impact of a Capped Low-Intensity Pharmaceutical Co-Payment," Applied Health Economics and Health Policy, Springer, vol. 16(3), pages 407-414, June.
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    Blog mentions

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    1. Chris Sampson’s journal round-up for 7th December 2020
      by Chris Sampson in The Academic Health Economists' Blog on 2020-12-07 12:00:03

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