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Distributional effects of ‘general population’ prescription drug programs in Canada

Author

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  • Sule Alan
  • Thomas F. Crossley
  • Paul Grootendorst
  • Michael R. Veall

Abstract

. Canadian household prescription drug expenditures are studied using the Statistics Canada Family Expenditure Survey masterfiles for periods that include the introduction of provincial ‘general population’ prescription drug programs. Budget shares for non‐senior households are examined over time using non‐parametric regression, parametric ‘difference‐in‐difference’ techniques, and quantile regression methods. The evidence suggests that while program effects are muted when there are high deductibles, a non‐senior prescription drug subsidy is more redistributive than an equal‐cost proportional income transfer, in part because of differential private health insurance coverage by income. This is in contrast to previous evidence on Canadian senior prescription drug subsidies. JEL classification: I18, J42 Les effects de redistribution des programmes d'assurance‐médicaments pour la population en général au Canada. Les auteurs étudient les dépenses des ménages canadiens pour les médicaments sur ordonnance à l'aide des données de l'Enquête sur les dépenses des familles pour des périodes qui couvrent les moments où on a mis en place des programmes provinciaux d'assurance‐médicaments pour la population en général. Les portions des budgets des ménages qui ne sont pas des ménages d'ainés sont analysées à l'aide de méthodes de régression non‐paramétrique, de techniques paramétriques de “différence dans les différences”, et de régression quantile. Les résultats suggérent que bien que les effects de ces programmes soient assourdis quand les montants déductibles à la base sont élevés, une subvention pour les médicaments sous ordonnance pour les non‐aînés a un effet de redistribution plus important qu'un transfert de revenu proportionnel d'un coût égal, en partie à cause des différences dans la couverture des régimes privés d'assurance‐santé selon les niveaux de revenus. Cela contraste avec les résultats d'études antérieures sur l'impact des assurance‐médicaments pour les aînés au Canada.

Suggested Citation

  • Sule Alan & Thomas F. Crossley & Paul Grootendorst & Michael R. Veall, 2005. "Distributional effects of ‘general population’ prescription drug programs in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(1), pages 128-148, February.
  • Handle: RePEc:wly:canjec:v:38:y:2005:i:1:p:128-148
    DOI: 10.1111/j.0008-4085.2005.00272.x
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    References listed on IDEAS

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    1. Robin Boadway, 1997. "Public Economics and the Theory of Public Policy," Canadian Journal of Economics, Canadian Economics Association, vol. 30(4), pages 753-772, November.
    2. Paul V. Grootendorst, 1997. "Health care policy evaluation using longitudinal insurance claims data: An application of the Panel Tobit estimator," Health Economics, John Wiley & Sons, Ltd., vol. 6(4), pages 365-382, July.
    3. Richard Blundell & Alan Duncan, 1998. "Kernel Regression in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 62-87.
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    5. Mark Stabile, 2001. "Private insurance subsidies and public health care markets: evidence from Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 34(4), pages 921-942, November.
    6. Leibowitz, Arleen & Manning, Willard G. & Newhouse, Joseph P., 1985. "The demand for prescription drugs as a function of cost-sharing," Social Science & Medicine, Elsevier, vol. 21(10), pages 1063-1069, January.
    7. Adonis Yatchew, 1998. "Nonparametric Regression Techniques in Economics," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 669-721, June.
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    Cited by:

    1. Mark Stabile & Sarah Thomson, 2014. "The Changing Role of Government in Financing Health Care: An International Perspective," Journal of Economic Literature, American Economic Association, vol. 52(2), pages 480-518, June.
    2. Wang, Chao & Li, Qing & Sweetman, Arthur & Hurley, Jeremiah, 2015. "Mandatory universal drug plan, access to health care and health: Evidence from Canada," Journal of Health Economics, Elsevier, vol. 44(C), pages 80-96.
    3. Sam Caldbick & Xiaojing Wu & Tom Lynch & Naser Al-Khatib & Mustafa Andkhoie & Marwa Farag, 2015. "The financial burden of out of pocket prescription drug expenses in Canada," International Journal of Health Economics and Management, Springer, vol. 15(3), pages 329-338, September.
    4. repec:spo:wpmain:info:hdl:2441/3ihldo33ik9ee94procjtfki5f is not listed on IDEAS
    5. Goldman, Matt & Kaplan, David M., 2017. "Fractional order statistic approximation for nonparametric conditional quantile inference," Journal of Econometrics, Elsevier, vol. 196(2), pages 331-346.
    6. repec:hal:spmain:info:hdl:2441/3ihldo33ik9ee94procjtfki5f is not listed on IDEAS
    7. SØren Leth‐Petersen & Niels Skipper, 2014. "Income And The Use Of Prescription Drugs For Near Retirement Individuals," Health Economics, John Wiley & Sons, Ltd., vol. 23(3), pages 314-331, March.
    8. Paul Grootendorst, 2012. "Prescription Drug Insurance and Reimbursement," Chapters, in: Andrew M. Jones (ed.), The Elgar Companion to Health Economics, Second Edition, chapter 11, Edward Elgar Publishing.
    9. Hai Zhong, 2007. "Equity in Pharmaceutical Utilization in Ontario: A Cross-Section and Over Time Analysis," Canadian Public Policy, University of Toronto Press, vol. 33(4), pages 487-508, December.

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    More about this item

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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