Health Care Management Papers
Document Type
Journal Article
Date of this Version
3-2010
Publication Source
American Economic Review
Volume
100
Issue
1
Start Page
590
Last Page
607
DOI
10.1257/aer.100.1.590
Abstract
Medicare Part D began coverage of prescription drugs in 2006. Rather than setting pharmaceutical prices, the government contracted with private insurers to provide drug coverage. Theory suggests that additional insured consumers will raise the optimal price of a branded drug, while the insurer's ability to move demand to substitute treatments may lower prices. We estimate the program's effect on the price and utilization of pharmaceutical treatments. We find that Part D enrollees paid substantially lower prices than while uninsured, and increased their utilization of prescription drugs. We find relative price declines only for drugs with significant therapeutic competition.
Recommended Citation
Duggan, M., & morton, F. S. (2010). The Effect of Medicare Part D on Pharmaceutical Prices and Utilization. American Economic Review, 100 (1), 590-607. http://dx.doi.org/10.1257/aer.100.1.590
Date Posted: 27 November 2017
This document has been peer reviewed.