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Subsidizing Access to Prescription Drugs and Health Outcomes: The Case of Diabetes

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  • Pedro Américo
  • Rudi Rocha
Abstract
This paper evaluates the health effects of a large-scale subsidizing program of prescription drugs introduced in Brazil, the Aqui Tem Farmácia Popular program (ATFP). We exploit features of the program to identify its effects on mortality and hospitalization rates by diabetes for individuals aged 40 years or more. We find weak evidence for a decline in mortality, but a robust reduction in hospitalization rates. According to our preferred specification, an additional ATFP pharmacy per 100,000 inhabitants is associated with a decrease in hospitalization rates by diabetes of 8.2, which corresponds to 3.6% of its baseline rate. Effects are larger for Type II diabetes in comparison to Type I, and among patients with relatively lower socioeconomic status. Overall, the results are consistent with insulin-dependent patients being relatively less responsive to subsidies because of higher immediate life-threatening risks; and with lower-SES individuals being more responsive because of liquidity constraints. These results support the view that the optimal design of health systems and cost-sharing mechanisms should take into account equity concerns, heterogeneous impacts by health condition, and their potential offsetting effects on the utilization of downstream health services.
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Suggested Citation

  • Pedro Américo & Rudi Rocha, 2020. "Subsidizing Access to Prescription Drugs and Health Outcomes: The Case of Diabetes," Working Papers 05, Instituto de Estudos para Políticas de Saúde.
    • Handle: RePEc:amc:wpaper:05
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    References listed on IDEAS

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    Cited by:

    1. Aaron Barkley, 2023. "The Human Cost of Collusion: Health Effects of a Mexican Insulin Cartel," Journal of the European Economic Association, European Economic Association, vol. 21(5), pages 1865-1904.
    2. Clarke, Damian & Rocha, Rudi & Szklo, Michel, 2024. "Does Increasing Public Spending in Health Improve Health? Lessons from a Constitutional Reform in Brazil," Research Department working papers 2300, CAF Development Bank Of Latinamerica.
    3. Fernández Guerrico, Sofía, 2021. "The effects of trade-induced worker displacement on health and mortality in Mexico," Journal of Health Economics, Elsevier, vol. 80(C).
    4. Stefan Sliwa Ruiz & Malte Becker & Thomas Hone & Rudi Rocha, 2023. "Doctor Turnover and Health Outcomes: Evidence from the Exit of Cuban Doctors in Brazil," Working Papers 18, Instituto de Estudos para Políticas de Saúde.
    5. Cici McNamara & Natalia Serna, 2022. "The impact of a national formulary expansion on diabetics," Health Economics, John Wiley & Sons, Ltd., vol. 31(11), pages 2311-2332, November.

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    More about this item

    Keywords

    subsidies; prescription drugs; diabetes; hospital admissions; mortality;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

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