Typical Household Elasticity of Demand for Pharmaceuticals Across European States
DOI:
https://doi.org/10.18778/0208-6018.358.03Keywords:
health economics, out‑of‑pocket pharmaceutical expenditures, income elasticity of demand, price elasticity of demand, regional studiesAbstract
According to the World Health Organisation (WHO), almost a billion people worldwide are at risk of falling into poverty due to out‑of‑pocket health spending, and pharmaceuticals are an integral part of this growing problem. The presented study aims to assess the price and income elasticity of demand for pharmaceuticals across European states over the period 2009–2019. The subject of the analysis is a typical household in each state. The analysis focuses on evaluating interactions in the light of economic growth, thus the results are cross‑referenced with the countries’ development groups to pinpoint any similarities and contrasts within and between clusters. The results indicate that households in underprivileged regions have a higher responsiveness to economic stimuli than in prosperous states. Both the income and price elasticities indicate the existence of unmet need for pharmaceuticals due to insufficient financial resources. Moreover, households’ responsiveness to income and price changes varies across time, states and affluence development groups.
Downloads
References
Alghanim S.A. (2011), Self-medication practice among patients in a public health care system, “Eastern Mediterranean Health Journal”, vol. 17, no. 5, pp. 409–416.
Google Scholar
DOI: https://doi.org/10.26719/2011.17.5.409
Ben-Aharon O., Shavit O., Magnezi R. (2017), Does drug price-regulation affect healthcare expenditures?, “The European Journal of Health Economics”, vol. 18, pp. 859–867, https://doi.org/10.1007/s10198-016-0832-z
Google Scholar
DOI: https://doi.org/10.1007/s10198-016-0832-z
Besanko D., Braeutigam R. (2013), Microeconomics, John Wiley & Sons, Hoboken.
Google Scholar
Bhattacharya J., Hyde T., Tu P. (2013), Health Economics, Macmillan International Higher Education, New York.
Google Scholar
DOI: https://doi.org/10.1007/978-1-137-02997-3
Colorectal cancer burden in EU–27 (2021), European Cancer Information System, European Union, https://ecis.jrc.ec.europa.eu/pdf/Colorectal_cancer_factsheet-Mar_2021.pdf (accessed: 1.08.2021).
Google Scholar
Du J., Yang X., Chen M., Wang Z. (2019), Socioeconomic determinants of out-of-pocket pharmaceutical expenditure among middle-aged and elderly adults based on the China Health and Retirement Longitudinal Survey, “BMJ Open”, vol. 9, pp. 1–13, https://doi.org/10.1136/bmjopen-2018-024936
Google Scholar
DOI: https://doi.org/10.1136/bmjopen-2018-024936
Dunphy C., Peterson C., Zhang K., Jones C.M. (2021), Do out-of-pocket costs influence retention and adherence to medications for opioid use disorder?, “Drug and Alcohol Dependence”, vol. 225, pp. 1–5, https://doi.org/10.1016/j.drugalcdep.2021.108784
Google Scholar
DOI: https://doi.org/10.1016/j.drugalcdep.2021.108784
Dwivedi D.N. (2002), Microeconomics: Theory And Applications, Pearson Education India, Delhi.
Google Scholar
Eurostat (n.d.), Harmonised Indices of Consumer Prices (HICP) – FAQ, https://ec.europa.eu/eurostat/web/hicp/faq (accessed: 13.08.2021).
Google Scholar
Eurostat (n.d.), Health care expenditure, https://ec.europa.eu/eurostat/cache/metadata/en/hlth_sha11_esms.htm (accessed: 13.08.2021).
Google Scholar
Eurostat Database (n.d.), https://ec.europa.eu/eurostat/data/database (accessed: 1.08.2021).
Google Scholar
DOI: https://doi.org/10.1007/978-3-319-69909-7_944-2
Gazaway S.B., Barnett M.D., Bowman E.H., Ejem D., Harrell E.R., Brown C.J., Bakitas M. (2021), Health Professionals Palliative Care Education for Older Adults: Overcoming Ageism, Racism, and Gender Bias, “Current Geriatrics Reports”, no. 10, pp. 148–156, https://doi.org/10.1007/s13670-021-00365-7
Google Scholar
DOI: https://doi.org/10.1007/s13670-021-00365-7
Glied S., Smith P.C. (2013), The Oxford Handbook of Health Economics, Oxford University Press, Oxford.
Google Scholar
Guinness L., Wiseman V . (2011), Introduction To Health Economics, McGraw-Hill Education, Berkshire.
Google Scholar
MacDonald M. (1995), Feminist economics: from theory to research, “Canadian Journal of Economics”, vol. 28, no. 1, pp. 159–176.
Google Scholar
DOI: https://doi.org/10.2307/136027
Makowska M., Boguszewski R., Nowakowski M., Podkowińska M. (2020), Self-Medication-Related Behaviors and Poland’s COVID–19 Lockdown, “International Journal of Environmental Research and Public Health”, vol. 17, no. 8344, https://doi.org/10.3390/ijerph17228344
Google Scholar
DOI: https://doi.org/10.3390/ijerph17228344
Matin B.K., Azami S.R., Mahmoudi S., Rezaei S., Shaahmadi F., Karyani A.K. (2015), Determinants of pharmaceutical expenditures of urban households: A time series study in Kermanshah province (Iran), “Electron Physician”, vol. 7, no. 7, https://doi.org/10.19082/1470
Google Scholar
DOI: https://doi.org/10.19082/1470
McClellan C., Fingar K.R., Ali M.M., Olesiuk W.J., Mutterd R., Gibson T.B. (2019), Price elasticity of demand for buprenorphine/naloxone prescriptions, “Journal of Substance Abuse Treatment”, vol. 106, pp. 4–11, https://doi.org/10.1016/j.jsat.2019.08.001
Google Scholar
DOI: https://doi.org/10.1016/j.jsat.2019.08.001
Murphy S.M., Morgan J.R., Jeng P.J., Schackman B.R. (2019), Will converting naloxone to over-the-counter status increase pharmacy sales?, “Health Services Research”, vol. 54, issue 4, pp. 764–772, https://doi.org/10.1111/1475-6773.13125
Google Scholar
DOI: https://doi.org/10.1111/1475-6773.13125
O’Brien G.L., McAlister M., Byrne S., Gallagher J. (2020a), Overcoming hurdles: measurement of health-related outcomes associated with national level medicines usage in Ireland, “Drugs in Context”, vol. 9, no. 4–2, https://doi.org/10.7573/dic.2020-4-2
Google Scholar
DOI: https://doi.org/10.7573/dic.2020-4-2
O’Brien G.L., Sinnott S.-J., O’Flynn B., Walshe V., Mulcahy M., Byrne S. (2020b), Out of pocket or out of control: A qualitative analysis of healthcare professional stakeholder involvement in pharmaceutical policy change in Ireland, “Health Policy”, vol. 124, issue 4, pp. 411–418, https://doi.org/10.1016/j.healthpol.2020.02.011
Google Scholar
DOI: https://doi.org/10.1016/j.healthpol.2020.02.011
OECD (2003), Glossary of statistical terms, https://stats.oecd.org/glossary/ (accessed: 12.08.2021).
Google Scholar
Olsen J.A. (2017), Principles in Health Economics and Policy, Oxford University Press, Oxford.
Google Scholar
DOI: https://doi.org/10.1093/oso/9780198794837.001.0001
Santerre R.E., Vemont J.A. (2006), Assessing Consumer Gains from a Drug Price Control Policy in the United States, “Southern Economic Journal”, vol. 73(1), pp. 233–245.
Google Scholar
DOI: https://doi.org/10.1002/j.2325-8012.2006.tb00768.x
Sanwald A., Theurl E. (2017), Out-of-pocket expenditures for pharmaceuticals: lessons from the Austrian household budget survey, “European Journal of Health Economics”, vol. 18, pp. 435–447, https://doi.org/10.1007/s10198-016-0797-y
Google Scholar
DOI: https://doi.org/10.1007/s10198-016-0797-y
Siminski P. (2011), The price elasticity of demand for pharmaceuticals amongst high income older Australians: a natural experiment, “Applied Economics”, vol. 43, pp. 4835–4846.
Google Scholar
DOI: https://doi.org/10.1080/00036846.2010.498361
Sloan F.A., Hsieh C.-R. (2017), Health Economics, MIT Press, Cambridge.
Google Scholar
WHO (n.d.), Essential medicines, http://www.emro.who.int/health-topics/essential-medicines/index.html (accessed: 16.08.2021).
Google Scholar
WHO (n.d.), European Region Health Expenditure Dashboard, https://www.who.int/health_financing/topics/resource-tracking/European-Region-Health-Expenditure-Dashboard.pdf (accessed: 16.08.2021).
Google Scholar
WHO (n.d.), Global Essential Medicines, https://global.essentialmeds.org/dashboard/countries/97 (accessed: 16.08.2021).
Google Scholar
WHO (n.d.), Global Health Expenditure Database, https://apps.who.int/nha/database/Home/Index/en (accessed: 16.08.2021).
Google Scholar
WHO (n.d.), Global Health Expenditure Database. Health Expenditure Profile, https://apps.who.int/nha/database/country_profile/Index/en (accessed: 16.08.2021).
Google Scholar
WHO (n.d.), Health accounts, https://www.who.int/health-topics/health-accounts#tab=tab_1 (accessed: 16.08.2021).
Google Scholar
WHO (n.d.), Health budget, https://www.who.int/health-topics/health-budget#tab=tab_1 (accessed: 16.08.2021).
Google Scholar
WHO (n.d.), Pharmaceutical products, http://www.emro.who.int/health-topics/pharmaceutical-products/index.html (accessed: 16.08.2021).
Google Scholar
WHO (2000a), Guidelines for the regulatory assessment of medicinal products for use in self-medication, https://apps.who.int/iris/handle/10665/66154 (accessed: 16.08.2021).
Google Scholar
WHO (2000b), WHO report on cancer: setting priorities, investing wisely and providing care for all, Geneva.
Google Scholar
WHO (2001), WHO/WTO Workshop on Pricing and Financing of Essential Drugs, https://www.who.int/news/item/11-04-2001-who-wto-workshop-on-pricing-and-financing-of-essential-drugs (accessed: 25.08.2021).
Google Scholar
WHO (2013), Prequalification of medicines by WHO, https://www.who.int/news-room/fact-sheets/detail/prequalification-of-medicines-by-who (accessed: 16.08.2021).
Google Scholar
WHO (2018), WHO Report: Medicines reimbursement policies in Europe, Geneva.
Google Scholar
WHO (2019), WHO Report: Global spending on health: a world in transition, “WHO/HIS/HGF/HFWorkingPaper”, no. 19.4.
Google Scholar
WHO (2020), WHO Report: Global spending on health 2020: weathering the storm, Geneva.
Google Scholar
WHO (2021a), Cardiovascular diseases (CVDs), https://www.who.int/news-room/fact-sheets/detail/cardiovascular-diseases-(cvds) (accessed: 30.07.2021).
Google Scholar
WHO (2021b), Primary health care, https://www.who.int/news-room/fact-sheets/detail/primary-health-care (accessed: 16.08.2021).
Google Scholar
Xu K., Soucat A., Kutzin J., Brindley C., Maele N. van de, Touré H., Aranguren Garcia M., Li D., Barroy H., Flores G., Roubal T., Indikadahena C., Cherilova V., Siroka A. (2018), Public Spending on Health: A Closer Look at Global Trends, ”WHO/HIS/HGF/HF Working Paper”, no. 18.3, World Health Organization, Geneva.
Google Scholar
Downloads
Published
How to Cite
Issue
Section
