Typical Household Elasticity of Demand for Pharmaceuticals Across European States

Authors

DOI:

https://doi.org/10.18778/0208-6018.358.03

Keywords:

health economics, out-of-pocket pharmaceutical expenditures, income elasticity of demand, price elasticity of demand, regional studies

Abstract

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

Download data is not yet available.

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

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

2022-08-22

How to Cite

Żółtaszek, A. . (2022). Typical Household Elasticity of Demand for Pharmaceuticals Across European States. Acta Universitatis Lodziensis. Folia Oeconomica, 1(358), 32–58. https://doi.org/10.18778/0208-6018.358.03

Issue

Section

Articles