Determinants of out-of-pocket pharmaceutical expenditure and access to drugs in Catalonia

Abstract

This paper examines the determinants of the demand for pharmaceuticals in the Spanish Autonomous Community of Catalonia using the latest available official survey data. Having accounted for the individual differences in cost-sharing among consumers, as well as the influence of self-medication, the paper builds a model of the (household) determinants of pharmaceutical expenditure and consumption. The econometric application deals with the infrequency of purchases and the non-distinction between out-of-pocket spending and drug cost sharing. The empirical evidence suggests that income and the variables accounting for cost sharing were significantly associated with drug use but not drug expenditure. Furthermore, gender, health status and having health insurance appear to be significant predictors. Access to pharmacies increases both drug use and expenditure; self-medication also increases drug expenditure as expected. These results are relevant for the entire Spanish case where current reform proposals have recommended the introduction of means-tested income-related rather than age related co-payments. The same applies to the need for controlling self-medication which results from individual behaviour of consuming medicines for minor ailments without a prescription and which can be acquired OTC and are priced cheaply.