TITLE

The influences of Taiwan's generic grouping price policy on drug prices and expenditures: evidence from analysing the consumption of the three most-used classes of cardiovascular drugs

AUTHOR(S)
Chi-Liang Chen; Likwang Chen; Wei-Chih Yang
PUB. DATE
January 2008
SOURCE
BMC Public Health;2008, Vol. 8, p118
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Background: Controlling the growth of pharmaceutical expenditures is a major global challenge. Promotion of generic drug prescriptions or use is gaining increased support. There are substantial contextual differences in international experiences of implementing pharmaceutical policies related to generic drugs. Reporting these experiences from varied perspectives can inform future policy making. This study describes an experience of Taiwan, where patients with chronic (long-term) conditions are usually managed in hospitals and drugs are provided in this setting with costs reimbursed through the National Health Insurance (NHI). It investigates the effects of Taiwan's reimbursement rate adjustment based on chemical generic grouping in 2001. This research also demonstrates the use of micro-level longitudinal data to generate policy-relevant information. The research can be used to improve efficiency of health care resource use. Methods: We chose the three most-used classes of cardiovascular drugs for this investigation: beta blocking agents, calcium channel blockers mainly with vascular effects, and plain ACE inhibitors. For each drug class, we investigated changes in daily expense, consumption volume, and total expenditures from a pre-action period to a corresponding post-action period. We compared an exposure or "intervention" group of patients targeted by the action with a comparisonor "control" group of patients not targeted by the action. The data sources are a longitudinal database for 200,000 NHI enrolees, corresponding NHI registration data of health care facilities, and an archive recording all historical data on the reimbursement rates of drugs covered by the NHI. We adopted a fixed effects linear regression model to control for unobserved heterogeneity among patient-hospital groups. Additional descriptive statistics were applied to examine whether any inappropriate consumption of drugs in the three classes existed. Results: The daily drug expense significantly decreased from the pre-action period to the postaction period for the exposure group. The average magnitudes of the decreases for the three classes of drugs mentioned above were 14.8%, 5.8% and 5.8%, respectively. In contrast, there was no reduction for the comparison group. The number of days of the prescription increased significantly from the pre- to the post-action period for both exposure and comparison groups. The total expense also significantly increased for both patient groups. For the exposure group, the average magnitudes of the growth in the total expenditure for the three classes of drugs were 47.7%, 60.0% and 55.3%, respectively. For the comparison group, they were 91.6%, 91.6% and 63.2%, respectively. After the action, approximately 50% of patients obtained more than 180 days of prescription drugs for a six-month period. Conclusion: The 2001 price adjustment action, based on generic grouping, significantly reduced the daily expense of each of the three classes of cardiovascular drugs. However, in response to this policy change, hospitals in Taiwan tended to greatly expand the volume of drugs prescribed for their regular patients. Consequently, the total expenditures for the three classes of drugs grew substantially after the action. These knock-on effects weakened the capability of the price adjustment action to control total pharmaceutical expenditures. This means that no saved resources were available for other health care uses. Such expansion of pharmaceutical consumption might also lead to inefficient use of the three drug classes: a large proportion of patients obtained more than one day of drugs per day in the post-action period, suggesting manipulation to increase reimbursement and offset price controls. We recommend that Taiwan's government use the NHI data to establish a monitoring system to detect inappropriate prescription patterns before implementing future policy changes. Such a monitoring system could then be used to deter hospitals from abusing their prescription volumes, making it possible to more effectively save health care resources by reducing drug reimbursement rates.
ACCESSION #
51485634

 

Related Articles

  • Staffers tweak Medicare bill; measure's fate still uncertain. Young, Jeffrey // Hill;12/11/2007, Vol. 14 Issue 144, p28 

    The article reports on the Medicare bill worked by staffers that would prevent a scheduled 10% cut in Medicare payments to doctors in U.S. Lobbyists believe that House Democrats led the charge to fatten the bill, especially the provisions affecting health insurance companies. Senate Finance...

  • CHAPTER 24: MEDICAID. Miller, Richard K.; Washington, Kelli D. // Healthcare Business Market Research Handbook;2006, p139 

    Chapter 24 of the book "The 2006 Healthcare Business Market Research Handbook" is presented. It explores Medicaid spending on hospital services and physician services in the U.S. in 2005. It also offers a look at the growth of the Medicaid program which is paid by federal and state taxpayers....

  • How Much Can Really Be Saved by Rolling Back SCHIP? The Net Cost of Public Health Insurance for Children. Selden, Thomas M.; Hudson, Julie L. // Inquiry (00469580);Spring2005, Vol. 42 Issue 1, p16 

    A growing body of research demonstrated the many benefits of expanded public coverage for children. Expansions in Medicaid and the State Children's Health Insurance Program (SCHIP) have helped to increase insurance coverage, increase access to care, and reduce the financial burdens facing...

  • Medicare Fee-for-Service Beneficiary Access to Physician Services: Trends in Utilization of Services, 2000 to 2002: GAO-05-145R. Steinwald, A. Bruce // GAO Reports;1/12/2005, p1 

    In the 1990s, several reforms to Medicare physician fees were implemented to help control spending growth in the traditional Medicare program, known as fee-for-service (FFS) Medicare. Concerns were raised that these reforms might have a negative impact on Medicare beneficiaries' access to...

  • Medicare Part D: CMS's Process and Policy for Enrolling New Dual-Eligible Beneficiaries: GAO-07-1022T. King, Kathleen M. // GAO Reports;6/21/2007, p1 

    Under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), dual-eligible beneficiaries--individuals with both Medicare and Medicaid coverage--have their drug costs covered under Medicare Part D rather than under state Medicaid programs. The MMA requires the Centers...

  • NBGH call for government data to enhance evidence-based medicine. Wojcik, Joanne // Business Insurance;3/28/2005, Vol. 39 Issue 13, p26 

    The article informs that a group of the nation's largest employers is sitting down with the federal government to tap into its huge health care data warehouse as part of a larger effort to redesign benefit plans so they provide incentives to encourage the use of evidence-based medicine. The...

  • Should The Financing Of U.S. Catastrophic Health Care Emphasize Private Insurance Methods? PRO. Crane, Philip M. // Congressional Digest;Apr87, Vol. 66 Issue 4, p104 

    Presents views of the author on the issue of privatization of financing of health care in the U.S. Drawbacks of the Medicare program of the government; Possible approaches that can be implemented by the U.S. administration to solve the problem; Benefits of providing saving incentives to...

  • Voluntary Partial Capitation: The Community Nursing Organization Medicare Demonstration. Frakt, Austin B.; Pizer, Steven D.; Schmitz, Robert J.; Mattke, Soeren // Health Care Financing Review;Summer2005, Vol. 26 Issue 4, p21 

    In a recently concluded Medicare demonstration, Community Nursing Organizations (CNOs) received capitated payment to provide a subset of Medicare services through a nursing case management delivery system. Demonstration participation was voluntary, both for CNOs and recruited beneficiaries,...

  • Study: patients with poor vision incur greater medical costs.  // Ophthalmology Times;3/15/2007, Vol. 32 Issue 6, p8 

    The article reports on the study that determines poor vision in patients may incur greater medical costs. In affiliation with the Potomac Institute for Policy Studies, the Wilmer Eye Institute at Johns Hopkins University School of Medicine, and Pfizer Inc., the study shows that Medicare...

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics