Variations in non-prescription drug consumption and expenditure: Determinants and policy implications

Abstract

This paper analyses the determinants of cross-regional variations in expenditure and consumption for non-prescription drugs using the Italian Health Care Service as a case study. This research question has never been posed in other literature contributions. Per capita income, the incidence of elderly people, the presence of distribution points alternative to community pharmacies (para-pharmacies and drug corners in supermarkets), and the disease prevalence were included as possible explanatory variables. A trade-off between consumption of non-prescription and prescription-only drugs was also investigated. Correlation was tested through linear regression models with regional fixed-effects. Demand-driven variables, including the prevalence of the target diseases and income, were found to be more influential than supply-side variables, such as the presence of alternative distribution points. Hence, the consumption of non-prescription drugs appears to respond to needs and is not induced by the supply. The expected trade-off between consumption for prescription-only and non-prescription drugs was not empirically found: increasing the use of non-prescription drugs did not automatically imply savings on prescription-only drugs covered by third payers. Despite some caveats (the short period of time covered by the longitudinal data and some missing monthly data), the regression model revealed a high explanatory power of the variability and a strong predictive ability of future values.