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Multiplex Therapeutic Drug Monitoring by Isotope-dilution HPLC-MS/MS of Antibiotics in Critical Illnesses

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Pharmaceutical demand response to utilization management.

¹Department of Economics, Yale University, United States of America.

Journal of Health Economics

|December 19, 2023

Summary

Medicare beneficiaries prefer paying higher premiums for prior authorization over increased out-of-pocket costs. This study analyzes the trade-offs between these prescription drug cost management strategies.

Keywords:

Demand Elasticity Medicare Moral hazard Part D Pharmaceutical Prior authorization Selection Utilization management

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Area of Science:

Health economics
Pharmaceutical policy

Background:

Prescription drug insurance uses prior authorization and out-of-pocket (OOP) costs to manage spending.
Prior authorization faces criticism for administrative burden on providers.

Purpose of the Study:

To determine whether Medicare beneficiaries prefer prior authorization via higher premiums or replacement with higher OOP costs.
To analyze the trade-off based on the relative impact of these strategies on pharmaceutical demand.

Main Methods:

Econometric analysis of pharmaceutical demand in Medicare Part D.
Addressing endogeneity from unobserved drug quality and plan selection.

Main Results:

Prior authorization and OOP costs have distinct impacts on drug demand.
Beneficiaries indicate a preference for prior authorization, even with associated premium increases.

Conclusions:

Despite administrative burdens, Medicare beneficiaries favor prior authorization over higher out-of-pocket expenses.
This preference suggests a value placed on predictable costs and potentially drug access facilitated by prior authorization.