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Why Do Hospitals and Clinics in Taiwan Not Release Prescriptions? An Explanation of the Pharmaceutical Price Gap

56, 1, 79-114, 01, 2020
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* Authors: Chien-Yuan Sher and Ming-Chen Chen
 
* Keywords: Separation of Dispensing and Prescribing, Prescription, Pharmaceutical Price Gap, National Health Insurance Research Database
 
* JEL Classification: I11, I12, I18
 
* Download: 文件下載圖示 (另開新視窗) Full Text
 

* Abstract *
 
  Although the policy regarding the separation of dispensing and prescribing drugs has been in force since 1990s, the authorities in Taiwan have not yet enacted rules requiring hospitals or clinics to release prescriptions, which a patient can take to the pharmacy to get the filling, as for many years, the government has relied on only physicians’ voluntary cooperation to realize this policy. In order to help motivate physicians to release more prescriptions, this study examines their behavior and discusses how the profit from the pharmaceutical price gap (whereby the pharmaceutical reimbursement by National Health Insurance is higher than the actual expenditure) affects physicians’ willingness to release prescriptions. Based on the National Health Insurance Research Database, we analyze clinic records in 2008 and 2010, compare them with information of the 6th and 7th adjustments in the pharmaceutical reimbursement schedule, and estimate the profit from the pharmaceutical price gap in each clinic record. The findings show that physicians statistically significantly tend to keep prescriptions, including for drugs whose reimbursement prices have been reduced in the two adjustments or for prescriptions with higher drug reimbursement. This implies that physicians do consider pharmaceutical profit when prescribing. It also means that if the government can amend the reimbursement policy that is causing the pharmaceutical price gap, then physicians will release more prescriptions to pharmacists.
 
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