Healthy Skepticism Library item: 13742

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Publication type: Journal Article

Iizuka T.
Experts' agency problems: evidence from the prescription drug market in Japan.
Rand J Econ 2007 Aut; 38:(3):844-62
http://www.ncbi.nlm.nih.gov/pubmed/18478669

Abstract:

This article examined the physician-patient agency relationship in the context of the prescription drug market in Japan. In this market, physicians often both prescribe and dispense drugs and can pocket profits in so doing. A concern is that, due to the incentive created by the mark-up, physicians’ prescription decisions may be distorted. Empirical results using anti-hypertensive drugs suggest that physicians’ prescription choices are influenced by the mark-up. However, physicians are also sensitive to the patient’s out-of-pocket costs. Overall, although the mark-up affects prescription choices, physicians appear more responsive to the patient’s out-of-pocket costs than their own profits from mark-up.

Keywords:
MeSH Terms: Antihypertensive Agents/economics Conflict of Interest/economics* Costs and Cost Analysis/economics Drug Costs* Drug Industry/economics* Drug Utilization Economics, Pharmaceutical* Health Care Sector* Humans Insurance, Pharmaceutical Services Japan Models, Economic Physician's Practice Patterns/economics* Physician-Patient Relations Prescription Fees Prescriptions, Drug/economics* Substances: Antihypertensive Agents