Cross-Price Elasticities and the Design of Prescription Drug Benefits

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Cross-Price Elasticities and the Design of Prescription Drug Benefits
National Bureau of Economic Research [NBER]

Dec. 21, 2006

Excerpt: [The authors'] results show that increases in prescription drug prices reduce both the use of and spending on prescription drugs. However, consumers substitute the use of outpatient care and inpatient care for prescription drug use, and the expenditure reductions on prescription drugs are largely offset by the increases in other spending.

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