Competition Among Pharmacies as a Determinant of Drug Expenditures

This study explored and compared the associations between pharmacy competition and drug expenditures by individuals with influenza. This study used a dataset consisting of 6 694 534 individuals who purchased drugs for influenza at pharmacies from 2015 to 2019 in China. Patients’ annual average influ...

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Main Authors: Zixuan Peng PhD, Audrey Laporte PhD, Xiaolin Wei PhD, Peter C. Coyte PhD
Format: Article
Language:English
Published: SAGE Publishing 2024-12-01
Series:Inquiry: The Journal of Health Care Organization, Provision, and Financing
Online Access:https://doi.org/10.1177/00469580241307446
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author Zixuan Peng PhD
Audrey Laporte PhD
Xiaolin Wei PhD
Peter C. Coyte PhD
author_facet Zixuan Peng PhD
Audrey Laporte PhD
Xiaolin Wei PhD
Peter C. Coyte PhD
author_sort Zixuan Peng PhD
collection DOAJ
description This study explored and compared the associations between pharmacy competition and drug expenditures by individuals with influenza. This study used a dataset consisting of 6 694 534 individuals who purchased drugs for influenza at pharmacies from 2015 to 2019 in China. Patients’ annual average influenza-specific drug expenditures per visit at pharmacies was the outcome variable of interest. Pharmacy competition was measured using the Herfindahl-Hirschman index. A 3-way fixed-effects model combined with a lagged identification strategy was constructed to estimate the association between pharmacy competition and drug expenditures. When the radius of the market was set to 1, 5, and 10 km, for each 10% increase in the degree of total competition in the market, an individual’s annual average influenza-specific drug expenditures per visit fell by 0.65%, 2.21%, and 5.20%, respectively. With a more detailed understanding of the underlying mechanism through which pharmacy competition affects the behaviors of health care providers, competition can be considered as a potential tool to assist decision makers in the design of policies to curtail the growth in drug expenditures.
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series Inquiry: The Journal of Health Care Organization, Provision, and Financing
spelling doaj-art-12a88c3564b74c6f8b338dface02654e2025-08-20T02:39:21ZengSAGE PublishingInquiry: The Journal of Health Care Organization, Provision, and Financing0046-95801945-72432024-12-016110.1177/00469580241307446Competition Among Pharmacies as a Determinant of Drug ExpendituresZixuan Peng PhD0Audrey Laporte PhD1Xiaolin Wei PhD2Peter C. Coyte PhD3Southeast University, Nanjing, Jiangsu Province, ChinaUniversity of Toronto, Toronto, ON, CanadaUniversity of Toronto, Toronto, ON, CanadaUniversity of Toronto, Toronto, ON, CanadaThis study explored and compared the associations between pharmacy competition and drug expenditures by individuals with influenza. This study used a dataset consisting of 6 694 534 individuals who purchased drugs for influenza at pharmacies from 2015 to 2019 in China. Patients’ annual average influenza-specific drug expenditures per visit at pharmacies was the outcome variable of interest. Pharmacy competition was measured using the Herfindahl-Hirschman index. A 3-way fixed-effects model combined with a lagged identification strategy was constructed to estimate the association between pharmacy competition and drug expenditures. When the radius of the market was set to 1, 5, and 10 km, for each 10% increase in the degree of total competition in the market, an individual’s annual average influenza-specific drug expenditures per visit fell by 0.65%, 2.21%, and 5.20%, respectively. With a more detailed understanding of the underlying mechanism through which pharmacy competition affects the behaviors of health care providers, competition can be considered as a potential tool to assist decision makers in the design of policies to curtail the growth in drug expenditures.https://doi.org/10.1177/00469580241307446
spellingShingle Zixuan Peng PhD
Audrey Laporte PhD
Xiaolin Wei PhD
Peter C. Coyte PhD
Competition Among Pharmacies as a Determinant of Drug Expenditures
Inquiry: The Journal of Health Care Organization, Provision, and Financing
title Competition Among Pharmacies as a Determinant of Drug Expenditures
title_full Competition Among Pharmacies as a Determinant of Drug Expenditures
title_fullStr Competition Among Pharmacies as a Determinant of Drug Expenditures
title_full_unstemmed Competition Among Pharmacies as a Determinant of Drug Expenditures
title_short Competition Among Pharmacies as a Determinant of Drug Expenditures
title_sort competition among pharmacies as a determinant of drug expenditures
url https://doi.org/10.1177/00469580241307446
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