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saving medicines like statins and antihypertensives, for which clinical trials show large mortality benefits. We find no indication that these reductions in demand affect only ‘low-value’ drugs; on the contrary, those at the highest risk of heart attack and stroke, who would benefit the most from statins and antihypertensives, cut back more on these drugs than lower risk patients. Similar patterns exist for other drug-disease pairs, and irrespective

When manufacturers donate to these charities, they fund cost-sharing for all drugs for a given condition, not just their own. Using Medicare data from 2010 and 2017, Dafny and her coauthors estimated the share of sales that assistance would need to induce to make such broad donations profitable for the leading 1-2 manufacturers in each condition covered by a charity. They call this the “breakeven inducement percentage,” noting that “inducement” refers to use that would not occur in the absence of assistance, even if it is medically appropriate.

HKS Authors See citation below for complete author information. Amitabh Chandra Ethel Zimmerman Wiener Professor of Public Policy, HKS; Henry and Allison McCance Professor of Business Administration, HBS Abstract We use the design of Medicare’s prescription drug benefit program to demonstrate three facts about the health consequences of cost-sharing. First, we show that an as-if-random increase of 33.6% in out-of-pocket price (11.0 percentage points (p.p.) change in coinsurance, or $10.40 per drug) causes a 22.6% drop in total drug consumption ($61.20), and a 32.7% increase in monthly mortality (0.048 p.p.). Second, we trace this mortality effect to cutbacks in life-saving medicines like ... Read more