The Effects of Co-Payments within Drug Reimbursement Programs

Abstract

Prescription drug expenditures are one of the fastest rising components of provincial health care spending. One of the primary responses of provincial governments to rising drug expenditures has been to introduce or increase beneficiary co-payment requirements. This paper examines the evidence regarding the effects of co-payments on drug program expenditures, the appropriateness of drug utilization, and the efficiency with which prescription drug markets operate. Although drug co-payments can reduce drug program expenditures, they can only do so by compromising other program goals. Alternative policies are then discussed that may help contain costs without compromising, and in some instances even improving, drug therapy.