M-RCBG Associate Working Paper No. 70
Strict Price Control and Behaviorally Informed Pharmaceutical Policy: Evidence from Poland
Maciej Drozd and Katarzyna Michalska
Poland’s Reimbursement Act of 2012 introduced one of the most restrictive pharmaceutical pricing policies in the developed world. Under this law, prices and margins for reimbursed prescription drugs were fixed by the government and indexed to market share in therapeutic classes. In this paper, we offer a first empirical evaluation of the Reimbursement Act by analyzing the public payer’s claims data from 2010 to 2014. We find that Poland was successful in lowering drug prices and containing aggregate spending at no loss to coverage. Reimbursement per daily drug dose decreased by 18% and patient copayment fell by 7% (averages weighted by sales). Yet patients and the national payer could have saved more if patients and prescribers were more attentive to prices of substitute medicines. We suggest several behaviorally informed measures to encourage further cost savings in the Polish pharmaceutical market.