New drugs and the growth of health expenditure: evidence from diabetic patients in Taiwan

• DOI: 10.1002/hec.1724
• Publication Date: 2011-03-11T03:22:42Z
• Authors: Ya‐Ming Liu; Chee‐Ruey Hsieh
• Keywords: Health Economics

This paper contributes to the growing body of literature that debates whether adoption pharmaceutical innovation increases overall expenditure on health care. By examining data obtained from Taiwan and focusing diabetic patients, we use a new class drugs, namely, thiazolidinediones, as an example investigate effect prescribing drugs patients by impact treatment substitution expansion. Overall, our results indicate introduction mainly impacts outpatient drug does not give rise any offsetting other inpatient expenditures. suggests in treating is expenditure-increasing. In addition, find evidence channel has more significant level than expansion channel. An important policy implication for finding justification increasing diabetes conditional upon lowering demand types health-care services. contrast, it increased benefits per se.