A model of state-level prescription drug expenditures in the USA

Abstract

Research is scanty on pharmaceutical care expenditures of developed nations. This paper models the determinants of state-level prescription drug expenditures for the USA, based on pooled data for 1980, 1982, 1984, 1988 and 1990. The GLS regression results indicate that older adults age 65 or more, Medicaid recipients and realincome are strongly significant determinants. With the growing proportion of the elderly and the increasing poverty rates among Medicare and Medicaid recipients, pharmaceutical care reform proposals need to focus on preventive care, rather than expensive treatments.