Is pharmaceutical expenditure related to the business cycles?

ABSTRACT

Recent research is focused on the study of health care expenditure and fiscal sustainability. In order to facilitate the understanding of this issue, we centre our interest on the Spanish pharmaceutical expenditure. Specifically, using data for the period 1995–2012, in the article we analyse if economic cycles affect pharmaceutical expenditures. Our results support that there is a positive relationship between pharmaceutical expenditure and economic development. Therefore, we conclude that pharmaceutical expenditures are pro cyclical over the last years.

KEYWORDS:

• Pharmaceutical expenditures
• business cycles
• health care system

JEL CLASSIFICATION:

• H51
• I1
• I18

Notes

¹ It allows us doing benchmarking and international comparisons between different national health systems. Moreover, its frequency (annually renewable) and that it is used in a wide range of academic papers, support the reliability of this use.

² In order to ensure a complete time-series we disregarded the observations available prior 1995.

³ Also, they were log-transformed before using the filter.