Table 6.
Relationship between co-insurance and elasticity
| Sample | Dependent Variable: Co-insurance rate | ||||||
|---|---|---|---|---|---|---|---|
| All drugs & plans (1) | All drugs & plans (2) | High frequency drugs (3) | All drugs & plans (4) | “Lower subst.” drugs (5) | Branded drugs (6) | Generic drugs (7) | |
| Panel A. Drug-level analysis | |||||||
| Estimated demand elasticity | −0.283 (0.044) | −0.284 (0.044) | −0.336 (0.081) | −0.236 (0.037) | −0.315 (0.098) | −0.264 (0.032) | −0.619 (0.075) |
| Plan fixed effects | No | Yes | Yes | Yes | Yes | Yes | Yes |
| Drug price included | No | No | No | Yes | No | No | No |
| R-squared | 0.083 | 0.342 | 0.37 | 0.426 | 0.493 | 0.303 | 0.518 |
| No. of Obs. (plan years) | 654,270 | 654,270 | 521,358 | 654,270 | 139,965 | 277,684 | 376,586 |
| Mean of Dep. Var. | 0.435 | 0.435 | 0.441 | 0.435 | 0.485 | 0.400 | 0.462 |
| Std. Dev. Of Dep. Var. | 0.306 | 0.306 | 0.304 | 0.306 | 0.339 | 0.266 | 0.33 |
| Panel B. Class-level analysis | |||||||
| Estimated demand elasticity | −0.308 (0.064) | −0.310 (0.065) | −0.316 (0.074) | −0.256 (0.053) | |||
| Plan fixed effects | No | Yes | Yes | Yes | |||
| Drug price included | No | No | No | Yes | |||
| R-squared | 0.030 | 0.305 | 0.34 | 0.387 | |||
| No. of Obs. (plan years) | 587,050 | 587,050 | 463,507 | 587,050 | |||
| Mean od Dep. Var. | 0.408 | 0.408 | 0.416 | 0.408 | |||
| Std. Dev. Of Dep. Var. | 0.267 | 0.267 | 0.267 | 0.267 | |||
Table shows the relationship between a drug’s (Panel A) or class’ (Panel B) pre-gap co-insurance rate and its estimated elasticity. The unit of observation is a drug (or class) by plan. Standard errors in parentheses are clustered at the drug (or class) levels.