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Project Citation: 

Yurukoglu, Ali, Liebman, Eli, and Ridley, David B. Replication data for: The Role of Government Reimbursement in Drug Shortages. Nashville, TN: American Economic Association [publisher], 2017. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-13.

Project Description

Summary:  View help for Summary Beginning in the mid-2000s, the incidence of drug shortages rose, especially for generic injectable drugs such as anesthetics and chemotherapy treatments. We examine whether reimbursement changes contributed to the shortages, focusing on a reduction in Medicare Part B reimbursement to providers for drugs. We hypothesize that lower reimbursement put downward pressure on manufacturers' prices, which reduced manufacturers' incentives to invest in capacity, reliability, and new launches. We show that after the policy change, shortages rose more for drugs with higher shares of patients insured by Medicare, greater decreases in provider reimbursement, and greater decreases in manufacturer prices.

Scope of Project

JEL Classification:  View help for JEL Classification
      H51 National Government Expenditures and Health
      I18 Health: Government Policy; Regulation; Public Health
      L10 Market Structure, Firm Strategy, and Market Performance: General
      L65 Chemicals; Rubber; Drugs; Biotechnology; Plastics

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