Policy Analysis and Management

Principal Investigator: John Cawley
Faculty Associates: John Rizzo
While previous research has identified the high and rising prevalence of obesity in the United States, and shed light on the economic and clinical repercussions of this condition, there has to date been little study of one treatment for obesity: anti-obesity pharmaceuticals. In particular, little is known about the determinants of utilization of, or expenditures on, these drugs. The role of anti-obesity drugs on clinical and financial outcomes associated with obesity is also poorly understood. We are initiating a research agenda focused on the causes and consequences of the utilization of anti-obesity drugs in the United States. Specific aims include: (1) Determine how socio-demographic and socioeconomic characteristics, health insurance coverage, clinical factors, and cost affect the propensity to use anti-obesity drugs. (2) Determine how sociodemographic and socioeconomic characteristics, health insurance coverage, and clinical factors affect both total expenditures and patient out-of-pocket expenditures among subjects who use anti-obesity drugs. The study uses data from the Medical Expenditure Panel Survey (MEPS), which is uniquely suited to investigate these issues. We will study the utilization of anti-obesity drugs among obese and non-obese Americans, and identify the factors that influence access and use as well as the factors that affect expenditures (both total and patient out-of-pocket) on these drugs. The proposed research will also lay the foundation for future, more detailed studies of the economic as well as clinical impacts of anti-obesity drug use, as well as studies that examine the impacts of alternative anti-obesity drugs, including the highly controversial drug combination fen-phen.

Principal Investigator: Donald Kenkel
Faculty Associates: Rosemary Avery, Dean Lillard, Alan Mathios
This research project creates and utilizes a unique data archive of every pharmaceutical advertisement (for both prescription and OTC) appearing in dozens of magazines over the period 1984-2002. These advertising data will allow several papers to be written examining the impact of pharmaceutical advertising on consumer welfare. A subset of these papers will examine the impact of FDA regulation of direct-to-consumer (DTC) advertising of prescription drugs on the flow of information to consumers. Other papers will focus on the smoking cessation market in particular. For example, changes in regulations governing DTC advertising in broadcast media, as well as the movement of smoking cessation products from prescription to over-the-counter status, provides unique variation that allows us to identify the impact of the regulation of information on consumers' exposure to new smoking cessation technologies. The advertising data archive involves one of the most extensive cataloging of pharmaceutical advertising in print ever undertaken. The archive will also include advertisements shown during over 800 hours of television programming.

Principal Investigator: Sharon Tennyson
Faculty Associates: Kosali Simon
This research project analyzes the impact of state Medicaid managed care and pharmacy regulations on access to care, pharmaceutical usage patterns and Medicaid costs. The research investigates (1) the extent to which physician prescribing behaviors are changed or constrained by Medicaid restrictions; (2) the extent to which patient access to and use of needed medications is reduced by Medicaid restrictions; and (3) the impact of Medicaid managed care and pharmacy restrictions on Medicaid cost growth. These questions will be analyzed using several data sources, including the National Ambulatory Medical Care Survey (NAMCS); the Community Tracking Study (CTS) and the Medical Expenditure Panel Study (MEPS).

Principal Investigator: John Rizzo
This research project explores the impact of Health Maintenance Organizations (HMOs) in comparison to traditional indemnity insurance plans on access to pharmaceutical treatment and on the prices and expenditures for such treatment. The study utilizes a national database of subjects to examine consumer, insurer and total expenditures for prescribed medicines. Average prices to the consumer and insurer are compared as well. Initial results indicate that subjects insured by HMOs are more likely to receive pharmaceutical treatment. We also find that patient out of pocket costs per prescription are significantly less in HMOS. Overall treatment costs differ little according to insurance plan. Collectively, the preliminary results suggest that individuals covered by HMOs have greater access to pharmaceutical treatment. To the extent that pharmaceutical treatments serve a preventive function, reducing the odds of more serious illnesses developing, HMOs may be more generous in providing such treatments to constrain higher future health care costs.