Health Affairs

Health Affairs, 28, no. 4 (2009): 1022-1033 doi: 10.1377/hlthaff.28.4.1022 © 2009 by Project HOPE	New Online   September Issue: Malpractice & Errors   Uninsured Children   Workers' Insurance Burden   Policy Brief: Meaningful Use

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An Unhealthy Public-Private Tension: Pharmacy Ownership, Prescribing, And Spending In The Philippines

Chris D. James, John Peabody, Orville Solon, Stella Quimbo and Kara Hanson

Physicians’ links with pharmacies may create perverse financial incentives to overprescribe, prescribe products with higher profit margins, and direct patients to their pharmacy. Interviews with pharmacy customers in the Philippines show that those who use pharmacies linked to public-sector physicians had 5.4 greater odds of having a prescription from such physicians and spent 49.3 percent more than customers using other pharmacies. For customers purchasing brand-name medicines, switching to generics would reduce drug spending by 58 percent. Controlling out-of-pocket spending on drugs requires policies to control financial links between doctors and pharmacies, as well as tighter regulation of nongeneric prescribing.

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