Medical Provider Agency and Pharmaceutical Demand with Universal Coverage : Evidence from Taiwan

Medical providers' profit considerations might take priority over their patients' needs in Taiwan because they are allowed to both dispense and prescribe medications. I examine this problem in the demand of the anti-diabetic drugs market using information from millions of claims. Empirical results show that owners of medical institutions are more likely to prescribe generic drugs and expensive drugs. These drugs, however, are less likely to be prescribed by the medical providers owned by government. Medical providers are less price-sensitive to generic drugs than the brand-name drugs. The demand of clinics are more price-elastic than that of the hospitals