OBJECTIVES : In Australia prescription medicines on the Pharmaceutical Benefits Schedule are subsidised. Patients can access these medicines by paying a co-payment, with the government paying the difference between the listed price and the co-payment. The listed price to government for the medicines is often much higher, and can vary across different brands of the same medicine. We evaluated consumer preferences for medicines under a hypothetical policy in which there is a choice between the subsidised medicine (for $40) or a full priced (range $35 - $120).

METHODS : We designed a discrete choice experiment (DCE) in which consumers were asked to choose their preferred medicine (original brand or generic) for a hypothetical health condition. The attributes of the medicines included the cost to the consumer, whether it is listed for government subsidy, collection time (dispensed now or later in the day) and whether or not the pharmacist recommended the product. Respondents (N=1,248) were recruited via an on-line panel. Analysis was undertaken using mixed logit willingness to pay and latent class (LCA) models.

RESULTS : Consumers prefer the subsidised medicine. On average, they are willing to pay $3 more per script for the pharmacists recommendation, $2 for a drug that is reimbursed by the government, but only $1 more for an original brand medicine. The LCA revealed four distinct classes of individuals: a class that prefers the branded product irrespective of any other attributes; a class that strongly attends to the pharmacist’s recommendation; and two classes that both prefer lower prices and subsidised products, one of these classes also have a preference for collection time and pharmacist recommendation.

CONCLUSIONS : The majority of respondents prefer the subsidised medicine, irrespective of brand, with only a small proportion of respondents choosing the more expensive branded medicine. Suggesting that pricing policies that allow brand premiums may have limited impact on consumer choices.