Incentives matter, the demand curve slopes downward, mental health edition

 [[{“value”:”Since 2000, pharmaceuticals for common psychiatric conditions aged out of patent protection. After generic entry, supply increases as more sellers enter the market, leading to lower prices – about 80-85% less! Cheaper prescriptions and more treatment are the stated goal of policies to improve affordability. …Drug prices definitely fell during this period. For the SSRI sertraline, consumer cost per month dropped from ~35 dollars in
The post Incentives matter, the demand curve slopes downward, mental health edition appeared first on Marginal REVOLUTION.”}]] 

Since 2000, pharmaceuticals for common psychiatric conditions aged out of patent protection. After generic entry, supply increases as more sellers enter the market, leading to lower prices – about 80-85% less! Cheaper prescriptions and more treatment are the stated goal of policies to improve affordability.

…Drug prices definitely fell during this period. For the SSRI sertraline, consumer cost per month dropped from ~35 dollars in the mid-2000s to ~6 dollars by the mid 2010s. Total Medicaid spending on antidepressants peaked in 2004 ($2 billion) then declined through 2018 ($750 million). Authors of that paper note that “generic drug prices steadily decreased over time” while utilization increased. From 2013 to 2018, both out-of-pocket costs and total expenditures per prescription fill went down for antidepressants and antipsychotics. For antipsychotics, generic drug claims grew 35% from 2016 to 2021.

According to the DEA, total dispensing of stimulants jumped 58% from 2012 to 2022; note how this follows the generic entry of long-acting Ritalin (methylphenidate) and Adderall (amphetamine) products. More recently, stimulant prices shot up amid shortages.

And:

By the mid 2010s, people with psychiatric conditions were better able to afford mental health care. Young adults, now on their parents insurance, saw declining out of pocket costs for behavioral health in particular. For people aged 18-25, “mental health treatment increased by 5.3 percentage points relative to a comparison group of similar people ages 26–35.” Even for employer plans, in-network prices and cost-sharing decreased from 2007 to 2017…

Here is the full essay by AffectiveMedicine.  It has numerous other points of interest.

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 Economics, Medicine, Uncategorized