Introduction: In recent decades, the development of medical and pharmaceutical science has led to a heavy financial burden on the government, insurance companies, and the general population. Due to the increasing the cost of pharmaceutical products in the Kermanshah Province, policy makers have tried to identify the factors that resulted in the increases. The aim of this study was to determine the main factors that affect the expenditures for pharmaceutical products by urban households in Kermanshah Province, Iran. 

Methods: This analytical-descriptive study was conducted using time series method. The study population was urban households of Kermanshah Province from 1991 to 2013. The explanatory variables of the log-log model were drug price index (LnDPI), the average income of urban households (LnINC), the number of physicians per 1,000 people (LnPH), and the number of hospital beds per 1,000 people (LnBE).The required data were acquired from the Statistical Center of the Ministry of Health and Medical Education. The unit root was evaluated by the Dickey-Fuller test. Stata v.11 software was used for the statistical analysis.

Results: Coefficients of LnDPI and LnPH were 0.97 and 0.77, respectively, and they were statistically significant (p < 0.05). Also, the coefficients of D. LnINC (first difference of LnINC) and LnBE were 0.34 and 1.8, respectively, and both of them were statistically insignificant (p > 0.05).

Conclusion: The results showed that drugs are non-elastic and essential for households. It should be noted that the health policy makers in Iran should conduct appropriate planning to ensure both the physical and financial accessibility to drugs by urban households. The development of basic and supplementary health insurance coverage, especially for poor populations and urban areas where there are patients with chronic diseases, can be a suitable solution to reduce barriers to acquiring the required drugs.


Keywords: pharmaceutical expenditures, price elasticity, income elasticity, urban households, Kermanshah Province
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