Objective
To estimate the own‐price elasticity of demand for naloxone, a prescription medication that can counter the effects of an opioid overdose, and predict the change in pharmacy sales following a conversion to over‐the‐counter status.
Data Sources/Study Setting
The primary data source was a nationwide prescription claims dataset for 2010‐2017. The data cover 80 percent of US retail pharmacies and account for roughly 90 percent of prescriptions filled. Additional covariates were obtained from various secondary data sources.
Study Design
We estimated a longitudinal, simultaneous equation model of naloxone supply and demand. Our primary variables of interest were the quantity of naloxone sold, measured as total milligrams sold at pharmacies, and the out‐of‐pocket price paid per milligram, both measured per ZIP Code and quarter‐year.
Data Collection/Extraction Methods
Primary data came directly from payers and processors of prescription drug claims.
Principal Findings
We found that, on average, a 1 percent increase in the out‐of‐pocket price paid for naloxone would result in a 0.27 percent decrease in pharmacy sales. We predict that the total quantity of naloxone sold in pharmacies would increase 15 percent to 179 percent following conversion to over‐the‐counter status.
Conclusions
Naloxone is own‐price inelastic, and conversion to over‐the‐counter status is likely to lead to a substantial increase in total pharmacy sales.