Distributional Effects of the 2012 Pharmaceutical Co-payment Change in Spain and Simulated Proposals for Improvement

We analyse the distributional effects of the 2012 pharmaceutical co-payment reform and eleven simulated alternative schemes in the Canary Islands. A random sample of 41,962 residents covered by the Spanish National Health System together with their individual prescription information from one year before to one after the change was used. The Concentration index (CI) was used to compare inequality in private pharmaceutical spending by income levels: CI increases from 0.03 to 0.07 for the working population, being simulation number 11 the most progressive one (CI=0.20). The use of more income ranges increases progressivity of the system slightly, although more suitable models could have been used, combining more progressivity with more sustainable pharmaceutical public expenditures.