Prescription patterns of pharmaceuticals

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Economics from the NOVA – School of Business and Economics

In May 2011, Portugal signed the Memorandum of Understanding in which it guarantees a reduction in the public spending on pharmaceuticals. The aim of this research work is to analyse the possibility of hospital cost reductions in HIV, oncology and rheumatism related pharmaceutical drugs, by better practice of medical physicians. The patterns of drug prescriptions were modelled using a relative distribution, stochastic dominance analysis and an ordered probit model. It was found that there is great divergence in expenditure levels of pharmaceutical products across hospitals and medical specialties. Outlier physicians tend to maintain their prescribing behaviour, even after the introduction of feedback. Therefore, there is room to reduce hospital costs of pharmaceutical products, by better practice.