According to economic theory, what should happen to the price of pharmaceuticals as insurance copays decline?

Expert Solution

Insurance co-pay implies that policy holder has to bear some amount of insurance cost. co-payment system deters insurance policy holders against availing facilities frequently even though cases are not critical.

If co-payment declines, there would be misuse of insurance facilities. Rise in availing of insurance facilities will lead to rise in demand for pharmaceuticals as well. So the price of pharmaceutical is likely to rise when copays declines.

Rahul Sunny answered 2 years ago

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