Drug Demand Function for Iranian Urban Households Based on Households' Budget

Background: One of the most important indicators of any society development is its health status and one of the most substantial issues in the field of community health status is its access to essential drugs so that the timely and adequate provision of essential drugs is one of the components of primary health care (PHC) principles. Objectives: This research aimed to study the influence of various factors such as drug price index, inflation rate, income, the number of physicians, etc. on the drug demand and consumption for Iranian urban households based on households' budget during 1990-2010. Patients and Methods: This research was a descriptive-analytical study which, used time-series data econometrics method to examine the relationships between the costs of drug consumption in urban households with variables such as drug price index, inflation rate, income, and tariff of the Medical staff visits. In addition, ADF test was used to show that whether variables were stationary or not. Furthermore, the OLS technique was employed to estimate the drug demand function using Eviews7 and STATA 11 software. Results: The results showed that the estimated effects of sub-specialist visits tariff and general physician visits tariff on the drug demand were positive but not significant (P > 0.05) and urban households' income and drug price index had positive and significant effects on the drug demand (P < 0.05). Conclusions: Based on the results of this research, it seems that allocating public resources in the form of providing health insurance or government subsidies can decline financial burden of drugs on patients.