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Regional variation in prescription drug spending: Evidence from regional migrants in Sweden

Abstract There is substantial variation in drug spending across regions in Sweden, which can be justified if caused by differences in health need, but an indication of inefficiencies if primarily caused by differences in place-specific supply-side factors. This paper aims to estimate the relative effect of individual demand-side factors and place-specific supply-side factors as drivers of geographical variation in drug spending in Sweden. We use individual-level register data on purchases of prescription drugs matched with demographic and socioeconomic data of a random sample of about 900,000 individuals over 2007–2016. The primary empirical approach is a two-way fixed effect model and...

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