Moral hazard and prescription medicine use in Australia - The patient perspective

Evan Doran*, Jane Robertson, David Henry

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

28 Citations (Scopus)


All Australian citizens are provided affordable access to prescription medicines through the nation's system of universal pharmaceutical subsidies - the pharmaceutical benefits scheme. The rapid increase in pharmaceutical related expenditure has generated the concern that Australians are taking advantage of prescription subsidies and are using more medicines than are necessary, thereby creating a 'moral hazard'. This concern is predicated on a number of assumptions about patient behaviour rather than on empirical observation. These assumptions amount to a view that patients are consumers who treat prescription medicines as common goods subject to informed and rational calculation of the cost and benefits of their use. This paper reports the findings of an in-depth interview study undertaken to explore how prescription cost influences Australians' medicine use. Qualitative data were analysed to compare medicine users' descriptions of the role of prescription cost in medicine use against the assumptions that underlie the belief in moral hazard. Moral hazard did not appear to be significantly operating in the accounts of medicine use collected for this study. Interviewees' accounts of medicine use revealed an act characterised by ambivalence, a mix of desire and antipathy, faith and suspicion. Medicines appeared in interviewees' accounts as both pharmacologically and symbolically potent substances, which despite their familiarity as objects, are often mysterious to non-expert patients. Cost appeared as a secondary factor in patients' decision to access a prescription medicine. Using a prescription was predicated on the medicine being necessary, with necessity typically established by an expert doctor prescribing the medicine. Prescription medicines did not appear as 'common goods' where subsidised access motivates a 'consumer' to demand more or make the prospect of prescription use more attractive or necessary.

Original languageEnglish
Pages (from-to)1437-1443
Number of pages7
JournalSocial Science and Medicine
Issue number7
Publication statusPublished - Apr 2005
Externally publishedYes


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