The impact of financial incentives on pharmacist dispensing habits: Evidence from the british columbia product incentive plan

The Product Incentive Plan (PIP) was introduced in British Columbia in July 1990 and offered pharmacists financial incentives for generic drug substitution. Using PIP as a case study, this study analyzed pharmacist responses to financial incentives and the amount of relative savings achieved through generic substitution across five different pharmacy types and seven therapeutic classes. Data consisted of 1.5 million PharmaCare prescription insurance claims records for British Columbia seniors from January 1988 to June 1994. Linear regression was employed to model the relative savings, whereas logit regression was used to model the probability of generic substitution. Overall the PIP was responsible for a 47.5% increase in the relative savings and a 43.4% increase in the probability of generic substitution. © 2008 by Informa Healthcare USA, Inc. All rights reserved.