Assessing the relationship between out-of-pocket spending on blood pressure and diabetes medication and household catastrophic health expenditure: Evidence from Pakistan

Background: Treatment of non-communicable diseases (NCDs) in low-and-middle-income countries (LMICs) is costly and could expose households to financial hardship and vulnerability. This paper examines the association between medication costs of two major NCDs - hypertension (blood pressure) and diabetes, and household-level incidences of catastrophic health expenditure (CHE) in a South Asian LMIC, Pakistan. Methods: The study analyzes self-reported blood pressure and diabetes (BPD) medication expenditure from the latest version (2015-16) of the Household Integrated Economic Survey (HIES) of Pakistan, a nationally representative survey of 24,238 households. The incidence of CHE is defined as households' out-of-pocket (OOP) medical expenditure exceeding 10% of the total household expenditure. Using a linear probability model, we estimate the adjusted differences in CHE incidence between households that are spending and 'not' spending on BPD medication. We also analyze several hypothetical scenarios of BPD medication cost coverage, and compare the estimated CHE incidences of respective scenarios with the status quo. Results: We find that the average monthly medical expenditure, and average medical expenditure share are significantly higher for households spending on BPD medication, compared to households 'not' spending. The incidence of CHE is found 6.7 percentage point higher for the households consuming BPD medication, after controlling for relevant socioeconomic attributes. If 25, 50, and 100% of the BPD medication OOP cost is covered, then the CHE incidence would reduce respectively by 5.9, 12.7, and 21.4% compared to the status quo. Conclusion: Medication cost for managing two major NCDs and household catastrophic health expenditure have strong associations. The findings inform policies toward ensuring access to necessary healthcare services, and protecting households from NCD treatment related financial hardship.