We have taken advantage of a natural experiment to measure the impact of the phased abolition of prescription co-payments in Wales. We investigated three study periods covering the phased abolition: from £6 to £4, £4 to £3 and £3 to £0. A difference-in-difference modelling was adopted and applied to monthly UK general practice level dispensing data on 14 selected medicines which had the highest percentage of items dispensed subject to a co-payment prior to abolition. Dispensing from a comparator region (North East of England) with similar health and socio-economic characteristics to Wales, and where prescription co-payments continued during the study periods, were used to isolate any non-price effects on dispensing in Wales. Results show a small increase in dispensing of 14 selected medicines versus the comparator. Compared with NE England, monthly average Welsh dispensing was increased by 11.93 items (7.67%; 95% CI: 7.2% to 8.1%), 6.37 items (3.38%; 95% CI: 2.9% to 3.7%) and 9.18 items (4.54%; 95% CI: 4.2% to 4.9%) per practice per 1000 population during the periods when co-payment was reduced. Price elasticities of the selected medicines utilisation were -0.23, -0.13 and -0.04 in three analyses, suggesting the abolition of co-payment had small effect on Welsh dispensing