Why did drug spending increase during the 1990s? A decomposition based on Swedish data

Is the Availability of Biosimilar Adalimumab Associated with Budget Savings? A Difference-in-Difference Analysis of 14 Countries

OBJECTIVE

The aim was to assess the influence of the presence of biosimilar adalimumab on adalimumab budget savings in 14 high- and upper-middle-income countries.

METHODS

This study analyzed Multinational Integrated Data Analysis System (MIDAS)-IQVIA data from the fourth quarter (Q4) of 2018 to the Q4 of 2019, comparing adalimumab expenditure (in United States dollars) and consumption (in standard units [SU]) across 14 countries (Australia, Austria, Brazil, Canada, France, Germany, Italy, Japan, Korea, Singapore, South Africa, Spain, Sweden, and Taiwan). The countries were divided into two groups based on the availability of adalimumab biosimilars during the study period. A difference-in-difference design was employed to analyze the groups, focusing on changes from Q4 2018 to Q4 2019. Additionally, changes in adalimumab expenditure were decomposed into price, quantity, and drug mix during the study period.

RESULTS

Among countries with adalimumab biosimilars, there was a significant decrease in expenditure (- $371.0 per gross domestic product per capita; p = 0.03) over four quarters, while the consumption significantly increased (1.0 SU per 1000 population; p = 0.02). This was consistent with visual observations and differed from countries without adalimumab biosimilar. Sensitivity analysis with a narrowed list of countries (12 high-income countries) showed a consistent trend. Adalimumab expenditure decreased by 14% during the study period in countries where adalimumab biosimilars were available, mainly due to the price changes (Pt = 0.85; - 15%) and the drug-mix effect (εt  = 0.88; - 12%). Yet, adalimumab expenditure (Et = 1.04; +4%) changed in a quantity-dependent manner (Qt = 1.06; +6%) in countries where adalimumab biosimilars were absent.

CONCLUSION

The availability of biosimilars was associated with a decrease in adalimumab expenditure without compromising the consumption of adalimumab.

Determinants of Growth in Prescription Drug Spending Using 2010-2019 Health Insurance Claims Data

Background: Despite policies to manage prescription drug spending and ensure accessibility, prescription drug spending has continued to increase in South Korea. Using nationwide claims data, this study analyzed trends in total pharmaceutical expenditures and pharmaceutical expenditures by drug classification.

Methods: We conducted a retrospective population-based study using the Korean National Health Insurance claims database from January 2010 through December 2019. Pharmaceuticals were categorized as new drugs, continued drugs, and abandoned drugs. Prescription drug spending was calculated using the components of price and quantity for individual products in successive two-year periods, to obviate the need to consider changes over time.

Results: Total pharmaceutical expenditures increased by 54.2% from 2010 to 2019 (from USD 11.3 billion to USD 17.4 billion). The average annual growth rate was 4.9% overall (the 4% rate for continued drugs was decomposed into −3.5% for the price of drugs, 8.0% for the quantity of drugs, and −0.5% for mixed effects, a measure of changes in drug treatment patterns). The trends were generally consistent. Particularly sharp increases in expenditures were found for groups L (antineoplastic and immunomodulating agents), C (cardiovascular system drugs), and A (alimentary tract and metabolism drugs).

Conclusions: Since increased prescription drug spending was primarily driven by an increase in the quantity of drugs used, consumer-focused policies to reduce drug use are necessary.

Trends in medicines procurement by the Brazilian federal government from 2006 to 2013

The costs of medicines pose a growing burden on healthcare systems worldwide. A comprehensive understanding of current procurement processes provides strong support for the development of effective policies. This study examined Brazilian Federal Government pharmaceutical procurement data provided by the Integrated System for the Administration of General Services (SIASG) database, from 2006 to 2013. Medicine purchases were aggregated by volume and expenditure for each year. Data on expenditure were adjusted for inflation using the Extended National Consumer Price Index (IPCA) for December 31, 2013. Lorenz distribution curves were used to study the cumulative proportion of purchased therapeutic classes. Expenditure variance analysis was performed to determine the impact of each factor, price and/or volume, on total expenditure variation. Annual expenditure on medicines increased 2.72 times, while the purchased volume of drugs increased 1.99 times. A limited number of therapeutic classes dominated expenditure each year. Drugs for infectious diseases drove the increase in expenditures from 2006 to 2009 but were replaced by antineoplastic and immunomodulating agents beginning in 2010. Immunosuppressants (L04), accounted for one third of purchases since 2010, showing the most substantial growth in expenditures during the period (250-fold increase). The overwhelming price-related increase in expenditures caused by these medicines is bound to have a relevant impact on the sustainability of the pharmaceutical supply system. We observed increasing trends in expenditures, especially in specific therapeutic classes. We propose the development and implementation of better medicine procurement systems, and strategies to allow for monitoring of product price, effectiveness, and safety. This must be done with ongoing assessment of pharmaceutical innovations, therapeutic value and budget impact.

Factors influencing the variation in GMS prescribing expenditure in Ireland

BACKGROUND

Pharmaceutical expenditure growth is a familiar feature in many Western health systems and is a real concern for policymakers. A state funded General Medical Services (GMS) scheme in Ireland experienced an increase in prescription expenditure of 414 % between 1998 and 2012. This paper seeks to explore the rationale for this growth by investigating the composition (Anatomical Therapeutic Chemical (ATC) Group level 1 & 5) and drivers of GMS drug expenditure in Ireland in 2012.

METHODS

A cross-sectional study was carried out on the Health Service Executive-Primary Care Reimbursement Service (HSE-PCRS) population prescribing database (n = 1,630,775). Three models were applied to test the association between annual expenditure per claimant whilst controlling for age, sex, region, and the pharmacology of the drugs as represented by the main ATC groups.

RESULTS

The mean annual cost per claimant was €751 (median = €211; SD = €1323.10; range = €3.27-€298,670). Age, sex, and regions were all significant contributory factors of expenditure, with gender having the greatest impact (β = 0.107). Those aged over 75 (β =1.195) were the greatest contributors to annual GMS prescribing costs. As regards regions, the South has the greatest cost increasing impact. When the ATC groups were included the impact of gender is diluted by the pharmacology of the products, with cardiovascular prescribing (ATC 'C') most influential (β = 1.229) and the explanatory power of the model increased from 40 % to 60 %.

CONCLUSION

Whilst policies aimed at cost containment (co-payment charges; generic substitution; reference pricing; adjustments to GMS eligibility) can be used to curtail expenditure, health promotional programs and educational interventions should be given equal emphasis. Also policies intended to affect physicians' prescribing behaviour include guidelines, information (about price and less expensive alternatives) and feedback, and the use of budgetary restrictions could yield savings in Ireland and can be easily translated to the international context.

Key Components of Increased Drug Expenditure in South Korea: Implications for the Future

BACKGROUND

The cost of pharmaceuticals has increased rapidly in Korea in recent years. Expenditure is likely to grow further with the policy of expanding National Health Insurance coverage for the following four disease areas: cerebrovascular and cardiovascular disease, rare diseases, and cancer. Consequently, there is a need to analyze the different components leading to this increased expenditure as a basis for suggesting future reforms in Korea.

OBJECTIVE

To quantify the impact of new and established drugs on the growth of total drug spending in South Korea in recent years, specially focusing on the differentiated components of drug spending. These include treatment expansion and drug-mix effects (switching from cheaper drugs to expensive ones and vice versa).

METHODS

A model was proposed and used to assess the impact of both new and existing drugs on changes in price, quantity, and drug mix over the 5-year period in Korea from 2006 to 2010. The database used was the National Health Insurance claims data, which covers about 97% of the total population of Korea.

RESULTS

Overall drug spending increased 1.43-fold from 2006 to 2010. Drug-mix effect (ε_t = 1.32) was the main factor contributing to increased drug spending, followed by increased drug utilization (Q_t = 1.26). For existing drugs, treatment expansion (Q_I) and drug-mix effect (ε_I) were measured at 1.28 and 1.24, respectively, while those of new drugs were 1.02 (Q_N) and 1.03 (ε_N). Therefore, existing drugs have a much greater effect on drug spending than do new drugs. According to the Anatomical Therapeutic Classification, drug spending rose most significantly for the "sensory organs" class of drugs (E_t = 1.78) followed by the "various" class (E_t = 1.68). For existing drugs in the sensory organs class (S), drug-mix effect (ε_I) was measured at 0.96. This implies that expensive drugs among existing drugs were replaced by cheaper ones. However, the quantity prescribed (Q_I) substantially increased by 1.88-fold. New drugs within this class that were more expensive than existing ones were also prescribed (ε_N = 1.09), further increasing drug expenditure in Korea.

CONCLUSIONS

We found contrasting results from previous studies. The drug-mix effect and existing drugs made the largest contribution to drug spending growth rather than new drugs. Policies targeting drug mix, such as promoting cost-effective prescription and rational use of drugs, including the use of cheaper cost generics without compromising care, should be primarily considered to help contain future drug expenditure.

Increasing Anti-Infective Drug Expenditure in Tianjin, China: A Decomposition Analysis

OBJECTIVE

This study aimed to explore the driving factors of the increasing anti-infective drug expenditures in Tianjin, China, and to provide evidence-based suggestions for policymakers.

METHODS

Data were extracted from inpatient records in Urban Employee Basic Medical Insurance data of Tianjin, China, from 2003 January to December 2007. Expenditure increase for a basket of 63 constantly used anti-infective drugs was decomposed into three broad categories: price effects, quantity effects, and therapeutic choices. Furthermore, the injection anti-infective drug expenditures from 2006 to 2007 were decomposed into six determinants.

RESULTS

From 2003 January to December 2007, the expenditure for a fixed basket of drugs increased by 9%. The driving factors were therapeutic choices and quantity effects; each increased 48% and 10%, respectively. The relative price decreased by 33% during the study period. After adding new drugs to the formulary in 2005, the rate of increase in drug expenditure was 28% from 2006 to 2007; the driving factors were still therapeutic choice (16.8%) and quantity effects (14.9%).

CONCLUSIONS

Therapeutic choice transferring from cheap drugs to expensive ones, rather than the price, was the main driving factor for increasing expenditures. Policymakers need to pay more attention to rationalize physicians' prescribing behavior to control the expenditure.

The impact of increasing polypharmacy on prescribed drug expenditure-a register-based study in Sweden 2005-2009

OBJECTIVES

To analyse the impact of the observed increase in the prevalence in polypharmacy on the development of prescribed drug expenditure (PDE) in a national population during five years.

METHODS

A register-based study of all prescribed drugs and PDE for the entire Swedish population during a 3-month period in 2005 and 2009, respectively. The prevalence of "polypharmacy" and "excessive polypharmacy" was defined as the proportion of patients receiving five or more (PD≥5) and ten or more (PD≥10) prescribed drugs during a 3-month period, respectively.

RESULTS

Between 2005 and 2009, the prevalence of polypharmacy increased by 8.3% (from 11.1% to 12.0%), and the prevalence of excessive polypharmacy by 9.9% (from 2.4% to 2.6%). Total PDE increased by 4.8% in real prices. For the group of patients with polypharmacy and excessive polypharmacy, PDE increased by 6.2%, and 7.3%, respectively. A simulation, in which the increase in polypharmacy was neutralised, resulted in no increase in total PDE.

CONCLUSIONS

The increase in the prevalence of polypharmacy has a substantial impact on the increase in PDE and can explain the entire increase in PDE in Sweden during 2005 to 2009. For clinicians and healthcare stakeholders, it is important to monitor and guidance the further development in multiple medication therapy, so that the cost associated with increasing polypharmacy will not exceed its benefits.

Economic benefits of sponsored clinical trials on pharmaceutical expenditures at a medical center in Taiwan

Concerns exist regarding the additional cost of patient care when patients are enrolled in clinical trials at hospitals. To assess the avoidance of drug costs by conducting sponsored clinical trials, a retrospective analysis evaluating drug cost avoidance in all sponsored clinical trials was conducted in 2008 at the most prominent medical center in Taiwan. The National Health Insurance (NHI) reimbursement prices of either the investigated drugs or the standardized drug therapy for each specific disease were used to calculate the cost avoidance. Drug cost avoidance from sponsored clinical trials per year, per trial, per patient, in different therapeutic areas, and in different phases was analyzed. Three quarters of the cost avoidance in drug expenditures from 194 sponsored clinical trials were estimated. All cost values are in US Dollars. Around $11.2 million was avoided at the center in 2008. The average value of cost avoidance was $58,000/trial-year or $3,900/participant-year. The early-phase trials and phase III trials accounted for 25% and 56% of all trials, respectively, while they constituted 32% and 49% of the total costs avoided, respectively. The most frequently conducted and highest cost-avoiding trials were those for antineoplastic agents, especially targeted therapy which accounted for 85% of the total cost avoidance of anti-cancer trials. This study demonstrates the profoundly positive economic impact on the healthcare system in Taiwan by sponsored clinical trials. To understand the trend of economic benefits of the trials on pharmaceutical expenditure, it would be important to analyze the cost avoidance of trials regularly in an institution.

The impotence of price controls: failed attempts to constrain pharmaceutical expenditures in Greece

BACKGROUND

While the prices of pharmaceuticals are relatively low in Greece, expenditure on them is growing more rapidly than almost anywhere else in the European Union.

OBJECTIVE

To describe and explain the rise in drug expenditures through decomposition of the increase into the contribution of changes in prices, in volumes and a product-mix effect.

METHODS

The decomposition of the growth in pharmaceutical expenditures in Greece over the period 1991-2006 was conducted using data from the largest social insurance fund (IKA) that covers more than 50% of the population.

RESULTS

Real drug spending increased by 285%, despite a 58% decrease in the relative price of pharmaceuticals. The increase in expenditure is mainly attributable to a switch to more innovative, but more expensive, pharmaceuticals, indicated by a product-mix residual of 493% in the decomposition. A rising volume of drugs also plays a role, and this is due to an increase in the number of prescriptions issued per doctor visit, rather than an increase in the number of visits or the population size.

CONCLUSIONS

Rising pharmaceutical expenditures are strongly determined by physicians' prescribing behaviour, which is not subject to any monitoring and for which there are no incentives to be cost conscious.

Price regulation, new entry, and information shock on pharmaceutical market in Taiwan: a nationwide data-based study from 2001 to 2004

Background

Using non-steroidal anti-inflammatory drugs (NSAIDs) as a case, we used Taiwan's National Health Insurance (NHI) database, to empirically explore the association between policy interventions (price regulation, new drug entry, and an information shock) and drug expenditures, utilization, and market structure between 2001 and 2004.

Methods

All NSAIDs prescribed in ambulatory visits in the NHI system during our study period were included and aggregated quarterly. Segmented regression analysis for interrupted time series was used to examine the associations between two price regulations, two new drug entries (cyclooxygennase-2 inhibitors) and the rofecoxib safety signal and expenditures and utilization of all NSAIDs. Herfindahl index (HHI) was applied to further examine the association between these interventions and market structure of NSAIDs.

Results

New entry was the only variable that was significantly correlated with changes of expenditures (positive change, p = 0.02) and market structure of the NSAIDs market in the NHI system. The correlation between price regulation (first price regulation, p = 0.62; second price regulation, p = 0.26) and information shock (p = 0.31) and drug expenditure were not statistically significant. There was no significant change in the prescribing volume of NSAIDs per rheumatoid arthritis (RA) or osteoarthritis (OA) ambulatory visit during the observational period. The market share of NSAIDs had also been largely substituted by these new drugs up to 50%, in a three-year period and resulted in a more concentrated market structure (HHI 0.17).

Conclusions

Our empirical study found that new drug entry was the main driving force behind escalating drug spending, especially by altering the market share.

Antipsychotics and antidepressants: an analysis of cost growth in Finland from 1999 to 2005

BACKGROUND

Antipsychotics and antidepressants are among the fastest-growing therapeutic classes, but the reasons behind recent cost growth are not clear.

OBJECTIVE

The aim of this study was to assess the explicit factors behind ambulatory antipsychotic and antidepressant cost growth in Finland, as well as the relative importance of the factors associated with the drug group-specific cost growth.

METHODS

The data used in this study were retrospectively collected from the Finnish National Health Insurance's register on reimbursed drug purchases. The study period ranged from January 1, 1999, through December 31, 2005, and the obtained data included information on the patient identity number, total cost of the purchase, Anatomic Therapeutic Chemical classification code of the purchased product, and defined daily dose amount of the purchase. Using the retrieved data, antipsychotic and antidepressant cost growth was disaggregated into price and volume factors to create a formula that includes factors about the size of the population, patients per population, volume of treatment per patient, and the mean cost per 1 day of treatment. The relative effect of the factors associated with the drug group-specific cost growth was also examined. Because the purpose of this work was to analyze the factors contributing to the cost growth, we disregarded factors that were negative.

RESULTS

During the study period, the proportion of antipsychotic users of the total population decreased from 2.4% to 2.2% and the mean cost per 1 day of treatment with antipsychotics increased from euro1.37 to euro2.94. The proportion of antidepressant users increased from 4.8% to 6.3%, and mean cost per 1 day of treatment decreased from euro1.06 to euro0.79. In 1999, the consumption of second-generation antipsychotics accounted for 22% of total consumption, and in 2005 their proportion was 62%. Drug choices among anti-depressants did not change substantially. The total cost growth of antipsychotics and antidepressants was 211% and 19%, respectively. Approximately 80% of the antipsychotic cost growth resulted from the rise in the mean cost per 1 day of treatment. The increase in patients per population accounted for approximately 60% of the antidepressant cost growth.

CONCLUSION

This retrospective analysis found that the factors associated with the growing antipsychotic and antidepressant expenditures in Finland from 1999 through 2005 varied between these 2 drug classes.

Driving forces behind increasing cardiovascular drug utilization: a dynamic pharmacoepidemiological model

AIMS

To investigate the driving forces behind increasing utilization of cardiovascular drugs.

METHODS

Using register data, all Danish residents as of 1 January 1996 were followed until 2006. Cohort members were censored at death or emigration. Cardiovascular drug utilization on the individual level was traced, applying registered out-of-hospital dispensing. The impact of population ageing on cardiovascular drug utilization was investigated using standardized intensities and prevalences. Based on a three-state (untreated, treated and dead) semi-Markov model, we explored to what extent increasing treatment prevalence was driven by changing incidence, discontinuation and mortality. Expected treatment prevalences were modelled, applying stratum-specific cohort prevalence in 1996 along with incidence, discontinuation and drug user mortality either throughout 1996-2004 or at fixed 1996 levels.

RESULTS

Treatment prevalence (ages > or =20 years) with cardiovascular drugs increased by 39% during 1996-2005 from 192.4 to 256.9 per 1000 inhabitants (95% confidence interval 256.5, 257.3). Treatment intensity grew by 109% from 272 to 569 defined daily doses 1000(-1) day(-1). Population 'middle-ageing' accounted for 11.5 and 20.3%, respectively. Increasing treatment incidence was the main driver of the rising treatment prevalence in most drug categories. Declining discontinuation drove some of the growth, declining drug user mortality less. Even with fixed incidence in the model, treatment prevalence continued to increase.

CONCLUSIONS

Age-related increases in treatment intensity and prevalence, rather than population ageing, drove the increasing treatment intensity with cardiovascular drugs. Increasing treatment prevalence in subgroups was primarily caused by increasing incidence. Due to pharmacoepidemiological disequilibrium, treatment prevalence will continue to grow even with unchanged incidence.

"Price management" and its impact on hospital pharmaceutical expenditure and the availability of medicines in New Zealand hospitals

OBJECTIVES

In 2002, the Pharmaceutical Management Agency (PHARMAC) began negotiating new price contracts for 90% of hospital pharmaceuticals on behalf of all New Zealand (NZ) public hospitals ("price management"[PM]). The present study was undertaken to examine the impact of 3 years of PM on hospital pharmaceutical expenditure, and the impact of the new contracts on the availability of medicines.

METHODS

Annual savings for 29 major public hospitals (financial years 2003/4 to 2005/6) were calculated from the data from 11 hospitals and data from PHARMAC. Inpatient and total hospital pharmaceutical expenditure (IPE, THPE) (2000/1 to 2005/6) were calculated from the data from 23 hospitals. Hospital pharmaceutical expenditure (2000/1 to 2005/6) was compared with community pharmaceutical expenditure (CPE) in NZ, and with THPE in the UK, Canada, Norway, and Sweden. Surveys were undertaken (2004, 2005) to examine any changes in medicine availability resulting from the new contracts.

RESULTS

Annual savings were NZ$7.84 million (m) to NZ$13.45m (2003/4 to 2005/6). Growth in IPE slowed for all hospitals in 2003 to 2004. Mean growth was higher for IPE and THPE than for CPE (8.8%, 9.7% vs. 1.9%). Mean growth in THPE appeared slightly lower in NZ (9.6%) and Norway (7.3%) than in the UK 14%, Sweden 12.5%, or Canada 10.2%. Some availability problems occurred with new contract items ("out-of-stocks"; products perceived as inferior). Problems were usually resolved in weeks, but some took more than a year.

CONCLUSION

PM was moderately successful saving NZ$8m to NZ$13m (6-8%) in 2003/4 to 2005/6 and slowing growth in IPE in 2003/4. Further research should examine whether the favorable economic effects can be sustained while unfavorable effects are minimized.

Recent national and regional drug reforms in Sweden: implications for pharmaceutical companies in Europe

With an aging population and increased prevalence of chronic diseases, such as obesity and diabetes mellitus, drug reforms are needed across Europe to ensure the continued provision of comprehensive healthcare. It is also a challenge, with the limited resources available, to fund new innovative drugs that significantly improve patient health. Recent national and regional reforms in Sweden have moderated the rate of increase in drug expenditure, despite increased volumes of drug use and the launch of new, expensive drugs. National reforms include the adoption of economic principles when assessing the value and subsequent reimbursement of new and existing drugs, as well as reforms to obtain low prices for generic drugs. Regional reforms aim to encourage the rational use of medicines through the establishment of drug and therapeutic committees, development of guidelines, academic detailing, continuous benchmarking of prescribing patterns, and financial incentives. Some of these reforms provide examples to other European countries, whilst others duplicate existing measures. As such, we believe other European countries can benefit from an analysis of the Swedish reforms. We believe the pharmaceutical industry can also benefit from this analysis by working with key regional payers involved with developing and implementing the reforms as they moderate and refine their future activities, including finding acceptable ways of introducing new expensive drugs.

Effects of essential medicines on cardiovascular products available for the market in Thailand

National List of Essential Medicines (NLEM) is an important policy on drugs, which also covers the drug availability. However, the link between the list and the availability of medicine products for the market is not clear. The objectives of this study were to examine the effects of essential medicines (EM) on the patterns and values of cardiovascular products available for the market in Thailand. Issues investigated were proportions of products, expansions of generic names, involvement of producers and relation between the numbers of EM generic names and production values of products. Data sources were NLEM, Thailand Index of Medical Specialities and drug statistics by Food and Drug Administration (FDA). Results revealed the availability of 623 products from 127 generic names. On average, EM products showed significantly greater proportions and EM generic names demonstrated larger expansions than non-EM. Domestic producers contributed to List A products by a significantly higher percentage than foreign, but only foreign producers introduced List D products. There was a positive and significant relation between the numbers of EM generic names and the production values of products. In conclusion, it was clear that EM had effects on the patterns and the values of cardiovascular products available for the market. Subsequent prices and expenditure due to the patterns and values of product availability could be low or high. These findings could be advantageous in using essential medicines as a means to avoid the negative consequences by addressing the significance of its kinds and numbers when selecting it in the list.

Impact of a generic substitution reform on patients' and society's expenditure for pharmaceuticals

Sweden's pharmaceutical expenditure has increased during the last decades. On 1 October 2002 mandatory generic substitution was introduced in Sweden with the purpose to reduce the growth in pharmaceutical expenditure. The aim of the present study was to investigate if the implementation of generic substitution was associated with changes in patients' expenses and reimbursed cost for prescribed pharmaceuticals included in the Swedish Pharmaceutical Benefits Scheme (PBS). Monthly pharmacy sales data was obtained from the National Corporation of Swedish Pharmacies (Apoteket AB). The study period ranged between 1 January 2000 and 31 December 2004. Changes in pharmaceutical expenditure associated with the introduction of generic substitution were analysed with a linear segmented regression. The study comprised outpatient prescription pharmaceuticals encompassed by PBS for Sweden in total and each county council. Two different data sets were analysed. The first comprised all prescribed pharmaceuticals. The second contained only pharmaceuticals on regular prescriptions (i.e. exclusion of multidose dispensed drugs). Changes in patient co-payment per 1000 inhabitants and working day and subsidised cost per 1000 inhabitants and working day associated with the introduction of generic substitution were analysed. Expenditure was expressed in Swedish krona, SEK (SEK 1=US$ 0.14/euro 0.11, 7 July 2006). The Swedish Consumer Price Index was used to inflation-adjust expenditures with 2004 as base. The introduction of generic substitution was associated with a significant change in slope for patient co-payment in both all prescribed pharmaceuticals and pharmaceuticals on regular prescriptions (p<0.005) for Sweden in total. The slope shifted direction from a slight increase before the reform into a decline after the reform was implemented. This was also found for the average slope of patient co-payment for all county councils (p<0.0001). The introduction of generic substitution was associated with a statistically significant shift in slope for subsidised cost for Sweden in total (p<0.001). The slope shifted from a monthly increase before October 2002 to a monthly decline for all prescribed pharmaceuticals afterwards. Similar results were found for the average slope of subsidised cost for all county councils both for all prescribed pharmaceuticals and pharmaceuticals on regular prescriptions (p<0.0001). The introduction of generic substitution was associated with a shift in trend from an increase into a decrease both for patients' and society's expenditures. This suggests that generic substitution has contributed to a reduction in the growth of pharmaceutical expenditure.

Decentralized responsibility for costs of outpatient prescription pharmaceuticals in Sweden. Assessment of models for decentralized financing of subsidies from a management perspective

In this study, models for decentralization of responsibility for costs of subsidised outpatient prescription pharmaceuticals within the county councils in Sweden were studied. The aims of the decentralization were to cut the escalating costs associated with risk sharing mechanisms on a national level and to integrate utilization of drugs into the priority process in health care. History of development and the characteristics of the solutions on county level were identified, described and analysed from taped interviews with relevant persons in central management positions in the selected counties. Information was supplemented from documentation. Two main models were found, a population based model and a prescriber based. In the population based model, family medicine in primary care was responsible for subsidies of drugs classified as "basic" (80%) regardless of prescriber. In this model, hospital departments were responsible for the "special" drugs (20%) regardless of prescriber. In the prescriber based model each provider was responsible for costs of its own prescribing. We found that the prescriber based model was chosen for the strong incentives for cost containment, while the population based model was expected to focus more on service to patients. This reform was based on the assumption that incentives for cost containment on an organisational level are effective. Experiences from other reforms in health care support this hypothesis. This means that there is a risk that cost containment jeopardises medical decisions on patient level.

Booming Prescription Drug Expenditure

BACKGROUND

Prescription drug expenditures in North America have nearly doubled in the past 5 years, creating intense pressure for all public and private benefits managers and policymakers.

OBJECTIVE

The objective of this study was to describe age-specific drug expenditure trends from 1996 to 2002 for the Canadian province of British Columbia.

STUDY DESIGN

This study shows changes in expenditures per capita quantified for 5 age categories: residents aged 0 to 19, 20 to 44, 45 to 64, 65 to 84, and 85 and older. The cost impacts of 7 determinants of prescription drug expenditures are quantified.

DATA

This study describes population-based, patient-specific pharmaceutical data showing the type, quantity, and cost of every prescription drug purchased by virtually all residents of British Columbia.

RESULTS

Population-wide expenditures per capita grew at a rate of 11.6% per annum. Growth was primarily driven by the selection of more costly drugs per course of treatment and increases in the number concomitant treatments received per patient. Population aging did not have a major impact on expenditures. However, expenditure per capita grew most rapid among residents aged 45 to 64, the cohort that expended most over the period. The aging of this demographic cohort may threaten the financial viability of age-based drug benefit programs.