Pharmaceutical expenditure

The public pharmaceutical budget is not sufficient to cover the needs of the population; it is therefore necessary to increase both outpatient and hospital pharmaceutical spending.

Current situation

  • Outpatient pharmaceutical expenditure:
    Outpatient pharmaceutical expenditure has been fixed at €1,945 billion annually from 2016 to 2018, through closed budgets for the next three years. However, a closed budget should at least have taken into account demographic, epidemiological and socioeconomic data such as disease prevalence and incidence, increased life expectancy, changes in insurance coverage, etc.
  • Overrun of outpatient pharmaceutical expenditure:
    The experience of recent years shows that the actual market needs for outpatient pharmaceutical care range between €2.3 and 2.5 billion. In particular, the evolution of clawback and rebate figures confirms the insufficiency of budgeted expenditure, as the total amount to be contributed by the industry has been growing every year, to stand at €630 million in 2015. This means that pharmaceutical companies now cover more than 24% of public pharmaceutical expenditure.
  • Hospital pharmaceutical expenditure:
    Similarly, the arbitrarily imposed closed budget for public hospital expenditure, at €570 million for 2016, is insufficient and raises serious concerns that the smooth operation of hospitals as well patient access to necessary treatments might be put at risk in the course of the year. As a result, there are overruns against the budget target, leading to the imposition of a clawback of about €180 million (32% of budgeted hospital expenditure).

It should be noted that hospital pharmaceutical expenditure was reduced by about 55% between 2009 and 2015, while the number of hospitalised patients increased by 31% during that period (Bi-Health, 2009-2015).

  • Increase in private pharmaceutical expenditure: Both statutory patient co-payment and out-of-pocket payments (OOPs) have grown considerably. From a weighted average of 15% in 2012, the co-payment percentage rose to 26% in 2014 on the basis of EOPYY data, rising further to 27.4% in the three months from March to May 2016 – excluding zero (0%) co-payment. This burden falls on the economically weak patients, which supports our case for a fairer co-payment system.

 

The outlook for 2016 is bleak. Pharmaceutical companies are forced to substitute for the state in its role of providing for basic needs of citizens, in order to ensure unhindered access to necessary treatments.

 

Our proposals:

  • The €1.945 billion outpatient expenditure target for the next three years is not sufficient. We therefore see a need for an expert study to determine the minimum public pharmaceutical expenditure.
  • Steady flows of public sector payments to pharmaceutical suppliers, in line with Directive 2011/7/EU requiring contractual payments to be settled within 60 calendar days, which could increase the bargaining power of suppliers vis-à-vis public healthcare providers.
  • Establishing a cap on the expenditure overrun that triggers cost-sharing between the State and pharmaceutical companies.
  • Calculation of the expenditure overrun (clawback) in producer (ex-factory) prices.
  • Integration of across-the-board rebates into a volume rebate, which will be simpler, fairer and more stable and would improve transparency and predictability for companies by establishing a single scale instead of various individual rebates.
  • Establishment and activation, on a monthly basis, of a Technical Committee for Monitoring Pharmaceutical Expenditure, with the participation of all stakeholders in the pharmaceutical supply chain and with the task of exploring immediate responses and formulating proposals to control expenditure.
  • Given the deterioration of primary healthcare, the economic crisis and the insurance situation of the population, SFEE has already submitted a number of proposals aimed to promote the use of more effective treatments and help to contain expenditure, to control prescription volumes and to ensure efficient allocation of resources until an appropriate budget level can be established. These proposals include the following:
    • Universal and mandatory implementation of prescribing guidelines for the most expensive categories of medicinal products, as a necessary condition for proper medication management, rationalisation of prescribing, containment of expenditure and good clinical practice.
    • Establishment of Patient Registries for specific categories of medicines that are dispensed through EOPYY; this would provide an inventory of relevant patients, enabling the monitoring of outcomes and a clear picture of the actual costs to the social security system.
    • Determination of appropriate SPC filters based on the indications or other therapeutic practices specified in the Summary of Product Characteristics, as well as quantity filters based on the appropriate dosage and pack of each medicinal product (for a monthly treatment), with a view to a more effective control of prescriptions. The use of filters should be universal and mandatory.
    • Retargeting expenditure control measures to encompass other, non-pharmaceutical, cost centres. Pharmaceuticals only account for 15% of total health expenditure, implying that cost-cutting measures should also target the remaining 85%. The savings to be achieved could be reallocated according to the needs of patients.
  • Uninsured and indigent citizens should be covered by a special budget line, potentially using EU funds, rather than the already curtailed pharmaceutical expenditure budget.
  • Also, there is a need for investment in prevention, treatment and health promotion programmes in order to reduce the morbidity burden in future and limit the overuse of health system resources, including overmedication.
    • In this connection, we propose the exclusion of vaccines from pharmaceutical expenditure, as vaccination of high-risk groups and the general population can prevent epidemics (e.g. H1N1) and save costs in the health system as a whole.
  • Horizon scanning: With more than 7,000 medicines in development worldwide, we can expect very good news for the treatment of diseases over the next five years. These and the new technologies being developed can deliver substantial benefits to patients, the health system and society. The pharmaceutical industry offers more and more innovative medicines and vaccines. We recognize that, in order for patients and healthcare systems to benefit from this new wave of pharmaceutical innovation, healthcare has to be affordable now and sustainable in future.
  • Utilization of IDIKA data by private agents to generate revenue (e.g. epidemiological data, covered population, growth rate of consumption of reimbursed medicines, health service usage data, etc.)
  • Sound stock management practices in hospital and EOPYY pharmacies before every clawback calculation.
  • Calculation of hospital clawback based on actual consumption rather than purchases.
  • Introduction of an electronic health card with the insured person’s medical information, including hospitalization and medication record, by Social Security Number (AMKA). Besides facilitating patients’ dealings with the public health system and EOPYY-affiliated healthcare providers, the e-health card would also help to contain health expenditure and avoid waste of resources.
  • Controlling demand volume by utilizing data from the e-prescription and reimbursement system.