Funding and service organization to achieve universal health coverage for medicines: an economic evaluation of the best investment and services organization for the Brazilian scenario

Marina Morgado Garcia, Pamela Santos Azevedo, Andrew Mirelman, Leandro Pinheiro Safatle, Roberto Iunes, Marion Clark Bennie, Brian Godman, Augusto Afonso Guerra Junior

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Abstract

Background: There are many health benefits since 31 years after the foundation of the National Health Service (NHS) in Brazil, especially the increase in life expectancy. However, family-income inequalities, insufficient funding, and suboptimal private sector–public sector collaboration are still areas for improvement. The efforts of Brazil to achieve universal health coverage (UHC) for medicines have resulted in increased public financing of medicines and their availability, reducing avoidable hospitalization and mortality. However, lack of access to medicines still remains. Due to historical reasons, pharmaceutical service organization in developing countries may have important differences from high-income countries. In some cases, developing countries finance and promote medicine access by using the public infrastructure of health care/medical units as dispensing sites and cover all costs of medicines dispensed. In contrast, many high-income countries use private community pharmacies and cover the costs of medicines dispensed plus a fee, which includes all logistic costs. In this study, we will undertake an economic evaluation to understand the funding needs of the Brazilian NHS to reduce inequalities in access to medicines through adopting a pharmaceutical service organization similar to that seen in many high-income countries with hiring/accrediting private pharmacies. Methods: We performed an economic evaluation of a model to provide access to medicines within public funds based on a decision tree model with two alternative scenarios public pharmacies (NHS, state-owned facilities) versus private pharmacies (NHS, agreements). The analysis assumed the perspective of the NHS. We identified the types of resources consumed, the amount, and costs in both scenarios. We also performed a budget impact forecast to estimate the incremental funding required to reduce inequalities in access to essential medicines in Brazil. Findings: The model without rebates for medicines estimated an incremental cost of US$3.1 billion in purchasing power parity (PPP) but with an increase in the average availability of medicines from 65% to 90% for citizens across the country irrespective of family income. This amount places the NHS in a very good position to negotiate extensive rebates without the need for external reference pricing for government purchases. Forecast scenarios above 35% rebates place the alternative of hiring private pharmacies as dominant. Higher rebate rates are feasible and may lead to savings of more than US$1.3 billion per year (30%). The impact of incremental funding is related to medicine access improvement of 25% in the second year when paying by dispensing fee. The estimate of the incremental budget in five years would be US$4.8 billion PPP. We have yet to explore the potential reduction in hospital and outpatient costs, as well as in lawsuits, with increased availability with the yearly expenses for these at US$9 billion and US$1.4 billion PPP respectively in 2017. Interpretation: The results of the economic evaluation demonstrate potential savings for the NHS and society. Achieving UHC for medicines reduces household expenses with health costs, health litigation, outpatient care, hospitalization, and mortality. An optimal private sector–public sector collaboration model with private community pharmacy accreditation is economically dominant with a feasible medicine price negotiation. The results show the potential to improve access to medicines by 25% for all income classes. This is most beneficial to the poorest families, whose medicines account for 76% of their total health expenses, with potential savings of lives and public resources.

Original languageEnglish
Article number370
Number of pages15
JournalFrontiers in Pharmacology
Volume11
DOIs
Publication statusPublished - 14 Apr 2020

Keywords

  • Brazil
  • pharmacy organisation
  • economic model
  • universal health care

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