Projecting pharmaceutical expenditure in EU5 to 2021: adjusting for the impact of discounts and rebates

Jamie Espin, Michael Schlander, Brian Godman, Pippa Anderson, Jorge Mestre-Ferrandiz , Isabelle Borget, Adam Hutchings, Steven Flostrand, Adam Parnaby, Claudio Jommi

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Background: Within (European) healthcare systems, the predominant goal for pharmaceutical expenditure is cost containment. This is due to a general belief among healthcare policy makers that pharmaceutical expenditure – driven by high prices – will be unsustainable unless further reforms are enacted. Objective: The aim of this paper is to provide more realistic expectations of pharmaceutical expenditure for all key stakeholder groups, by estimating pharmaceutical expenditure at “net” prices. We also aim to estimate any gaps developing between list and net pharmaceutical expenditure, for the EU5 countries (i.e. France Germany Italy Spain and the United Kingdom). Methods: We adjust an established forecast of pharmaceutical expenditure for the EU5 countries, from 2017 to 2021, by reflecting discounts and rebates not previously considered i.e. we move from “list” to “net” prices, as far as data are available. Results: We find an increasing divergence between expenditure measured at list and net prices. When the forecasts for the five countries are aggregated, the EU5 (unweighted) average historical growth (2010 – 2016) rate falls from 3.4% compound annual growth rate (CAGR) at list to 2.5% at net. For the forecast, the net growth rate is estimated at 1.5% versus 2.9% at list. Conclusions: The results from this study suggest that future growth in pharmaceutical expenditure in Europe is likely to be (i) lower than previously understood from forecasts based on list prices; and (ii) below predicted healthcare expenditure growth in Europe and in line with long-term economic growth rates. For policy makers concerned about the sustainability of pharmaceutical expenditure, this study may provide some comfort, in that the perceived problem is not as large as expected.
LanguageEnglish
Pages803-817
Number of pages15
JournalApplied Health Economics and Health Policy
Volume16
Issue number6
Early online date7 Aug 2018
DOIs
Publication statusPublished - 31 Dec 2018

Fingerprint

Health Expenditures
Pharmaceutical Preparations
Growth
Administrative Personnel
Delivery of Health Care
Expenditure
Pharmaceuticals
Rebates
Discount
Economic Development
Cost Control
Spain
Italy
France
Germany

Keywords

  • economic forecast
  • pharmaceutical expenditure
  • pharmacoeconomics
  • rebates

Cite this

Espin, Jamie ; Schlander, Michael ; Godman, Brian ; Anderson, Pippa ; Mestre-Ferrandiz , Jorge ; Borget, Isabelle ; Hutchings, Adam ; Flostrand, Steven ; Parnaby, Adam ; Jommi, Claudio. / Projecting pharmaceutical expenditure in EU5 to 2021 : adjusting for the impact of discounts and rebates. In: Applied Health Economics and Health Policy. 2018 ; Vol. 16, No. 6. pp. 803-817.
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Espin, J, Schlander, M, Godman, B, Anderson, P, Mestre-Ferrandiz , J, Borget, I, Hutchings, A, Flostrand, S, Parnaby, A & Jommi, C 2018, 'Projecting pharmaceutical expenditure in EU5 to 2021: adjusting for the impact of discounts and rebates' Applied Health Economics and Health Policy, vol. 16, no. 6, pp. 803-817. https://doi.org/10.1007/s40258-018-0419-1

Projecting pharmaceutical expenditure in EU5 to 2021 : adjusting for the impact of discounts and rebates. / Espin, Jamie; Schlander, Michael; Godman, Brian; Anderson, Pippa; Mestre-Ferrandiz , Jorge; Borget, Isabelle; Hutchings, Adam; Flostrand, Steven; Parnaby, Adam; Jommi, Claudio.

In: Applied Health Economics and Health Policy, Vol. 16, No. 6, 31.12.2018, p. 803-817.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Projecting pharmaceutical expenditure in EU5 to 2021

T2 - Applied Health Economics and Health Policy

AU - Espin, Jamie

AU - Schlander, Michael

AU - Godman, Brian

AU - Anderson, Pippa

AU - Mestre-Ferrandiz , Jorge

AU - Borget, Isabelle

AU - Hutchings, Adam

AU - Flostrand, Steven

AU - Parnaby, Adam

AU - Jommi, Claudio

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Y1 - 2018/12/31

N2 - Background: Within (European) healthcare systems, the predominant goal for pharmaceutical expenditure is cost containment. This is due to a general belief among healthcare policy makers that pharmaceutical expenditure – driven by high prices – will be unsustainable unless further reforms are enacted. Objective: The aim of this paper is to provide more realistic expectations of pharmaceutical expenditure for all key stakeholder groups, by estimating pharmaceutical expenditure at “net” prices. We also aim to estimate any gaps developing between list and net pharmaceutical expenditure, for the EU5 countries (i.e. France Germany Italy Spain and the United Kingdom). Methods: We adjust an established forecast of pharmaceutical expenditure for the EU5 countries, from 2017 to 2021, by reflecting discounts and rebates not previously considered i.e. we move from “list” to “net” prices, as far as data are available. Results: We find an increasing divergence between expenditure measured at list and net prices. When the forecasts for the five countries are aggregated, the EU5 (unweighted) average historical growth (2010 – 2016) rate falls from 3.4% compound annual growth rate (CAGR) at list to 2.5% at net. For the forecast, the net growth rate is estimated at 1.5% versus 2.9% at list. Conclusions: The results from this study suggest that future growth in pharmaceutical expenditure in Europe is likely to be (i) lower than previously understood from forecasts based on list prices; and (ii) below predicted healthcare expenditure growth in Europe and in line with long-term economic growth rates. For policy makers concerned about the sustainability of pharmaceutical expenditure, this study may provide some comfort, in that the perceived problem is not as large as expected.

AB - Background: Within (European) healthcare systems, the predominant goal for pharmaceutical expenditure is cost containment. This is due to a general belief among healthcare policy makers that pharmaceutical expenditure – driven by high prices – will be unsustainable unless further reforms are enacted. Objective: The aim of this paper is to provide more realistic expectations of pharmaceutical expenditure for all key stakeholder groups, by estimating pharmaceutical expenditure at “net” prices. We also aim to estimate any gaps developing between list and net pharmaceutical expenditure, for the EU5 countries (i.e. France Germany Italy Spain and the United Kingdom). Methods: We adjust an established forecast of pharmaceutical expenditure for the EU5 countries, from 2017 to 2021, by reflecting discounts and rebates not previously considered i.e. we move from “list” to “net” prices, as far as data are available. Results: We find an increasing divergence between expenditure measured at list and net prices. When the forecasts for the five countries are aggregated, the EU5 (unweighted) average historical growth (2010 – 2016) rate falls from 3.4% compound annual growth rate (CAGR) at list to 2.5% at net. For the forecast, the net growth rate is estimated at 1.5% versus 2.9% at list. Conclusions: The results from this study suggest that future growth in pharmaceutical expenditure in Europe is likely to be (i) lower than previously understood from forecasts based on list prices; and (ii) below predicted healthcare expenditure growth in Europe and in line with long-term economic growth rates. For policy makers concerned about the sustainability of pharmaceutical expenditure, this study may provide some comfort, in that the perceived problem is not as large as expected.

KW - economic forecast

KW - pharmaceutical expenditure

KW - pharmacoeconomics

KW - rebates

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