Drugs and Money: Prices, Affordability and Cost Containment

158 Pages·2003·1 MB·English

by  M. N. G. Dukes

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Unlike earlier editions of “Drugs and Money”, this volume devotes .)
considerable attention to the special problems of developing countries
and those where the economy is currently in transition.
Published on behalf of the World Health Organization
Regional Office for Europe by IOS Press
ISBN 1 58603 334 4 (IOS Press)
ISBN 4 274 90582 9 C3047 (Ohmsha)
ISSN 0924-6479
DRUGS AND MONEY

Drugs and Money
Prices, affordability and cost containment
Edited by
M.N.G. Dukes
University of Oslo, Norway
F.M. Haaijer-Ruskamp
University of Groningen, The Netherlands
C.P. de Joncheere
WHO Regional Office for Europe, Copenhagen, Denmark
A.H. Rietveld
Cambridge Pharma Consultancy, Cambridge, United Kingdom
Published on behalf of the World Health Organization
Regional Office for Europe by IOS Press
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© 2003, World Health Organization
All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted, in any form or
by any means, without prior written permission from the publisher.
ISBN 1 58603 334 4 (IOS Press)
ISBN 4 274 90582 9 C3047 (Ohmsha)
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InternationalJournalofRisk&SafetyinMedicine15(2002)1–3 1
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Introduction
Drugs and Money
During recent decades, society has attached great importance to improved health, and has witnessed
a fast rising demand for health care. As a consequence of that development, most, if not all, countries
have found themselves confronted with the problem of meeting growing expenditure on health care.
Thatadditionalexpendituremusteitherbefinancedoritmustinonewayoranotherbeconstrained;both
approacheswillprobablyhavetobeadoptedinparallel.Increasedpublicspendingmaymeetwithmacro-
economicdifficulties,whileincreasedprivatespendingwillgiverisetoequityconcerns.Thegrowthand
the ageing of populations, the widening range and complexity of available medical interventions and
changes in society’s expectations regarding attainable health and desirable health care all put pressure
on the budget available for health systems, whether these comprise prevention, curative services or the
provision ofcarefortheagedorinfirm.
The very rapid growth of expenditure on medicines is of particular concern and it has attracted con-
siderable political attention, in part no doubt because it is a concrete issue which at first sight appears
readilyamenabletoeconomiccontrol.Thatfirstimpressionhasoftenprovenmisleading;despitetheim-
pressivevarietyofcostcontainmentmeasureswhichhavebeendevisedovertheyears,drugexpenditure
hasremainedhighandasaruleithascontinued togrow.
One of the complicating factors in this particular field is that in so many countries a regulated, col-
lectively financed health care sector coexists withafree and profit-driven marketplace. Both are widely
regarded as desirable and defensible, yet it is evident that where the two interact conflicts may arise;
a country seeking to contain pharmaceutical expenditure will soon find itself imposing restraints on
thoseveryindustrial andcommercialprocesseswhichitissoanxioustopromote.Thecountries ofCen-
tralandEasternEurope, currently transforming theircentralized economies intomarket-driven systems,
andwiththeirfrontiersnowopentowesternproductsatwesternprices,haveexperienced theseconflicts
in a particularly acute form. They have struggled greatly to strike abalance between the one-time ideal
offreehealthcareandcurrent conceptsoffreeenterprise.
In their determination to contain pharmaceutical costs, while at the same time aiming at improved
care and equitable access to medicines, countries have often implemented a series of measures in rapid
successionorevensimultaneously, readilyseizingonandadoptingwhatappeartobepromisingpolicies
developed inneighbouring countries. Theresult canbeabewildering, complex anddynamic patchwork
of interacting approaches. In that situation it can be as difficult to identify the causes of failure as to
explainwhateversuccesses areattained; thereisrarelyanything inthenatureofacontrolled experiment
incostcontainment,andithasthereforebecomeincreasinglydifficultforonememberstatetolearnfrom
the experiences of others. In someinstances, too, thefeasibility orotherwise of aparticular approach is
determined by purely national factors. It can for example be tempting, in a country where the bulk of
drugs are supplied by national manufacturing firms, to impose limits on their promotional expenses or
profits; such countries are today however few and far between, and where one is dealing largely with
0924-6479/02/$8.002002–WorldHealthOrganization.Allrightsreserved
2 DrugsandMoney
multinational corporations one generally has neither the insight nor the implements which one needs to
institute suchmethodssuccessfully.
Health care systems in Europe are largely based on the principles of health as a human right, on
equitable access to health and health services, quality of health care, on solidarity, and on the active
participation ofsocietyasawhole.Becauseofthedifficultiesassociated withrisingcosts,however,itis
todayvitaltotranslate thoseideals intoachievements whicharequantifiable bothintermsofhealthand
of expenditure; only with the help of such exact information can one hope to develop defensible poli-
cies which balance initiatives against resources. The 2000 World Health Report presented an approach
to measuring the performance of health systems; it looked broadly at indicators in the areas of health
attainment, of fair financing, ofresponsiveness ofthe system, and the efficiency withwhich these goals
areachieved.Otherpublicationshaveconsideredspecificallythemeanswhichareavailabletoassessthe
efficiencyandcostsofpharmaceutical care,athemewhichisreflectedthroughout thisbook.
Many member states have over the years approached the World Health Organization for advice or
informationonthefeasibility of(generallyshort-term)measurestocontrolthegrowthofexpenditure on
medicines.SuchcallsforhelpledtheOrganizationasearlyas1983toconcludethattherewasanongoing
needamongmemberstatesforguidanceinthedevelopmentoftheirnationalpolicieswithregardtocost
containmentinthisfield.InthatyearthePharmaceuticalsUnit(PHA),nowtheHealthTechnologiesand
Pharmaceuticals Programme,oftheWHORegionalOfficeundertook astudyunderthetitle“Drugsand
Money”;itculminated inadeliberately concise report,providing acriticaloverviewoftheeffectiveness
of older cost-containment schemes while also paying attention to innovative ventures. The report was
widelyusedandrepeatedly updated, withitssixtheditionappearing inbookformin1992.
This present seventh edition aims, as its predecessors have done, to provide policy makers and reg-
ulators with a compact and practical review of the various approaches which have been developed and
testedtodateinanefforttocontaintheoverallcostsofpharmaceuticalservicesanddrugtreatment.New
measures, enjoying a greater or lesser degree of success, have continued to emerge during the ’nineties
and theend isnot yet insight. Inthis small volume particular emphasis isagain placed on those princi-
pleswhichmayprovehelpful incontaining costswithout introducing adisproportionate risk ofadverse
consequences. Thetrue art ofgood housekeeping inthis fieldis clearly toensure that drugs continue to
benefitsocietywherevertheycan,whileeliminating everyformofwasteofpublicfunds.
Unlikeearliereditionsof“DrugsandMoney”thisvolumedevotesconsiderableattentiontothespecial
problems ofdeveloping countries andthose wheretheeconomy iscurrently intransition. Whilelessons
learntinonetypeofnationalenvironment mayproveapplicable inanother, itisimportanttorealisethat
the situation inwestern industrialized countries still differs substantially from that elsewhere. Although
the nature of the problem of cost containment may be the same, transitional and less-developed coun-
tries do not find it easy to adopt many of the solutions developed by western-industrialised countries.
Conversely, some of the approaches which have been developed in the developing world would not be
applicable toindustrial society.
ThroughouttheyearstheWorldHealthOrganizationhastakenthepositionthatthequestionastohow
to provide access to medicines while containing their costs must be viewed as an integral part of long-
term pharmaceutical policies. More broadly it is a part of overall health care policy and, more broadly
still,acomponentoftheentireeconomicandsocialpolicyofacountry.Theproblemofcostcontainment
ofpharmaceuticalscannotbeviewedseparatelyfromsuchissuesasequity,marketstructureorthequality
oftherapeutic care.
Thebookisstructuredinsuchawayastoprovidethereaderwithalogicallineofreasoningprogress-
ing from the scope and causes of the cost containment problem (Chapter 1) through the means which
DrugsandMoney 3
exist to examining and quantify it (Chapter 2), to an extensive consideration of the principal solutions
which governments use to cope with the problem (Chapter 3) and to measure the impact of whatever
measures aretaken (Chapter4).Actualexperience withthemostprominent ofthemethods usedtodate
is considered in Chapters 6 to 13. In the last two sections of the book, special attention is devoted to
the situation in developing countries and those undergoing structural transition. Although the various
approachestocostcontainmentareinthisvolumenecessarilydiscussedseparately,theyareinfactinter-
linkedandcomplementary;someoverlapandcross-referencing betweenthevarioussectionsofthebook
istherefore unavoidable.
Lastbut notleast, although thetitle “Drugsand Money”maytosomesuggest otherwise, government
influenceisnotlimitedtothefinancingofhealthcare,butextendsalsototheorganization, standardsand
delivery ofhealth care inall its forms. Manyregulations concerning the intrinsic quality ofpharmaceu-
ticals, thequality ofprescribing andtheproperuseofmedicines havebeenintroduced overthelastfour
decades, and theirinfluence iscomplementary tothatofmeasures designed primarily tohave economic
effectsinthisfield.
Developmentsinthisfieldcontinueandareboundtoexpandfurther.Themassivehumanandfinancial
challenges presented by theHIV/AIDSepidemic could nothave been foreseen when thefirst edition of
“Drugs and Money” appeared twenty years ago. Nor however could the ongoing worldwide response,
encompassingchallengestotheentireissueofdrugpricingandpatents.Forallthat,manyofthemethods
currentlyinusetocontaincostsinthefieldofpharmaceuticalcarehaveessentiallydevelopedfromthose
which were first conceived in the ’eighties, and with which sufficient long-term experience has been
gained in different environments to assess their strengths and weaknesses. It is to be hoped that this
reviewofwhathasbeendoneandwhatcanbedonetoprovideaffordablepharmaceuticalcarewillagain
provideahelpfulguidetoallthosefacedwiththeissue.
M.N.GrahamDukes
Institute ofPharmacotherapy
University ofOslo,Norway
FloraM.Haaijer-Ruskamp
DepartmentofClinicalPharmacology
UniversityofGroningen, TheNetherlands
KeesdeJoncheere
HealthTechnologies and
Pharmaceuticals Programme
WorldHealthOrganization
RegionalOfficeforEurope
Copenhagen, Denmark
AdH.Rietveld
CambridgePharmaConsultancy
Cambridge, UnitedKingdom
December2002

Part I
Problems and approaches to a solution