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Spain Keeps Drug Expenditure Growth Under Control at Just Over 5% in 2007
25 Jan 08
Cost-containment measures introduced by the Spanish government over the past couple of years are paying off as 2007 pharma spending seemed under control at 11,191 million euro (US$16.36 million), only 5.22% higher than 2006.
Global Insight Perspective | | Significance | The biggest growth in drug expenditure was registered in the region of Murcia (8.19%), in Madrid (6.83%) and in Valencia (6.73%). The lowest growth was registered in the region of Catalonia (2.64%). | Implications | The reasons behind these variations include differences in demographics, as pensioners are known to be the highest consumers of pharmaceuticals, and different prescribing practices among medical professionals. | Outlook | Savings made by the national health system are being offset by the increased number of prescriptions, as cheaper medicines mean more visits are made to doctors. One way of addressing this may be the introduction of patient co-payments. However, although the idea is not new it is not very popular with the public, and therefore too much of a risk for politicians. |
Spain Gets Tough on Pharmaceutical Costs According to the latest data released by the main directorate of pharmacy and healthcare products, pharmaceutical expenditure by the Spanish national healthcare system in 2007 reached 11,191 million euro (US$16,36million), reports Spanish news agency EFE. The figure is 5.22% higher than 2006. The number of invoiced prescriptions has gone up by 5.95%, whereas the average price per prescription in 2007 decreased by 0.69% year-on-year (y/y). Differences in pharmaceutical expenditure are apparent among individual regions. The biggest growth in spending was registered in the region of Murcia (8.19%) while the lowest was in Catalonia (2.64%). Growth in Pharmaceutical Expenditure by Region in 2007 | Region | Percentage Growth Y/Y | Murcia | 8.19% | Madrid | 6.83% | Valencia | 6.73% | Basque country | 4.22% | Galicia | 4.16% | Catalonia | 2.64% | Source: EFE, 2008 |
In December 2007, pharmaceutical expenditure amounted to 927.3 million euro, an increase of 2.61% from December 2006. The number of prescriptions was also higher by 4.24% y/y. The highest spending regions in December 2007 were as follows: Highest Spending Regions in December 2007 | Region | Percentage Growth Y/Y | Murcia | 9.63% | Melilla | 9.59% | Balearic islands | 8.91% | Valencia | 5.60% | Source: EFE, 2008 |
Outlook and Implications The latest figures suggest a moderation in pharmaceutical expenditure by the Spanish health system, proving that a number of government cost-containment measures are having the desired effect. In comparison with 2003, the national medicine bill was 12.15% higher in 2007. These cost-containment measures include policies for the rational use of medicines, a new system of reference pricing and increased prescription of cheaper generic medicines. The differences in consumption between regions can be partly explained by differing demographic characteristics, as pensioners are the highest consumers of medicines among the age groups (see Spain: 20 August 2007: Pensioners Consume 55% of Medicines, Spanish Study Shows). At the same time, while consumption of generic medicines has doubled in the past couple of years, prescription practices vary among regions (see Spain: 30 October 2007: Latest Spending Figures Highlight Growing Generic Consumption, But Discrepancies in Usage Across Spain). While cheaper medicines and a lower medicines bill are surely good news for the national health system, the innovative pharmaceutical sector has been hit hard by recent measures. The Spanish Ministry of Health has prepared a draft of the new Order of Reference Prices due to be implemented from 1 March 2008, which has prompted mixed reactions from the pharmaceutical sector. The innovative pharmaceutical industry association, Farmaindustria, and the association of generics producers, AESEG, are asking for a revision of the minimum price, currently fixed at two euro, and a "cut-off" date for the entrance of new drug sets (see Spain: 30 November 2007: Spanish Pharmaceutical Sector Shows Mixed Reaction on New Reference-Pricing Draft).
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