E-DRUG: Regulating pharmaceuticals in Europe
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dear E-druggers,
The rising cost of pharmaceutical expenditures in many European countries is of concern to governments required to make effective use of health care budgets.
On the WHO/EURO pharmaceuticals website (http://www.euro.who.int/eprise/main/WHO/progs/pha/Home) a 37-page chapter titled "Regulating pharmaceuticals in Europe: an overview" by Elias Mossialos, Monique Mrazek and Tom Walley is freely available: WHO/Europe | Home
This is part of a 370-page book by Open University Press, titled: "Regulating pharmaceuticals in Europe: striving for efficiency, equity and quality". The table of content is also available: WHO/Europe | Home
Taking a broad perspective that encompasses institutional, political and supranational aspects of pharmaceutical regulation, this book examines approaches used to manage pharmaceutical expenditure across Europe and what impact these strategies have had on the efficiency, quality, equity and cost of pharmaceutical care.
The conclusions are reproduced below FYI
Wilbert
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Wilbert Bannenberg, E-drug moderator
Email: wjb@planet.nl
The 1995-2004 E-drug archives are at Essentialdrugs.org
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Conclusions
There are many different approaches to regulating pharmaceuticals in Europe
that affect public policy objectives to control costs while improving efficiency,
quality of care and equity. International comparisons may contribute to a better
understanding of how different measures and policies are implemented. However,
there are significant limitations to the relevance and transferability of
lessons and policies across countries. Contextual factors such as the social, eco-
nomic, medical, health care and political environment, as well as constraints of
history and institutional frameworks, play a major role in how policies are
developed and implemented in practice. This is particularly important for EU
member states, not only because of national regulation but also supranational
regulations. A policy adopted in one country, therefore, may not necessarily
work, or at least not to the same extent, in another and may need to be modified
to the new context. As described before, it is often difficult to be clear on which
component of a diverse range of measures undertaken was most successful.
Given these two factors, deriving any sense of which of the many possible
interventions are most effective is difficult. A further complication is that governments
must consider those policies already in place and their effects before
new policies are adopted. Trade-offs between competing policy objectives
(health versus industrial) or the needs of different stakeholders (patients, health
professionals, industry) are inevitable.
Governments in Europe are all faced with rising pharmaceutical expenditures
but have taken widely divergent approaches to tackling these. Some government
policies that enhance quality of care, efficiency or access may decrease the
ability to contain expenditures. Rising expenditures of themselves may not be a
problem if they are accompanied by health gain or by a similar rise in government
revenues. In practice, the added health gain for added expenditure is often
unclear, and the rate of rise of expenditure often exceeds revenue, so governments
are forced to act. At the same time, they must aim not just to contain
costs but to improve the efficiency and quality of the health service, and preserve
or enhance equity. Any approach to cost containment, therefore, has to be
evaluated in terms of its effects in these four dimensions.
From the review presented here, it is clear that no single policy approach acts
without a trade-off on the impact along these four dimensions, in addition to
competing trade-offs between the objectives of the policies themselves. Therefore,
a policy maker needs to be clear what primary impact is desired, but conscious
of where a subsequent negative impact of any policy may arise in other
dimensions; if the impact of the trade-off along the other evaluative areas outweighs
the gains in the primary indicator, a policy must be reconsidered.
Considering these four dimensions, it is clear that most of the measures
intended to contain costs do have an impact; however, the extent of any cost
savings or their sustainability over the longer term is variable for example, GP
fundholding and associated incentives in the UK (Chapter 10) or reference pricing
in Germany (Chapter 6). In fact, in most cases the cost savings generated by
any one policy are either limited or short-term. The most effective approaches
work best when combined with other policy measures. For instance, price controls
alone have a limited effect, but are more successful when policy measures
are applied to the volume side of the expenditure equation as well.
In general, few of the measures demonstrate a clear efficiency gain, in part due
to a lack of rigorous studies. This is often, however, a key aim of government
polices containing costs without any diminution in quality. One that does
succeed in this regard is generic prescribing or substitution (Chapter 14). Academic
detailing (Chapter 8) might increase quality, equity and effectiveness by
encouraging the application of evidence-based medicine. It might increase costs
by encouraging appropriate treatment where previously there was undertreat-
ment, or decrease costs where there was overtreatment or waste. Of the interventions
considered here, it is probably the most professionally acceptable. The
use of economic evaluation or wider health technology assessment may
improve efficiency, but may increase overall costs (see Chapter 7). Some policies
might inadvertently seriously decrease efficiency for example, if saving
money on drugs leads to more hospital admissions, as has been clearly seen
in one case in the USA (Soumerai et al. 1991) and as allegedly happened in
Germany in the early 1990s in response to GP budgets. This illustrates the
need to consider the broader effects, including efficiency, in evaluating any
intervention.
Policies aimed solely at cost containment might reduce equity, but if the aim
of cost containment (e.g. increasing prescribing of generics) is to reduce
unnecessary expenditure so as to allow access to other therapies, then cost containment
could increase equity. In general, policies for the rational use of medicines
would be expected to result in improvements in equity at an aggregate
level. Policies such as reference pricing and prescription co-payments (Chapter
13) may reduce equity, unless there are exemptions to protect more vulnerable
patients; used carefully (e.g. differential user charges), these interventions can
increase efficiency and decrease cost, without damaging quality and with
minimal disruption to equity.
The quality of care dimension is usually raised as a primary objective of some
measures that target the rational use of medicines (Chapter 8). In these, cost is
secondary and in fact some measures may increase costs. This raises the difficult
balance faced by policy makers in this sector to secure quality, maintain equity
and improve efficiency, but yet contain costs.
It is clear that there is no perfect solution to balancing these four dimensions
in the pharmaceutical sector. Even if one is sure where the balance should lie, no
one policy or policy combination is right for all countries. Different countries
will need to meet their own objectives and needs through policy approaches
that reflect their particular environment.
Nevertheless, there are some general principles of best practice that policy
makers should keep in mind. First, the objective of the policy must be clear from
the outset, and consideration must be given to its possible impact on all of the
evaluative dimensions of efficiency, equity, quality and cost. Rigorous price
control schemes seem to have an impact on controlling prices, but controlling
price alone, if this can be achieved, does not necessarily improve efficiency, nor
does it necessarily control total expenditures (see Chapter 6). Attention to the
demand side and the promotion of rational drug use is vital if efficiency, equity
and quality are also to be improved. New drugs and changes in product mix will
certainly drive drug expenditure in the future. The policy community at large
needs to consider how we define and reward clinically valuable innovation, so
that drug expenditure reflects the value of the drugs benefits for society. The
future will require a greater partnership between all stakeholders if the solidarity
of socialized pharmaceutical care is to be maintained despite greater needs and
constrained resources.