Cost-Efficiency and the Road to Investment. Dr Richard Torbett Chief Economist, EFPIA 9/9/14

Transcription

1 Cost-Efficiency and the Road to Investment Dr Richard Torbett Chief Economist, EFPIA 9/9/14

2 Health systems across Europe have improved productivity with treatment volumes increasing faster than costs Total patients treated and total healthcare expenditure ( = )* Total patients treated and total healthcare expenditure ( = ) Patients treated (index = ) Patients day cases (index = ) Healthcare expenditure (index = ) Healthcare expenditure (index = ) % % +35% % Total Patients Treated Total Healthcare Expenditure 134 Total Patient Day Cases Total Healthcare Expenditure Note: Total patients treated includes in-patients and out-patients Source: *NHS (); Department of Health, Ireland (211), OECD Health Statistics Database (accessed 213) 2

3 Across Europe growth in medicines expenditure is lagging behind growth in total healthcare expenditure Total healthcare expenditure per capita and total medicines expenditure per capita (, 21 EU OECD Countries, population-weighted, current prices, PPP, $) THE per capita ( = index ) % % 15% % 13% % 1% Note: 12% % Total Healthcare expenditure per capita ( = ) Healthcare Spend as a % of GDP Total Medicines expenditure per capita ( = ) Medicines Spend as a % of Healthcare Spend Countries included: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, UK Source: OECD Health Statistics Database (accessed 213); Eurostat Database (accessed 213) 3

4 Medicines have contributed to 15% of increased health costs in Europe with hospitalizations and elderly care being the key drivers Share of Growth per healthcare category (, 15 EU OECD Countries, population-weighted, current prices, PPP, $) $ per capita 54% 16% 14% 5% 4% 4% 3% % % Other Healthcare expenditure per capita Healthcare Curative and Long-term expenditure rehabilitative nursing care per capita care Medicines Ancillary services Other Medical Health Admin. Prevention Goods and and Health Public health insurance services Note: Countries included: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden Source: OECD Health Statistics Database (accessed 213); Eurostat Database (accessed 213) 4

5 Savings from generic expiries have ensured that the global medicines bill is sustainable and will continue to be so Patent exposure over time and ratio of new product sales vs. generic expiries* Components of change in total medicines spending Total Spend ($ bn) $bn % 45 8% 7.4% 4 7% 35 6% 3 4.9% % 4.4% 5% 4.4% 3.8% 4% 3.6% 3.3% % % 1% Sales value of expired products Ratio of New Product Spending vs. eneric Expiries % 2.5% 2.% 2% 2.8% 15 CAGR: +1% Brand LOE Savings Underlying from generic growth & expiry and new product loss of introductions exclusivity (LoE) Generic Increasing generic usage post-loe 215 5

6 Combination of generic price erosion & price regulation resulted in a 16% decline in nominal medicines prices vs. a 25% rise in consumer prices Consumer Price (CPI) vs. Medicines Price, population weighted, year = Countries reporting Medicines Price Data Population-weighted - Europe CPI Medicines Price Note 6 Euro-denominated countries producing medicines price index only. Countries included: Austria, Belgium, Finland, France, Germany, Greece, Italy, Spain, Sweden For Austria, only data available until Source: Austria: IFP; Belgium: Pharma.be; Finland: Statistic Finland; France: INSEE; Germany: GKV; Greece: Eurostat; Italy: ISTAT; Spain: INE; Sweden: Apotekens Service 6

7 For many therapy areas the average cost of medicine has decreased over time, while more patients are being treated % Change in price per treatment day vs. % Change in number of treatment days % Q3 Q2 Q1 Q4 211 Q3 211 Q2 211 Q1 211 Q1 211 Q4 % Change in number of treatment days (Q4 = ) Source: IMS MIDAS, MAT 9 () 92 Q4 Q3 Q2 Q1 Q4 211 Q3 211 Q2 211 Q1 211 Q4 86 Q3 Q2 +3% +7% Q1 Q4 211 Anti-ulcerants Q3 211 Angiotensin II Antagonists Q2 211 Anti-depressants % Change in price per treatment day (Q4 = ) 7

8 Key Success factors for Financial Sustainability Ensure all health spending is as smart as possible Value based approaches to decision-making but let s not forget about the importance of markets where they can work Invest in the right infrastructure to ensure decision makers are operating in an information rich environment Common sense evaluation for all major investment or policy initiatives aimed at improving efficiency the need to get over pilotitis Rational use of technology including medicines. This involves investment in innovation, use of older products where appropriate and disinvestment of technology that are no longer required Support integrated approaches to care deliver and financial management A byproduct of health systems getting this right will be more (and better) investment in Europe by the private sector 8

9 Thank you!