health care system · for 2012, down from 16.6% in 2011 and 17.2% in 2010. the health sector nova...

Health Care System Group

Indicators to assess the adjustment program

NEC Conference June 20, 2012

NOVA Economics Club 1/19 Health Care System

Today, the national health care system (NHS) faces important challenges:

• Health system sustainability

• High debt level (3 billion Euros)

• Annual health expenditure (public and private) is equivalent to more than 10% of the

GDP.

• Two thirds of this annual expenditure is supported by the government budget.

• The costs with medicines account for almost 20% of the annual health expenditure.

• Public transfers to the NHS account for 16.1% of the planned Government expenditure

for 2012, down from 16.6% in 2011 and 17.2% in 2010.

The Health Sector

NOVA Economics Club Health Care System 2/19

The Health Sector Pharmaceuticals Health system reform KPI’s Conclusions

Today, the national health care system (NHS) faces important challenges (cont.):

• Health inequalities, both in the distribution of physicians throughout the country

and between medical specialties

• Health care quality and safety

• Lack of alignment at central level between strategy, decision-making and

implementation

• Insufficient culture of management performance and accountability

• Limited use of information to monitor and drive performance improvement

The Health Sector



Health system reform

Thus, in order to address all these challenges, the Memorandum of Understanding

presents important measures in the following areas of the NHS:

• Financing

• Pharmaceuticals

• Electronic prescription and quality in prescription

• Efficiency gains

• Planning of health expenditures

• Health care system reorganization



Health system reform

The main objectives of these measures/policies are the following:

• Reduce the overall public spending in the area of pharmaceuticals

• Generate additional savings in hospital operating costs

• Improve efficiency and effectiveness in the health care system

• Devise a strategy to eliminate unpaid debts

• Build mechanisms for future control of expenditures in the public sector

Increasing health expenditure

Stabilized efficiency levels

Decrease costs …

but

… maintain efficiency



Pharmaceuticals


Measures Date to

implement State of

implementation

Set the maximum price of the first generic introduced in the market to 50% of the branded product with similar active substance. Enact legislation which automatically reduces the prices of medicines when their patent expires.

30.09.2011 First quarter of 2012

Implement an annual revision of prices of medicines and of countries of reference in order to achieve cost savings.

31.12.2011 First price revision:

April 2012

Monitor monthly pharmaceutical expenditures and ensure that that the overall public pharmaceutical expenditure does not exceed the target of 1.25 per cent of GDP in 2012 and 1 per cent of GDP in 2013.

Ongoing

Make it compulsory for physicians to prescribe by International Non-proprietary Name (INN) to increase the use of generic drugs and less costly available branded products.

30.09.2011 Enactment of

legislation: First quarter of 2012

Establish rules for the prescription of medicines on the basis of international prescription guidelines.

31.12.2011 Ongoing

Remove all effective entry barriers for generic medicines, in particular by reducing administrative/legal hurdles in order to speed up the use and reimbursement of generics.

31.12.2011

Report assessing the measures efficiency: First quarter of 2013

Increase the share of generic medicines to at least 30 per cent of all outpatient prescription (in volume) in 2012 and substantial further increases in 2013.

Ongoing



Objectives:

• Reduce the public spending on pharmaceuticals

• Increase the use of generics and lower the costs of pharmaceutical products

• Induce competition in the pharmaceutical market

• Give sustainability to the SNS

Pharmaceuticals The Health Sector Pharmaceuticals Health system reform KPI’s Conclusions


Key Performance Indicators:

• Public expenditure on pharmaceuticals (as a percentage of GDP)

• Average price of medicines

• Market share of generics

• Generic competitive market

Pharmaceuticals The Health Sector Pharmaceuticals Health system reform KPI’s Conclusions

NOVA Economics Club Health Care System

• Public expenditure on pharmaceuticals as percentage of GDP

KPI description

Frequency Quarterly

Objective Assess if the public (hospital + retail) pharmaceutical expenditure as a

percentage of the GDP is decreasing.

Unit Percentage

Formula

Variables Total public expenditure, Public retail expenditure, Hospital expenditure &

GDP

Sources INFARMED, AMECO

Interpretation The reduction of this indicator means a positive evolution towards targets

set by the MoU in this particular area.

9/19

Pharmaceuticals – KPI’s The Health Sector Pharmaceuticals Health system reform KPI’s Conclusions

Source: INFARMED, AMECO


0,00%

0,25%

0,50%

0,75%

1,00%

1,25%

1,50%

1,75%

% o

f G

DP

Public expenditure on pharmaceuticals (% of GDP)

Hospital expenditure Public retail expenditure Total public expenditure

Pharmaceuticals – KPI’s The Health Sector Pharmaceuticals Health system reform KPI’s

• Estimates for Portugal’s total public pharmaceutical expenditure in the first quarter of 2012 is circa 1.36% of GDP. Highest value of 1.58% in mid - 2010.

• If we compare with the same period last year, there has been a decline of 0.19 percentage points.

Conclusions


• Average price of medicines

KPI description

11/19

Frequency Monthly

Objective Assess if the average price of medicines is falling.

Unit Absolute number

Formula NA

Variables Average prices of generics, branded medicines and total market

Sources INFARMED

Interpretation The fall of the average price represents a positive impact on prices in

consequence of memorandum measures.


19,87

14,92

8,10

11,82

10,92

0 €

2 €

4 €

6 €

8 €

10 €

12 €

14 €

16 €

18 €

20 €

Euro

s

Average price of medicines

Generics Branded medicines Total market

Source: INFARMED



• On March 2012, the average price reached 8.10€, 45% less than in March 2010 (14.75€) and less than half of the price registered in March 2008 (19.40€).

• Since December 2011, the average price of a branded medicine decreased 6.81%.

Conclusions


• Market share of generics

KPI description

13/19

Frequency Monthly

Objective Assess the penetration of generics in the market.

Unit Percentage

Formula (Volume of generics in the market / Volume of overall outpatient

medicines)

Variables Volume of generics in the market, Volume of overall outpatient medicines

Sources INFARMED

Interpretation The objective is the share of generic medicines to be at least 30% of all

outpatient prescription, this indicators tries to assess this evolution.


10%

15%

20%

25%

30%

Mar

ket

shar

e

Portuguese generic market share

Value Volume

Source: INFARMED



• In March, the generics represented 24.27% of the overall volume of pharmaceuticals sold in that month. One year ago the market share was 20,6%.

• The market share in value decreased from 20% in March 2011 to 18.6% in March 2012.

Conclusions


• Generic competitive market

KPI description

15/19

Frequency Yearly

Objective Assess the share of the market where there is real competition between

generics and brand medicines.

Unit Percentage

Formula (Volume of generics in the market segments where they compete /

Volume of overall medicines sold in all market segments)

Variables Volume of generics in the market in the market segments where they

compete, Volume of overall medicines sold in all market segments

Sources INFARMED

Interpretation

An increase in this KPI means a higher market segment where generic

medicines compete with branded products. More competition means a

lower average price.


0%

10%

20%

30%

40%

50%

60%

Total market Generic competitive market Generic competitive market as % of total market

Ma

rke

t sh

are

Generic competitive market (volume)

2009 2010 2011 2012 Source: INFARMED



• The generics competitive market has slightly increased from 57.06% (end 2011) to 57.67% in 2012.

• Generic medicines account only for 42.5% of the total amount of pharmaceuticals sold in that market. In 2011 this value was 37.94% .

Conclusions


• It is too soon to reach more detailed conclusions regarding the effects of the

MoU measures for the Health sector.

• Majority of the policy changes were only applied in the last quarter of the last year

and the first quarter of 2012. Many measures have not yet entered into place.

• The Portuguese Government is making an effort to approve and apply all the

measures proposed by the Memorandum.

• Establishment of deadlines for the submission of draft legislation.

• Approval of some measures through laws or decree-laws.

Conclusions Conclusions The Health Sector Pharmaceuticals Health system reform KPI’s


Next Steps

• Try to get more specific data from ACSS and the Ministry of Health, namely

through meetings to be scheduled.

• Construct indicators for the other areas of the Health system covered in the

MoU not yet included in this report.

• Complete our database for some indicators and continue updating the

current ones with new published data.

• Discriminate some indicators by Health region and active substance (INN).

• Try to find some indicators that may be suitable for cross-country

comparisons.

Conclusions The Health Sector Pharmaceuticals Health system reform KPI’s

Conclusions

Thank You

NOVA Economics Club 19/19 Health Care System

Pricing and reimbursement of pharmaceuticals

Source: INFARMED


60%

62%

64%

66%

68%

70%

72%

74%

76%

-

50

100

150

200

250

Mill

ion

s o

f Eu

ros

Reimbursement rate

Total retail expenditure Public retail expenditure Reimbursement rate

Pricing and reimbursement of pharmaceuticals

Source: INFARMED


Extra hours costs

Source: INFARMED


10%

12%

14%

16%

18%

20%

22%

24%

4

14

24

34

44

54

Set-11 Out-11 Nov-11 Dez-11 Jan-12 Fev-12

Extr

a H

ou

rs %

Mill

ion

s o

f €

Extra-Hours Analysis

Cost with extra hours Cost with personel % extra hours

health care system · for 2012, down from 16.6% in 2011 and 17.2% in 2010. the health sector nova...

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