The role of prices in drug expenditure analysis

Rovira, Joan; Tremosa, R.; Gilabert, Antoni Coll; Torralba, Miguel

doi:10.1007/s101980100071

Cited by 10 publications

(10 citation statements)

References 7 publications

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“…The most widely used price indexes to track changes in retail prices and quantities are the Laspeyres (L) index, which uses quantity weights in a base period 0, and the Paasche (P) index, which uses quantity weights in chained indexes. These were calculated using Microsoft Excel spreadsheet software (see Figure ).…”

Section: Methodsmentioning

confidence: 99%

Determination of the main factors contributing to increases in medicine expenditures for the National Health Insurance Fund in Sudan

Mousnad¹,

Shafie

Ibrahim

2013

Journal of Pharmaceutical Health Services Research

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Objectives To assess the main factors that contributed to the increase in medicine expenditure of the National Health Insurance Fund in Sudan in the period 2006–2010. Methods A time‐series decomposition analysis was adopted for pharmaceutical expenditure increases characterized by trends and seasonality (time‐series data per quarter). The change in real spending is decomposed into three components: price, quantity and residual. The contributions of these components towards pharmaceutical expenditure were then determined by means of chained price and quantity indexes. Key findings The consumer price index rose by about 195.56% over the period of the study. The real spending index shows that real medicine expenditures increased by 66.30% during the period 2006–2010. Relative prices increased by 6.73%; Quantity increased by 91.04%, and the residual contribution decreased by 18.44%. Conclusion Price factors, quantity and residual are significant determinants of expenditure for the National Health Insurance Fund in Sudan. The largest contribution to the increase in real medicine expenditure was made by the quantity factor.

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Section: Methodsmentioning

confidence: 99%

Determination of the main factors contributing to increases in medicine expenditures for the National Health Insurance Fund in Sudan

Mousnad¹,

Shafie

Ibrahim

2013

Journal of Pharmaceutical Health Services Research

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“…The intention of this study is to provide a liberal estimate to avoid underestimation of the impact of price changes on pharmaceutical expenditures. Therefore a fixed Laspeyres price index is used, which reflects price changes for products already marketed in 2005 and is known to generally provide an upper bound for the average price increase (Rovira, Tremosa, Gilabert, & Torralba 2001). This price index is calculated by weighing price changes over a given period with the consumption weights of the base period, which can be expressed by the following formula:…”

Section: Methodsmentioning

confidence: 99%

“…The present study therefore pursues a new approach to assess the performance of this institutional set-up, by decomposing pharmaceutical expenditure growth between 2005 and 2009 and comparing price developments and measures for market structure to the pharmaceutical retail sector. Policy makers are often interested in this kind of decomposition of expenditure growth to determine to which extend they are justified and reflect higher treatment activity and increased treatment efficiency or whether they are due to pure price increases for old medicines (Rovira et al 2001).…”

Section: Introductionmentioning

confidence: 99%

The market for hospital medicine in Denmark

Hostenkamp

2011

Nordic J Health Eco

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Pharmaceutical expenditure growth has outpaced GDP and healthcare expenditure growth rates in Denmark as in most OECD countries for the last decade. A major part of this increase was due to high growth rates in specialist areas that are typically located in hospital settings. Yet the market for hospital medicines and their procurement are still poorly understood. The present paper characterises the market for hospital medicines in Denmark in terms of its organisation and developments between 2005 and 2009. In Denmark hospital medicines are publicly financed and procurement is centrally organised. 98% of all medicines administered at Danish public hospitals are purchased through a public procurement agency by means of public tenders. Using data on actual contract prices we decompose pharmaceutical expenditure growth into the contributions from newly introduced medicines, price and volume increases and use summary statistics to compare market performance in both sectors. The market for hospital medicine is more concentrated than the pharmaceutical retail sector and the share of generics and parallel imported products is significantly lower. Between 2005 and 2009 expenditures for hospital medicines more than doubled -accounting for almost 40% of the total Danish pharmaceutical market in 2009. Price increases however - although positive and higher than in the pharmaceutical retail sector - were only moderate. The majority of the expenditure growth was due to an increase in utilisation and the introduction of new medicines in the hospital sector. Centralised tendering may therefore have important implications for competition and industry structure in the long run.

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“…Taken together, these problems imply that increase in the real drug expenditure do not even correspond to increases in the price index multiplied by population growth rate and by the receipts per person growth rate. Hence the remaining part of real drug expenditure is termed the residual [13]. More in de- Original Papers tail, the residual reflects (a) the introduction of new medicines into areas where no other medicines were previously available, (b) the switch from inexpensive to expensive medicines, (c) the introduction of new and cheaper generic medicines, (d) the sale of old medicines in larger packages, and (e) the sale of old medicines in smaller packages.…”

Section: Decomposition Of Pharmaceutical Expendituresmentioning

confidence: 99%

Pharmaceutical expenditure in Spain: evolution and cost containment measures during 1998?2001

Darbà

2003

The European Journal of Health Economics

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Significant changes in the Spanish pharmaceutical market were introduced during the period 1998-2001. Cost containment has been a major priority for all publicly financed medicines. Its measures included a voluntary contribution from Farmaindustria, a negative list, wholesale and pharmacists margin reductions, generic substitution, a reference price system and price reduction for certain active principles. However, the changes in the Spanish pharmaceutical market have not produced significant savings in public expenditure. The main reason for the continuing rise in this expenditure is the introduction of new, more expensive drugs, which often fail to offer real therapeutic advantages over products already on the market. Measures such as prescribing guidelines, incentives to physicians to meet prescribing budgets, pharmacotherapeutic guides and regular bulletins could be implemented with the aim of prescribing value for money medicines.

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The role of prices in drug expenditure analysis

Cited by 10 publications

References 7 publications

Determination of the main factors contributing to increases in medicine expenditures for the National Health Insurance Fund in Sudan

Determination of the main factors contributing to increases in medicine expenditures for the National Health Insurance Fund in Sudan

The market for hospital medicine in Denmark

Pharmaceutical expenditure in Spain: evolution and cost containment measures during 1998?2001

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