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Conference Agenda

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Session Overview
Session
4c. Economics: Impact of Regulating Medicines Price on Prescribing
Time: Wednesday, 16/Nov/2011: 3:15pm - 4:15pm
Session Moderator: Hans V. Hogerzeil, ex-WHO, Switzerland
Session Moderator: Lu Ye, School of Public Health, Fudan University, China, Peoples Republic of
Session Rapporteur: Warren Kaplan, Center for Global Health & Development, Boston University School of Public Health, United States of America
Location: Ametist

Presentations

Inefficiencies Due to Poor Access to and Irrational Use of Medicines to Treat Acute Respiratory Tract Infections in Children

Dele Olawale Abegunde, Kathleen Holloway

World Health Organization, Switzerland

Background: The extent of the inefficiencies attributable to poor access to appropriate treatment and irrational use of medicines in the developing countries is not well known. Estimation of the level of inefficiencies will provide a strong basis for evaluating the impact of interventions to improve access and rational use of medicines.

Objective: To estimate the level of cost-inefficiency due to irrational use of medicines and poor access to appropriate treatment by comparing cost of medicines to treat acute respiratory infections (ARI) under business-as-usual and treatment according to recommended guidelines scenarios

Design: Applying Bayesian algebra on data obtained from data sources including WHO, and UNICEF, a probability tree is constructed to estimate the cost of medicines for the proportion of new cases that have access to formal care and which obtained treatment in 2010, under business-as-usual or counterfactual scenarios. The counterfactual scenario assumes that new cases were provided the appropriate medicines according to UNICEF/WHO recommended guidelines. Comparing these costs provides a rough indication of waste from inappropriate (ineffective) access to the appropriate medicines for treating ARI.

Setting: A cross-section of the under-5 population in 134, low-, lower middle-, upper middle-, and high-income countries, spanning 9 WHO subregions, at risk of acute respiratory tract infection in year 2010

Outcome measure(s): Acquisition cost of medicines consumed in treating ARI under the comparative scenarios in international procurement prices and dollars

Results: Cost of medicines to treat ARI given the business-as-usual scenario is aggregated to $21 million, $4 million of which is due to cost of medicines for the proportion of patient with access to the appropriate (recommended) care and $17 million represents cost to those who had poor access. The estimated cost of the counterfactual (assuming full coverage to appropriate care) is $16 million. When compared to the business-as-usual scenario, about $6 million is wasted on inappropriate treatment. Estimated costs could be much higher if local (marked-up) country prices of medicines were available. Only 17.6% of the estimated cost of medicines is attributable to appropriate access to treatment. Over 80% of the cost of medicines is applied to suboptimal treatments. Total cost of medications giving current treatment scenario is 36% in excess of total cost of medicines that would be incurred if there was full access to appropriate treatment. Estimated cost of irrational use of medicines to treat ARI in the business-as-usual scenario represents 24% of the total cost of medicines if appropriate medicines were used.

Conclusions: Economic inefficiencies from irrational use of medicines to treat ARI could range from 36 to 76%. Costs could be more if health systems cost were fully considered.

Funding source(s): WHO

343-Abegunde-_a.pdf
343-Abegunde-_b.ppt
343-Abegunde-_c.pdf

Facilitators and Barriers for Generic Drug Use Among General Practitioners in Northern State of Malaysia: Findings from a Cross-Sectional Mail Survey

Mohamed Azmi Hassali, Gin Nie Chua, Asrul Akmal Shafie, Ahmad Awaisu, Imran Masood, Fahad Saleem, Harith Al-Qazaz

Universiti Sains Malaysia, Malaysia

Problem statement: The provision of health care has traditionally been managed based on the philosophy that, where the patient is concerned, price should not be a hindrance. With the global escalation of health care costs, however, governments in many countries have adopted ongoing series of cost-containment attempts in an effort to spend their limited financial resources efficiently so that equitable access to health care can be provided. One of the many ways to control health care expenditure is to promote the use of cheaper generic drugs instead of the more expensive branded equivalents. In the context of Malaysia’s health care system, where currently no separation of dispensing has been implemented, the general practitioners (GPs) are important players in the medication distribution chain because their core activities revolve around the prescribing and dispensing of medications. Although, the recently adopted Malaysian National Medicine Policy has advocated generic prescribing and substitution to improve the affordability of medicines, the onus of prescribing and dispensing generics lies on the attending physician. To date, no studies have been done to evaluate the understanding and perceptions of GPs in Malaysia on issues surrounding the safety, efficacy, and quality of generic medicines.

Objectives: The present study’s objectives are to evaluate perceptions held among general practitioners on the concept of generic medicine use and to assess the current state of knowledge among general practitioners on issues related to generic medicine prescribing.

Design: A postal cross-sectional survey involving registered GPs (n=325) in Penang, Malaysia, was undertaken. The survey questionnaire consisted of 23 items, and it was validated accordingly before being sent to the GPs. At the end of the survey period, a total of 87 GPs responded to the survey, a response rate of 26.8%.

Setting: The survey was conducted with all registered private GPs who currently practice in the State of Penang, Malaysia.

Results: The majority of the respondents (85.1%) claimed that they actively prescribed generic medicines in their practice. Conversely, only 4.6% of the respondents correctly identified the Malaysia’s National Pharmaceutical Control Bureau’s bioequivalence standard for generic products. The respondents had misconceptions about the concepts of bioequivalence, efficacy, safety, and manufacturing standards of generic medicines. GPs in this survey believed that a standard guideline on brand substitution process, collaboration with pharmacists, patient education, and information on safety and efficacy of generic medicines were necessary to ensure quality use of generics. Furthermore, advertisements and product bonuses offered by pharmaceutical companies, the patient’s socioeconomic status, and the credibility of manufacturers were all factors that influenced their choice of medicine.

Conclusions: Although it appeared that GPs have largely accepted the use of generic medicines, they still have concerns regarding the reliability and quality of such products. GPs need to be educated and reassured about the generic products approval system in Malaysia concerning bioequivalence, quality, and safety.

Funding source(s): No funding was received for this study.

114-Hassali-_a.pptx
114-Hassali-_b.ppt
114-Hassali-_c.pdf

Study on the Effect of Zero Mark-up Policy on Medicines in Beijing Community Health Facilities

Wei Cheng1, Yunyun Fang1, Dehui Fan1, Jing Sun2, Xuefeng Shi1, Jiao Li1

1Beijing University of Chinese Medicine, P.R.China; 2National Institute of Hospital Administration, MoH, P.R.China

Problem Statement: A mark-up policy on medicines in Chinese public health facilities was originally set to supplement government subsidies, however, has evolved into a perverse incentive for preference of expensive medicines and over prescribing, and a driver for the soaring medicine costs. The government decided to remove the mark-up on medicines in public facilities (starting with community health centers [CHC]) to contain medicine costs. A zero mark-up policy (ZMP) was firstly implemented in Beijing, associated with different government subsidy approaches (GSA).

Objectives: This study analyzes the effects of the policy, expects to see if it contained the medicines cost, and how it affected the operation of the CHCs and staff moral. The study also explores which GSA is more effective in helping achieve the objective.

Design: The effect is measured in time series before and three years after the reform, and compared with different GSAs.

Setting: The study was conducted in the public CHCs in Beijing.

Study Population: All 351 public CHCs in 18 districts were divided into 3 groups according to GSA. 20% of the total number of CHCs with the same GSA in each district were randomly selected as sample CHC. A total of 70 CHCs was sampled and distributed in three GSA groups:17, 42, 11 CHCs in fixed subsidy (FS), income-linked subsidy (IS), and government purchase services of providing "zero mark-up medicines (ZMMs) (GPS) groups respectively.

Policy: The government developed a list of medicines based on the national essential medicines list and required CHCs to procure these medicines via government pooled tendering and to dispense them at the procurement price. Government subsidy was allocated based on FS, IS, and GPS approaches.

Outcome Measure: The effect is measured with the changes of proportion of ZMMs to total medicines cost per visit, medicines cost per visit, government subsidy, medicines and medical income as a proportion to the total revenue; and annual staff salary. Dada were directly obtained from the clinical database of the 70 sample CHCs. Statistical analysis was done using the SPSS?17.0 software.

Results: Until the end of 2009, the proportion of ZMMs to total medicines cost per visit achieved 75.4%, 57.8%, and 52.6% in FS, IS, and GPS facilities. The medicines cost per visit in FS and IS facilities reduced18.7% and 1.9% by the end of 2007(P=0.001, α=0.05, t test), and rebounded in 2008 and 2009. There was a significant difference between the reductions (P=0.016, α=0.05, t test). The medicines cost per visit in GPS facilities increased 25.2% by the end of 2007, and kept growing in 2008 and 2009. The proportion of government subsidy to the total revenue grew the fastest in FS facilities. GPS facilities grew the slowest. IS facilities were in the middle. In 2006, total revenue in GPS facilities was more than twice of that in FS facilities and continued growth during 2006-09. FS and IS facilities generated less total revenue then GPS facilities by the end of 2007, and was only about 20% and 30% of that in GPS facilities in 2009. The annual staff salary in all CHCs kept rising during 2006-09. In 2006, GPS facility salaries were the lowest; IS facility salaries were the highest; and FS facility salaries were in the middle. By the end of 2007, FS facility salaries achieved the highest; GPS facility salaries were always at the lowest level; IS facility salaries were in the middle.

Conclusions: The ZMP dose help in containing the rapid growing of medicines costs. The FS approach is more effective in reducing the financial burden of the patients than IS and GPS; it offers security for facility operation and salary scale but faces the challenges of financial sustainability, budget justifiability, and regulation capacity. The GPS approach causes lower willingness to use ZMMs. It also raises a question for other GSAs in keeping work enthusiasm high under more or less secured government subsidies. The IS approach has a mixed effect.

Funding Source: WHO

947-Cheng-_a.pdf
947-Cheng-_b.ppt
947-Cheng-_c.pdf

Changes in Use of Antidiabetic Medications Following Price Regulations in China (1999-2009)

Christine Y Lu1, Peter Stephens2, Bao Liu3, Dennis Ross-Degnan1, Anita Wagner1

1Department of Population Medicine, Harvard Medical School and Harvard Pilgrim Health Care Institute; 2IMS Health; 3Fudan University

Problem statement: Pharmaceutical expenditures are a major burden in China. In 2005, pharmaceuticals accounted for 44% of health care expenditures. Between 1997 and 2007, the National Development and Reform Commission implemented 24 rounds of reductions (by between 5% and 40%) in maximum retail prices of medicines, covering 87% of medicines listed in the National Drug Catalogue of Basic Medical Insurance and Worker Medical Insurance. Each regulation was intended to reduce pharmaceutical expenditures by between 12 and 700 million yuan.

Objectives: To examine the effects of price regulations on use of insulin and oral hypoglycemic medications in Chinese hospitals

Setting: We used longitudinal purchasing data collected by IMS Health from about 15% of Chinese hospitals (810 general and 208 specialty) with at least 100 beds.

Design: Interrupted time series design

Outcome measure(s): Quarterly market volume (standard units sold per 1000 population) and market share of price-regulated products (percentage of the total market) in each category from Q1, 1999 through Q4, 2009.

Results: After the first price regulation in December 2001, there was a significant increase in market volume trend of insulin products (0.06 standard units per 1000 population per quarter; 95% CI, 0.04-0.08) but utilization of oral hypoglycemic products remained stable. After the subsequent price regulation in December 2006, there were significant increases in market volume trend of insulin products (0.18 standard units per 1000 population per quarter; 95% CI, 0.12-0.23) and oral hypoglycemic products (10.31 standard units per 1000 population per quarter; 95% CI, 5.65-14.98). Market share of price regulated insulins (a small portion of total insulin market) or oral hypoglycemic products (the majority of total oral hypoglycemics market) did not change significantly after either price regulation.

Conclusions: China’s pharmaceutical price regulations targeted specific products within individual chemical entities of various therapeutic classes. Our results suggest that lowering the prices of specific antidiabetic products was were associated with increases in the overall utilization of antidiabetic medications, suggesting improved access to essential medications or increased prescribing quantities after price reductions on some products. Further investigations on the impact of these drug price regulations on drug prices and pharmaceutical expenditures are warranted. This study creates baseline data on patterns in medication use against which policy changes under China’s current health care reform can be evaluated.

Funding source(s): IMS Health provided data in kind. Drs. Wagner and Ross-Degnan were supported by a grant from WHO for the development of the ICIUM2011 scientific program.

878-Lu-_a.pdf
878-Lu-_b.pptx
878-Lu-_c.pdf

Does Your Health Care Depend on How Your Insurer Pays Providers? Variation in Utilization and Outcomes in Thailand

Sanita Hirunrassamee1, Sauwakon Ratanawijitrasin2

1Pharmacy division, Phramongkutklao Hospital, Thailand; 2Faculty of Social Sciences and Humanities, Mahidol University, Thailand

Problem statement: In Thailand, recent reform has changed the environment in which hospitals operate. With the 3 major health insurance schemes employing different payment mechanisms, hospitals are faced with multiple payment incentives. Whether and how this change affects the use of health resources, as well as what health outcomes it has produced, are important policy questions.

Objective: To examine resource utilization patterns and health outcomes under the multiple payment methods in Thailand, focusing on assessing access to medicines and other medical technologies, treatment outcomes, and efficiency in resource use among beneficiaries of the 3 government health insurance schemes in Thailand

Methodology: Electronic dispensing database and medical records (in hard copy) during fiscal years 2003-2005 from 3 government hospitals were used in the assessment. Acute upper gastrointestinal bleeding (AUGIB), chronic epilepsy, and non-small cell lung cancer were employed as tracer diseases. Outcome measures in this study follow key outcomes identified in standard practice guidelines. Costs are hospital costs. Chi-square and odd ratio were used to assess the effects of payment methods on access to care. Cost-effectiveness technique was used to assess impacts of payment methods on efficiency of health care services.

Results: Where new versus conventional medicines are both available, patients whose insurer pays on a fee-for-service basis tended to have greater access to new drugs (31% for epileptic drugs and 67% for lung cancer drugs), compared to patients whose insurer pays on a capitated or case basis (19% and 13% for epileptic drugs and 10% and 19% for lung cancer drugs). Similar patterns were found where there are options between originator versus generic drugs, drugs in different dosage forms, and more versus less advanced diagnostic technologies. For AUGIB and lung cancer, treatments in the closed-end insurance programs were more efficient. For epilepsy, the open-end system rendered more efficient services; 20% more epileptic patients in the open-end payment scheme became seizure-free than those in the closed-end systems.

Conclusion: The utilization of more expensive items differs between patients whose insurers pay on a closed- or open-end basis. Effects of insurance payment are more pronounced where price gaps among the medical technologies are significant. Efficiency results are mixed, depending on nature of the disease conditions and type of resources required for treatment.

Funding source: No funding support

718-Hirunrassamee-_a.pdf
718-Hirunrassamee-_b.ppt
718-Hirunrassamee-_c.pdf