projected impact of demographic change on the demand for pharmaceuticals in ireland
DESCRIPTION
Presentation delivered by Dr Kathleen Bennett, Department of Pharmacology and Therapeutics, Trinity Centre for Health Sciences, St James’s Hospital at the Irish Pharmaceutical Healthcare Association Meeting 2009.TRANSCRIPT
Projected impact of demographic change on
the demand for pharmaceuticals in Ireland
Kathleen BennettDepartment of Pharmacology &
Therapeutics,Trinity College, National Centre for
PharmacoeconomicsDublin
Pharmaceuticals
Prescribing of medicines is one of the most common healthcare interactions
Majority of pharmaceutical expenditure in primary care (86%)
In 2006, total ingredient cost €1.1 bn, in 2007, had risen to €1.26bn
Total Expenditure on medicines (Community Drug Schemes 1991-2007)
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1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
Mill
ion
s (
eu
ro)
•Product Mix: Prescribing of newer more expensive medications:
OmeprazoleLansoprazoleEsomeprazolePantoprazoleRabeprazole
AtorvastatinPravastatinSimvastatin
• Volume effect: Growth in the number of prescription items Number of eligible GMS persons ~10% over last decade. Number of items prescribed almost doubled between 1995-2005
•Increased evidence based prescribing (e.g. statins)
•Changes in terms of eligibility criteria. Increase in elderly population
9.91% of GMS expenditure 2006 (€75 million)
10.1% of GMS expenditure 2006 (€76 million)
The main reasons driving such growth in pharmaceutical
expenditure include:
Four major community schemes
General Medical Services (GMS) Drug Payment Scheme (DPS) Long Term illness (LTI) High tech drug (HTD)
Community Drugs SchemesApproximately 85% of total drug expenditure is through the Community Drugs Schemes. Three schemes cover 2.9 million (67%) of population.
Ingredient cost was €1.1 billion in 2006 for first 3 schemes.Scheme %
population% prescriptions (55 million items)
% expenditure
General MedicalServices (GMS)
28.85% 73.4% 60%
Drugs Payment (DP) 36.03% 21.5% 18%
Long Term Illness (LTI)
2.51% 3.9% 7.4%
High Tech Drug (HTD) - 0.46% 14%
% taken from HSE – PCRS 2006 annual report
General Medical Services GMS scheme (as of Sept 2008)
Available to all over 70 years of age (from July ’01); now no longer available to all over 70 years
Means tested for those under 70 years Important implications for the likely future
costs Population over 70 years is growing relatively
rapidly in both absolute and relative terms. Rapid increase in uptake and expenditure
of medicines in Ireland over recent years.
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50
100
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<5 5-1112-15
16-24
25-34
35-44
45-54
55-64
65-69
70-74
75+
Nu
mb
er o
f el
igib
le p
atie
nts
('0
00s)
Number of GMS eligible patients by age (2006)
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<5 5-11 12-15 16-24 25-34 35-44 45-54 55-64 65-69 70-74 75+
Mea
n i
ng
co
st/p
atie
nt/
year
M
F
Average cost (ingredient) per year by age and gender (2006)
Average number of items per year by age and gender (2006)
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30
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70
<5 5-11 12-15 16-24 25-34 35-44 45-54 55-64 65-69 70-74 75+
Mea
n i
tem
s/p
atie
nt/
year
M
F
Average ingredient cost/item and items/form 2000-2007
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5
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15
20
2000 2001 2002 2003 2004 2005 2006 2007
Ave
In
g c
ost
/ite
m
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0.5
1
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3.5
Ave
ite
m/f
orm
Average Ing cost/item Average items/form
Methodology for projections 2006 used as the base year; projections
from 2007-2021 Age-sex population projections from
Morgenroth Projected use model
Applied adjusted trends from 2002-2006 in age-sex specific GMS prescribing rates and costs/patient to project future trends 2007-2021
Assumes increasing trend will continue over time.
Projected use model - Assumptions
For LTI and DPS scheme – age/sex specific data not available. Applied overall prescribing and cost data per patient.
Assumed the same proportion of patients in GMS/DPS/LTI schemes in 2006 applied throughout.
Assumption that 20% of scripts off patent drugs and applied 20% reduction in costs (IPHA 2006).
Projected use model
0
5,000
10,000
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35,000
2007
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2021
Nu
mb
er o
f It
ems
('00
0s)
<5 5-11 12-15 16-24 25-34 35-44
45-54 55-64 65-69 70-74 75+
Total projected prescription items - GMS, DPS and LTI scheme
110 million items
0
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2007
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2021
To
tal i
ng
red
ien
t co
st (
'000
eu
ros)
<5 5-11 12-15 16-24 25-34 35-44 45-54
55-64 65-69 70-74 75+
Total projected ingredient costs –
GMS, DPS and LTI schemes€2.4 bn in 2021
Total prescription items by scheme – projected use model
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Nu
mb
er o
f it
ems
('000
s)
GMS DPS/Private LTI
76% GMS; 18.5% DP; 5.5% LTI scheme for distribution of items in 202167% GMS; 24.5% DP; 8.8% LTI scheme for distribution Ing costs in 2021
Sensitivity analysis for predicted prescription items
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120,000
140,000
2007
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2021
-10%Trend Projected trend +10% Trend
Sensitivity analysis for predicted ingredient cost
€0
€500,000
€1,000,000
€1,500,000
€2,000,000
€2,500,000
€3,000,000
2007
2008
2009
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2018
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2021
('0
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)
-10% trend Projected trend +10% trend
Limitations Assumptions made Recent changes to schemes not factored in
Changes to eligibility in over 70 year olds IPHA agreement further 15% reduction post-
patent (from Jan ’09) and future changes to IPHA Only public spending No Pharmacy fee or VAT included, only
ingredient costs. No High tech scheme data. New treatments, changing expectations,
changing disease epidemiology not possible to predict
Key Changes to the Pricing and Reimbursement System
1. Price of new medicines linked to average European price.
2. Regular monitoring and revision of prices.
3. Price reductions for off-patent medicines (e.g. IPHA agreement 2006)
4. Pharmacoeconomic assessment.
Conclusions
Prescription items and costs are likely to continue to increase, particularly within the GMS scheme and with the increasing elderly population.
Estimated numbers of prescription items will increase from 54 million in 2006 to approx. 110 million in 2021.
Estimated drug ingredient costs are likely to increase from €1.1bn in 2006 to approx. €2.4bn by 2021.
Acknowledgements
Dr Lesley Tilson, Dr Michael Barry – National Centre for Pharmacoeconomics
HSE-PCRS for supply of data on which the study is based
HRB for funding