Projected impact of demographic change on the demand for pharmaceuticals in Ireland

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Health & Medicine

Published on November 12, 2009

Author: iphadotie

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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.

Projected impact of demographic change on the demand for pharmaceuticals in Ireland Kathleen Bennett Department of Pharmacology & Therapeutics, Trinity College, National Centre for Pharmacoeconomics Dublin

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

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

 

 

Product Mix: Prescribing of newer more expensive medications: Omeprazole Lansoprazole Esomeprazole Pantoprazole Rabeprazole Atorvastatin Pravastatin Simvastatin 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:

Product Mix:

Prescribing of newer more expensive medications:

Omeprazole

Lansoprazole

Esomeprazole

Pantoprazole

Rabeprazole

Atorvastatin

Pravastatin

Simvastatin

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

Four major community schemes General Medical Services (GMS) Drug Payment Scheme (DPS) Long Term illness (LTI) High tech drug (HTD)

General Medical Services (GMS)

Drug Payment Scheme (DPS)

Long Term illness (LTI)

High tech drug (HTD)

Community Drugs Schemes Approximately 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. % taken from HSE – PCRS 2006 annual report 14% 0.46% - High Tech Drug (HTD) 7.4% 3.9% 2.51% Long Term Illness (LTI) 18% 21.5% 36.03% Drugs Payment (DP) 60% 73.4% 28.85% General Medical Services (GMS) % expenditure % prescriptions (55 million items) % population Scheme

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.

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.

Number of GMS eligible patients by age (2006)

Average cost (ingredient) per year by age and gender (2006)

Average number of items per year by age and gender (2006)

Average ingredient cost/item and items/form 2000-2007

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.

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).

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

Total projected prescription items - GMS, DPS and LTI scheme 110 million items

Total projected ingredient costs – GMS, DPS and LTI schemes € 2.4 bn in 2021

Total prescription items by scheme – projected use model 76% GMS; 18.5% DP; 5.5% LTI scheme for distribution of items in 2021 67% GMS; 24.5% DP; 8.8% LTI scheme for distribution Ing costs in 2021

Sensitivity analysis for predicted prescription items

Sensitivity analysis for predicted ingredient cost

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

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. P rice 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. Pharmaco e conomic assessment .

1. P rice 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. Pharmaco e conomic 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.

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

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

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