Japan's aging population. Implications for healthcare

In the early years of the next century, the Japanese population may well become the oldest in the world. The Japanese government's concentration on post-World War II economic expansion meant that the government only fully woke up to the financial implications of having a large elderly population when oil prices were raised in the 1970s, highlighting Japan's economic dependence on global markets. This article explains the process by which policy regarding Japan's elderly developed both before and after these oil price increases. The measures of healthcare cost containment that the government introduced in response to the increased financial pressure are described, with a particular focus on pharmaceuticals. This article shows that the government has achieved a degree of success in terms of containing pharmaceutical costs, but that future effects on the quality of healthcare are uncertain. Ultimately, a wider application of a per diem fee in place of the prevalent fee-for-service system, and the realisation of plans to improve the social service infrastructure, would be the best path for policy to follow.     

Economic evaluation of pharmaceuticals: a European perspective

In recent years there has been a large increase in the number of economic evaluations of pharmaceuticals. Many of these studies have been commissioned by individual pharmaceutical companies, in support of new or existing products. In 2 countries, Australia and Canada (in the province of Ontario), draft guidelines issued by the government have outlined the requirements for economic evaluations to be submitted in support of requests for reimbursement (government subsidy) of particular products. One consequence of the guidelines is that they clarify what is required, and in specifying the procedure for submission of dossiers, identify a clear audience for the economic evaluation. In contrast, the situation in Europe is diverse. A wide range of healthcare systems exist, including national health services and more liberal systems, involving a wide range of insurers and providers. European countries also differ widely in their approach to the pricing and reimbursement of pharmaceuticals. Because of this diversity, the nature, conduct and impact of economic evaluation in Europe is not clear. It is therefore difficult for pharmaceutical companies to develop appropriate strategies for economic evaluation and for analysts to decide on appropriate study methodology. This article reviews the nature of any official guidance or requirements for economic evaluation, the potential for use of economic evaluation, the range of studies carried out and the identifiable impacts. There is currently no official guidance in any country, although some countries are considering issuing guidelines. In some countries there is official encouragement to pharmaceutical companies to undertake studies, and where economic data have been presented they have been considered by the relevant committees. The potential uses of economic evaluation vary widely from country to country. These can be classified in terms of a potential role in undertaking national price negotiations, deciding on reimbursement status or copayment level, deciding on inclusion in local formularies or in treatment guidelines, or in improving prescribing decisions. Approximately 80 economic evaluations of pharmaceutical products have been conducted to date in Europe, covering a wide range of clinical areas. There are relatively few examples of identifiable effects of such studies. In part this is because it is often difficult to assess the part played by various items of data. Nevertheless, the overriding conclusion is that economic evaluation of medicines is likely to be more relevant in Europe in the future. The problem for the pharmaceutical industry is in determining when and how.     

欧盟国家药品支出控制政策工具述评

目的:为我国药品价格管理体制的完善提供参考。方法:将药品支出控制政策依照政策作用主体的不同分为作用于药品供给系统和需求系统两大类。其中药品供给系统依据药品流通环节分为药品生产商、药品流通商和药品零售商3类,药品需求系统分为医师和患者2类。依此框架对欧盟国家使用的药品支出控制政策工具进行归类并根据已有研究对其效果和优缺点进行述评。结果与结论:药品支出控制政策工具的选择与应用与一国国情相关;无完美的单一政策工具,一国的药品费用控制机制多由一系列政策工具组合而成;需要建立药品支出控制政策工具不良影响弥补机制。     

Guidelines for economic analysis of pharmaceutical products: a draft document for Ontario and Canada

In Canada, provincial formulary review committees consider the effectiveness, safety, and cost of products when they derive advice for each Minister of Health. This article offers a draft set of guidelines for pharmaceutical manufacturers making submissions which include economic information, moving beyond a simple presentation of the unit price of the pharmaceutical product (e.g. price per day or course of therapy) and comparison to similar prices for alternative products. A full economic analysis compares all relevant costs and clinical outcomes of the new product with alternate therapeutic strategies for treating patients with a particular condition. The perspective of the decision maker must be clearly identified. The quality of the evidence supporting estimates of the variables incorporated in the analysis should be evaluated. Sensitivity analyses are used to assess the robustness of the qualitative conclusions. Reviewers will examine the answers to a set of 19 questions. Manufacturers can use these questions as a worksheet for preparation of an economic analysis to be incorporated in a submission. These guidelines are intended to be a starting point for further refinement, and discussion with health economists in industry and academia. Considerable flexibility will be used in reviewing documentation supporting economic analysis. Those preparing submissions should be encouraged to experiment with various approaches as part of the general development of this field and to engage provincial review committees in ongoing discussions.     

Disease management. A global cost-containing initiative?

Disease management has been marketed by healthcare industry providers as a way of improving resource allocation in healthcare and containing costs. However, to achieve improved efficiency in healthcare requires the guidelines and protocols in the disease management process to be based on sound evidence of effectiveness and cost effectiveness. This has not always been the case. The approach itself has an inadequate evidence base in terms of randomised controlled trials, other rigorous methods of evaluation and the results of economic evaluation. Disease management can be viewed as an attempt by pharmaceutical companies to undertake forward vertical integration into other parts of the healthcare process. This could reduce uncertainty for purchasers and reduce transaction costs, thereby potentially facilitating both healthcare expenditure control and efficiency. However, such cost savings may be outweighed by a concentration of power in disease management (pharmaceutical) companies, and the exploitation of such power to inflate expenditure and misallocate resources. Disease management must be appraised with care.     

Economic analysis as an aid to subsidisation decisions: the development of Australian guidelines for pharmaceuticals

Factors governing the entry of new drugs into clinical practice are changing, with increasing emphasis on economic issues. In future, organisations that subsidise the use of pharmaceuticals are likely to require sponsors to provide evidence of the cost-effectiveness of their products. The first national government to signal such an intention is the Commonwealth Government of Australia, which from January 1993 will require economic analyses in support of applications for listing of new pharmaceutical products on its schedule of pharmaceutical benefits. This move is underpinned by legislation that requires the country's Pharmaceutical Benefits Advisory Committee (PBAC) to consider costs and effectiveness when recommending listing of new drugs. The approach that has been recommended to the Committee is based on advice from a group of consultants, health economists and clinicians. The PBAC will use economic analyses as an aid to decision-making that will remain within a clinical framework; the viewpoint will be societal, and analyses will include costs that fall outside the pharmaceutical benefits scheme. The preferred approach is comparative cost-effectiveness analysis with a particular emphasis on the marginal costs of obtaining additional health benefits with new drugs, compared with existing therapies. The use of analyses that are restricted to potential cost savings with new drugs is discouraged, as is the inclusion of indirect costs and benefits. To facilitate the conduct of economic analyses, it is planned to hold meetings with specialist clinicians to obtain consensus on a range of intermediate clinical outcome indicators, and to publish lists of 'standard' Australian costs that will be updated regularly. The approach being followed in Australia has implications for both the government and the pharmaceutical industry. The responsibility for monitoring the effects of this new policy lie with the government. The success, or otherwise, of the policy should not be gauged simply by the effects on the price of new drugs which, historically, have been relatively low in Australia. A full evaluation will require that more effort be put into clinical outcomes research and the development of population databases, an area in which Australia lags behind other countries.     

Design, analysis and presentation of multinational economic studies: the need for guidance

Over the last decade, there has been a proliferation in the number of economic evaluations of pharmaceuticals to meet the growing demand for information about the economic benefits of healthcare technologies. The majority of these studies have been commissioned by pharmaceutical companies for the purposes of drawing attention to the resource and quality-of-life aspects of new or existing products. Such information has become important in overcoming a new obstacle, namely the demonstration of cost effectiveness (the so-called 'fourth hurdle'), in addition to the three well-established criteria of quality, tolerability and efficacy. To ensure the maintenance of standards, guidance for economic evaluations has emerged lately in the form of guidelines, regulations, principles, policies and positions. Drummond outlined three purposes of these guidelines, as follows: as a requirement prior to reimbursement, as statements of methodological standards, and as a statement of ethical standards. Such guidelines are designed to assist both the economic analyst and the decision-maker. In laying out the state of the art regarding the methodology of economic evaluation, guidelines assist the analyst in performing high-quality, scientifically valid studies, and assist the decision-maker in properly interpreting and assessing their quality. In response to these growing requirements for cost-effectiveness data globally, it has become increasingly common for economic evaluations to be conducted on an international scale. However, the recommendations in pharmacoeconomics guidelines regarding the manner in which these multinational economic evaluations should be designed, analysed and presented are too limited to be of any real value. This article examines the various issues that must be taken into consideration when conducting multinational studies, and provides a review of the techniques and approaches that have been suggested to date. It concludes with recommendations for potential inclusion in future sets of pharmacoeconomic guidelines.     

The increasingly complex fourth hurdle for pharmaceuticals

There are three known criteria that underlie drug reimbursement decisions: therapeutic value, cost effectiveness and burden of disease. However, evidence from recent reimbursement decisions in several jurisdictions points to residual unexplained variables, one of which may be budget impact. An economic rationale for carrying out budget impact analyses is opportunity cost, measured by the economic benefits foregone by using resources in one way rather than another. Under certain assumptions, cost-effectiveness analysis accounts for opportunity cost while conveying to the decision maker the price of maximising health gains, subject to a budget constraint. However, the underlying assumptions are implausible, particularly in the context of pharmaceutical care. Although drugs that are cost effective may lead to unambiguous health gains among patient groups for whom the drugs are indicated, the opportunity costs could conceivably lead to a reduction in aggregate health gains, or failure to meet different kinds of equity considerations. The pertinent policy question is where to find the resources to fund new innovations, such as cost-effective pharmaceuticals, or drugs targeting severe diseases. It may be a matter of redeployment of resources across healthcare sectors, cancelling the funding of (older) pharmaceuticals that are less cost effective, or delisting drugs that are cost effective but target less burdensome conditions.     

Incorporating pharmacoeconomic principles into hospital pharmacy practice

Cost analysis, cost containment, and cost reduction are realities in today's health care environment. Discussions of cost must also include an analysis of the consequences of economic decisions so that a balanced perspective can be presented to health care decision makers. The basic principles of pharmacoeconomics can be used to provide information about the cost and consequences of therapy. To ensure a high quality of pharmaceutical care, it will become necessary to use this scientific information to make therapeutic decisions and recommendations.     

Pharmaceutical cost containment and quality care. Conflict or compromise?

Existing methods of pharmaceutical cost containment are relatively primitive weapons of expenditure restraint. Their effectiveness is generally limited to short term savings. The conflict between cost containment and quality is epitomised by the 'Drug Budget', which conditions payers to regard pharmaceuticals solely as a cost input without considering the results of their use in terms of integrated health outcomes, crossing the budgetary boundaries between drugs, hospitals, ambulatory and other forms of healthcare. A further problem, also related to the separation of inputs from outcomes, is the contention by healthcare payers that, even if 'expensive' innovative drugs offer Value for Money, budget holders cannot afford the required Money for Value. The limits of affordability are real in poor countries. In rich industrialised nations, the affordability of quality is in essence a political rather than an economic issue. In making choices and determining priorities, elected governments are usually responsive to public opinion, which is coming to regard the issue of quality in healthcare as one of the highest social priorities. Pharmaceutical innovation has much to contribute to quality in healthcare. A compromise between pharmaceutical cost containment and quality is feasible, based on input/outcome considerations, rational drug pricing, and re-engineering decision-making by payers away from the simplistic notion that the cheapest drug budget is necessarily the best.     

Penny and pound wise: pharmacoeconomics from a governmental perspective

Because of growing pressure on the healthcare budget in The Netherlands, appropriate justification of current expenditures and future investments in public healthcare are becoming increasingly important. Therefore, the Dutch Ministry of Health, Welfare and Sport is expanding its use of pharmacoeconomic evaluation in informed reimbursement decision-making of new pharmaceuticals. Since June 2002, pharmaceutical companies have been invited to submit a pharmacoeconomic dossier with their reimbursement applications of innovative drugs. As of January 2005 submission of a pharmacoeconomic dossier is mandatory for all drugs claiming to have therapeutic value. Currently, several European governmental and non-governmental organisations are making efforts to harmonise pharmacoeconomic research guidelines at the EU level. Ultimately, this may facilitate a more efficient way of conducting pharmacoeconomic research and encourage the use of pharmacoeconomic data by national assessment agencies and governments. It is anticipated that international pharmaceutical companies will increasingly invest in pharmacoeconomics while government staff will become more experienced in appraising the dossiers, thus resulting in an upward momentum in the quality and usability of pharmacoeconomic data. From the Dutch government's perspective, the use of pharmacoeconomic evaluation in reimbursement decision-making should offer a true opportunity for pharmaceutical companies to present the added value for money of new drugs. Using pharmacoeconomic data, costs, benefits and effects of pharmaceuticals are increasingly being considered from a societal perspective, thus going beyond the sole consideration of the impact on the pharmaceutical budget.     

我国医药产业转型期政府失灵分析

目的:为克服和纠正医药产业转型期"政府失灵"现象,提高政府管制的有效性提供参考。方法:分析我国医药产业转型期政府失灵的表现、成因,针对存在的问题提出对策。结果与结论:要解决由于权力寻租、政府机构低效率、价格制度不完善等原因引起的政府失灵问题,从而保障我国医药行业的成功转型,需要转变政府职能,提高政府效能,建立合理的药品价格管理制度。     

A case for the adoption of pharmacoeconomic guidelines in Japan

In recent years, more and more Japanese pharmaceutical companies have been submitting pharmacoeconomic data to the government, following the official request that such data may help in setting pharmaceutical prices. The companies have cooperated because, by doing so, they could influence pricing decisions for new products. However, the quality of these data at present is considered to be poor and heavily biased. The introduction of pharmacoeconomic guidelines that outline a set of standardised factors to be included in evaluations are necessary, so that an appropriate comparison of the cost effectiveness of the many new drugs that are introduced into the Japanese market each year can be made. In addition to supporting the development of standardised guidelines, the Ministry of Health and Welfare should clarify how pharmacoeconomic data are to be used to aid policy decisions and also mandate the publication of pharmacoeconomic data.     

The pricing and reimbursement of pharmaceuticals

This paper identifies common research themes arising from the papers on the pricing and reimbursement of pharmaceuticals presented elsewhere in this supplement. These include the following: How effective has cost containment been? What is the base case against which this is measured? Is there any evidence that research and development is changing in value or character as a result? How can the implied contract between government and industry be made more explicit to avoid opportunistic behaviour?     

试论与取消医院药品加成相关联的政策措施

目的:解决药品在医院流通的成本问题,确保医院长期健康、稳定、有序地运行与发展。方法:通过介绍医院药品运行管理的基本特征及相关情况,针对医改试点中取消医院药品加成而出现的医院收入短缺问题提出意见与建议。结果与结论:医院的药品运行管理是一个与诸多因素相关联的复杂的系统管理,既需要具备专业技术资质,又需要有人力、知识技术、仓储和设备以及资金投入等。而取消医院药品加成是一个综合性的政策措施,在取消不应该收取的费用的同时,应该开启新的成本回收方式或渠道,适当调整医疗服务价格和增加政府投入;同时,需要制定合适的药事服务收费额度,并适当提高医疗服务价格。     

Dynamic competition as an exploratory model of healthcare policy for the antihypertensive market

Dynamic competition based on innovation, rather than classical competition based on price, may better explain the research-intensive pharmaceutical market. In an exploratory comparison of these models, economic indicators of annual change in price and price elasticity of demand were tested in a repeated-measures design by analysis of variance. Between 1990 and 1992, updated US prescribing guidelines for hypertension provided a framework in which the contrast between 2 newer classes and 2 older classes of first-line therapies served as a marker for innovation. The principal hypothesis was that newer classes would be less elastic than older classes, but with such innovation-based differences eroding over time. Although temporarily greater inelasticities for newer classes supported dynamic competition, initially extreme inelasticities for newer classes indicated a market distortion or a shifting demand curve. These exploratory results, although requiring substantiation, point toward using dynamic competition in crafting healthcare policy for the pharmaceutical market.     

The future research agenda. A view from the pharmaceutical industry

As a responsible partner in healthcare systems, the pharmaceutical industry hopes to see a research agenda on pharmaceutical issues that will provide more information on trends in healthcare reform affecting medicines. Urgent questions include whether some forms of cost containment are harming innovation and the quality of care, and what constructive alternatives to policies such as reference pricing can the industry offer?