TY - JOUR
T1 - The impact of pharmaceutical policy measures
T2 - a structural-break approach
AU - Pita Barros, Pedro
AU - Nunes, Luís Catela
N1 - WOS:000280120100003
PY - 2010/1/1
Y1 - 2010/1/1
N2 - Pharmaceutical spending in many other countries has had a steep increase in the last decade. The Portuguese Government has adopted several measures to reduce pharmaceutical expenditure growth, ranging from increased co-payments to price decreases determined administratively. Promotion of generic consumption has also ranked high in political priorities. We assess the overall impact of the several policy measures on total pharmaceutical spending, using monthly data over the period January 1995 – August 2008. Endogenous structural breaks (time-series) methods were employed. Our findings suggest that policy measures aimed at controlling pharmaceutical expenditure have been, in general, unsuccessful. Two breaks were identified. Both coincide with administratively determined price decreases. Measures aimed at increasing competition in the market had no visible effect on the dynamics of Government spending in pharmaceutical products. In particular, the introduction of reference pricing had only a transitory effect of less than one year, with historical growth resuming quickly. The consequence of it is a transfer of financial burden from the Government to the patients, with no apparent effect on the dynamics of pharmaceutical spending. This strongly suggests that pharmaceutical companies have been able to adjust to policy measures, in order to sustain their sales. It remains a challenge for the future to identify firms’ strategies that supported continued growth of sales, despite the several policy measures adopted.
AB - Pharmaceutical spending in many other countries has had a steep increase in the last decade. The Portuguese Government has adopted several measures to reduce pharmaceutical expenditure growth, ranging from increased co-payments to price decreases determined administratively. Promotion of generic consumption has also ranked high in political priorities. We assess the overall impact of the several policy measures on total pharmaceutical spending, using monthly data over the period January 1995 – August 2008. Endogenous structural breaks (time-series) methods were employed. Our findings suggest that policy measures aimed at controlling pharmaceutical expenditure have been, in general, unsuccessful. Two breaks were identified. Both coincide with administratively determined price decreases. Measures aimed at increasing competition in the market had no visible effect on the dynamics of Government spending in pharmaceutical products. In particular, the introduction of reference pricing had only a transitory effect of less than one year, with historical growth resuming quickly. The consequence of it is a transfer of financial burden from the Government to the patients, with no apparent effect on the dynamics of pharmaceutical spending. This strongly suggests that pharmaceutical companies have been able to adjust to policy measures, in order to sustain their sales. It remains a challenge for the future to identify firms’ strategies that supported continued growth of sales, despite the several policy measures adopted.
KW - structural breaks
KW - Pharmaceutical expenditures
KW - Pharmaceutical expenditures
KW - Structural breaks
KW - Pharmaceutical policies
KW - Portugal
U2 - 10.1016/j.socscimed.2010.04.020
DO - 10.1016/j.socscimed.2010.04.020
M3 - Article
C2 - 20621744
SN - 0277-9536
VL - 71
SP - 440
EP - 450
JO - Social Science & Medicine
JF - Social Science & Medicine
IS - 3
ER -