Pharmacoeconomic Research and Policy in Greece

(John Yfantopoulos D-Phil, was the program co-chair of the ISPOR 11th Annual European Congress, 8-11 September 2008, Athens, Greece)

The ISPOR 11th Annual European Congress, "Moving and Improving Concepts & Evidence for Health Care Decisions" takes place in the ancient city of Athens and brings together researchers, experts, and policy makers from all over the world to participate in a constructive debate on outcome research and pharmcoeconomic policies.

In 450 BC Athens, Pericles in his address to the Athenians argued: “We Athenians, as individuals, take our own decisions on policy or submit them to proper discussions: for we do not think that there is an incompatibility between words and deeds; the worst thing is to rush into action before the consequences have been properly debated” Pericles' Funeral Oration (Thucydides (460-400 B.C.).

The aim of this paper is to provide a brief overview of pharmacoeconomic research and policies in Greece and to draw some comparisons with the rest of the European States.

Greece joined the European Union in 1981 and since its membership an impressive economic performance has been recorded in economic growth, fiscal consolidation, and overall converging trends with the rest of the Western European Member States. Real GDP growth outstripped the EU average growing at a rate of more than 4.5% in 2006, budget deficit was reduced to 2.6% of GDP, unemployment went down to 8.9% and the inflation rate fluctuated around 3%. The total land area amounts to 131,944 km2 and the population of 11.1 million inhabitants.

Health Policies

All the European Member States have faced over the last two decades increasing demands for more and better quality health services. Given the commitment of the European health models [1] to the principles of efficiency, effectiveness, equity and universality in the access to health services several reforms have been introduced aiming at improvements of health outcomes at a cost effective way.

The health system in Greece presents the features of the Southern European models based on the mixture of 1) insurance based principles in the finance and delivery of health services (Bismark -German model), and 2) the universality in coverage, access and utilization of services (Beveridge - Anglo-Saxon model). Health care is provided by a three party system i.e. 1) the public sector (national health service NHS); 2) the insurance organizations; and 3) the private sector. The Ministry of Health and Social Solidarity is responsible for the overall organization, financing and delivery of health services. The Ministry of Employment and Social Protection finances the services provided by the insurance funds and the private sector functions on a contracted base with insurance funds and provides private hospital, consultation and diagnostic services. Greece in the 2000's has introduced new reforms aiming at the interaction between the public and the private sectors and the development of publicprivate initiatives. According to the Eurobarometre statistics on public's satisfaction with health care reforms only 18.8% of the Greek population declare that the health system runs well or minor changes are needed. The corresponding average for the EU-15 countries is 43.9%.

Health Status

Over the past five decades, life expectancy and health status have risen steadily in the European population. The gain in life expectancy since 1950's, in the EU-27 countries is estimated to be around 10 years on average. Life expectancy at birth stands in 2006 at 82 years for women and 76 for men. Throughout the European Union, (EU-27) women live longer than men. The southern member states have made great strides to close the gap with the northern countries. Eurostat forecasts reveal that life expectancy is expected to reach the level of 84 years for women and 78 years for men by the year 2020.

Similar improvements in longevity and health status have been recorded in Greece, which is ranked at a high level with increasing life expectancy, and declining infant mortality. Life expectancy has been constantly increasing since 1950's reaching the level of 77.2 years for men and 82 years for women for 2006.

Infant mortality has declined significantly over time in Greece from 43.52 infant deaths (per thousand live births) in 1955, to less 3.7 infant deaths (per thousand live births) in 2006. The main causes of death in 2006 were cardiovascular diseases accounting 30% of total deaths, neoplasms (24.6%), cerebrovascular (16.4%) and respiratory diseases (7.8%). The health gains observed in Greece over the last three to four decades are mainly attributed to improvements in living conditions, Mediterranean diet, better access to health services and pharmaceutical care. This argument is supported by several health interview surveys conducted by research units and academic institutions.

Health Related Quality of Life Research

The academic and research community in Greece, following the ISPOR tradition have explored several methods in measuring health status of the population, or sub-groups of populations as well as the health outcomes of several pharmaceutical therapies. Both populations based (generic), and disease specific instruments have been translated, validated and culturally adopted in order to assess health related quality of life. The Short Form 36 (SF -36) the EQ-5D the 15D are some indicative generic instruments used for the measurement of health status. These instruments were incorporated in large health interview surveys conducted by research and university institutions. In addition a number of studies have attempted the measurement of HRQOL using specific instruments for certain disease categories like neoplasm, rheumatoid arthritis, schizophrenia, haemophilia, and heart failure. Some studies have been presented in several ISPOR conferences.

Health Expenditure

By European standards, Greece is classified among the high spenders on health services. On the average (EU-15) around 9.1% of the European GDP goes for health expenditure. The corresponding figure in Greece is 9.5% of the GDP [2]. Analyzing the evolutionary process of health expenditure in Greece as percentage of GDP over the period 1960-2005 we may distinguish different faces of development. In the early 1960's the health sector in Greece was under developed and only 2.9% of GDP was allocated to health sector, (a figure which is very low by international standards). In the 1970's and 1980's a marked increase was observed attributed to primary health reforms and the modernization of health services. The decades 1990's and 2000's were characterized by the vast expansionary process of private initiatives in primary and hospital care leading to a substantial increase of private health expenditure. In 2005, Greece represents the only Country in the European Union with the lowest proportion of public expenditure and the highest share of private expenditure. At the EU-15 level the proportion of private expenditure represent around 20% to 25% of the total health expenses. In Greece the corresponding figure is around 45% which is the highest in EU-25 and very close to USA private expenses.

Pharmaceutical Expenditure

According to OECD health data, Greece spent US$377 PPP per capita on pharmaceuticals in 2004, an amount which is very close to the OECD average of US$393 PPP. Compared to other Southern European Countries (Italy US%520 PPP, Spain US$477 PPP, Portugal US$412 PPP) Greece spent less. Although the problems with cross national comparisons of pharmaceutical expenditure are well known, Joseph Newhouse (1977) [3] and a number of health economists identified a strong positive relationship between per capita health spending and per capita GDP. In Figure 1 we present the relationship between per capita pharmaceutical expenditure (vertical axis) and GDP per capita (horizontal axis) for 17 EU member states. The results do not confirm the findings of the literature of a strong linear relationship between health expenditure and GDP. An inverted U relationship is found with three distinguished groups of countries. The first group includes the economically less developed States (Poland, Hungary, Slovakia, Czech Republic) with relatively low per capita pharmaceutical expenditures. The second group includes the Southern European countries and France with the highest per capita pharmaceutical expenditures. Finally in the third group belong countries like Denmark, The Netherlands and Sweden with extensive cost containment and price control policies resulting to relatively lower per capita pharmaceutical spending. Further analysis is required in this area to investigate the impact of pharmaceutical policies on pharmaceutical expenditure.

Figure 1 Relation between per capita health expenditure and GDP per capita

European Health and Pharmaceutical Policies

According to the European Commission's strategy plan (2008-2013), the member states are essentially responsible for the health of their citizens. Health is in the heart of European policies and it is taken both as improvements of health status as well as the outcome of health services. However, health decisions are taken at a national level because in several treaties it is stated that the European Commission undertakes measures and policies to supplement the work of the Member States.

The pharmaceutical sector in the European Union is marked by divergent policies and a fragmentation of the national markets. Substantial differences exist among the member states in the finance and delivery of health services and pharmaceutical care, the epidemiological profile, the standards of living and the demand for and supply of pharmaceutical products. The objective of the European Commission for the completion of a single European pharmaceutical market aims at the demand side to improve patients' access to effective medicines at an affordable price and at the supply side to create incentives for innovative research and sustainable industrial development.

The European governments implemented a mixture of health and economic policies to curb the expansionary trends of pharmaceutical expenditure. A wide range of pricing policies was implemented based on product price control, reference pricing (Germany, the Netherlands and elsewhere) and profit control (U.K). Furthermore, the potential substitution of more expensive proprietary brand drugs to generics was proposed, but only a few countries gave the permission to pharmacists to prescribe. Positive lists with reimbursed medicines or negative lists with non-reimbursed medicines were issued by the European Health Authorities in an attempt to control pharmaceutical expenditures. Copayments were also introduced requiring patients to cover a proportion of the cost of the prescribed drugs. Finally the prescribing behavior of physicians was controlled by issuing guidelines, providing information on less expensive therapies and introducing budgetary controls. The level of success in the implementation of the pharmaceutical reforms varies enormously among the European Countries depending on o large number of factors such as prescribing patterns, industrial policies, and public health measures just to mention a few.

Greek Pharmaceutical Policies

In 1998, Greece introduced a positive list, and the lowest reference pricing system among the fifteen European Member States with the purpose to curb the growth of pharmaceutical expenditure. The measures proved to be ineffective [4] since pharmaceutical expenditure, after a short-term temporary reduction, continued to increase at similar rates to those before the introduction of price control mechanisms. Over the period 1998 to 2004, according to OECD data, the annual rate of growth of pharmaceutical expenditure in Greece was 8 percent, which is among the highest in the OECD countries. (Average OECD 6.1%).

On May 8th 2006, the legislative act No 3457 was enacted aiming at a substantial reform of the pricing and reimbursement system. The main aim of the Law act 3457 was to alter the focus of the pharmaceutical policy in Greece from the negative reimbursement list to a more pioneered method aiming at the control of prescribing patterns and reimbursement rates. More analytically, the legislation claimed to ensure equity in terms of access to medicines, improvements in citizens' quality of life, effective and efficient utilization of health resources, transparency in public management, protecting public health, and maintaining a long term financial viability of the insurance system. An innovative aspect of the legislation was the establishment of a rebate system granting the National Insurance Funds a rebate rate paid by the pharmaceutical companies.

Pricing and Reimbursement Policies

Pricing
In Greece a prerequisite for price setting is the marketing of the product in at least one European country. The responsibility for the pricing of pharmaceuticals lies with the Ministry of Development, which issues official prices subject to the consent of the Ministry of Health. The prices of pharmaceuticals are regularly published in a Price Bulletin which is distributed to all pharmacies.The price regulation process is based on an agreement between the Country's Health Authorities and the Pharmaceutical Industry. Prices for all medicinal products which are manufactured, packaged or imported in Greece are determined by the Ministry of Development on the basis of the three lowest prices among the EU countries, two of which are selected from the previous EU-15 states including Switzerland and the third from the new accession countries that joined the EU after 2004.In 2005, the average pharmaceutical price index in Greece was 75, one of the lowest in EU (EU 25 price index = 100). The highest prices were in Germany (128) Denmark (121) Ireland (119) and Italy (118).

Reimbursement
According to the Law act 3457 enacted in May 2006, all prescribed medicines are reimbursed by the Social Insurance Organizations. The only non-reimbursed products are the over the counter (OTC) and lifestyle drugs. The new system is expected to increase patient access to new and effective drug therapies. However the new system does not take into account the vast European experience on economic evaluation and health technology assessment. A large number of European countries have introduced economic evaluation in their reimbursement decisions for pharmaceutical price regulation. Cost effectiveness and cost utility criteria have been used extensively in Finland The Netherlands, Austria, Belgium, Denmark, Ireland, Italy and Portugal. In the U.K the National Institute for Clinical Excellency (NICE) undertakes a more rigorous approach to economic evaluation.

Greece is at a crossroad of reforms. The ISPOR 11th Annual European Congress in Athens, Greece would contribute to the debate in implementing effective and efficient reforms in the health and pharmaceutical sectors.

REFERENCES

[1] European Commission. The Social Situation Report in the European Union 2005-2006. European Commission and Eurostat. Luxemburg.

[2] OECD Health Data 2007. OECD publications Paris.

[3] Newhouse JP. Medical Care Expenditure: A Cross -National Survey. J Human Res 1977; 12:115-125

[4] Yfantopoulos J Pharmaceutical pricing and reimbursement reforms in Greece. European J Health Econ 2008;9:87-97.

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