Presentation (CTI)

OBJECTIVES: Pharmaceutical expenditure raise faster than the income basis of the German Social Health Insurance (SHI) putting pressure insurance premiums. This study analyses the contribution of volume and price developments on total pharmaceutical expenditure, including originator drugs and generics/biosimilars - thus acknowledging the dynamic effects of new drug launches and loss of exclusivity.
METHODS: Annual net pharmaceutical expenditure after accounting for co-payments and rebates between 2000 and 2024 are the baseline for real expenditure development. Data source: annual financial reports of the SHI. Projected expenditure growth is based on net expenditure in 2000 and forecasted in three scenarios: 1) expenditure growth induced by volume, measured by the defined daily doses (DDD); data source: Arzneiverordnungsreport. 2) expenditure growth induced by general price inflation serving as benchmark for price development; source: Federal Statistical Office. 3) expenditure growth induced by the combined effect of volume and inflation. Compound annual growth rates (CAGR) over 25 years are compared between the projected and real development. Sensitivity analysis are conducted on shorter time periods.
RESULTS: From 2000 to 2024, increased volume induced a projected expenditure growth of 2.4% p.a., inflation accounts for a growth of 1.9% p.a. Both factors combined induce a growth of 4.4% p.a. Real expenditure growth was 4.4% p.a. After accounting for inflation, average drug prices per DDD were stable. The results, showing that real expenditure grows in line with growth in demand and inflation, were similar when analysing shorter time periods.
CONCLUSIONS: Volume drives overall pharmaceutical expenditure growth more than general price developments. The price regulations in the German SHI and the dynamics resulting from generic competition are able to control average drug prices. Financial reforms of the SHI needs to find ways to cope with increased demand for medicines.