OBJECTIVES: Austerity policies aiming at fiscal consolidation can be inefficient, if reduced pharmaceutical spending results in cost-shifting towards patients and the pharmaceutical industry, and lower population health levels, inducing moral hazard risks and increasing inequity. Objective of this study is to examine the effects of austerity policies in the form of clawback and rebates on the long-term sustainability of the pharmaceutical industry in Greece.

METHODS: Time series econometric modeling was used to assess current effects of austerities on efficiency and long-term sustainability of the pharmaceutical sector in Greece. Forecasting analysis was conducted using autoregressive distributed lag (ADL) econometric models until 2030.

RESULTS: Analyzing the evolution of outpatient pharmaceutical expenditure in Greece between 2010-2018, a significant public funding reduction (-76%) and an increase of pharmaceutical industry’s contribution (+419%) were observed. Clawback increased from €79mil in 2012 to €960mil. in 2020, a three-times higher rate (27.3%) compared to the EU average (8.6%). Estimating substitution parameters, between 2012-2019, a 10% reduction of public pharmaceutical expenditure imposed an increased financial burden in the industry in the form of clawback by 53% and in the form of rebate by 21%. In the absence of structural efficiency interventions and considering current trends, clawback levels are forecasted to reach €2,07bil. by 2030 (Standard Deviation +/- €323mil). Similarly, rebates increased from €219mil. in 2012 to €560mil. in 2020 and the forecasted value for 2030 is €1,05bil. (Standard Deviation +/- €192mil).

CONCLUSIONS: The declining trend in public health expenditure has forced the pharmaceutical industry to undertake a significant burden of pharmaceutical care financing through clawbacks and rebates. Health policy strategies under the Recovery and Resilience Plan are needed to achieve clawback reduction targets until 2025. Negotiations between the Government and the pharmaceutical industry could support the pharmaceutical sector’s long-term sustainability in Greece.