The impact of repeated cost containment policies on pharmaceutical expenditure: experience in Spain

Iván Moreno-Torres, Jaume Puig-Junoy, Josep M. Raya

The growth in expenditure on the financing of pharmaceuticals is a factor that accounts for a large part of the increase in public health spending in most developed countries. In an attempt to kerb this growth, many health authorities, particularly in Europe, have introduced numerous regulatory measures that have affected the market, especially on the supply side. These measures include the system of reference pricing, the reduction of wholesale distributors' and retailers' markups and compulsory reductions of ex-factory prices. We assess the impact of these cost containment measures on expenditure per capita, prescriptions per capita and the average price of pharmaceuticals financed by the public sector in Catalonia (Spain), from 1995 to 2006. We apply an autoregressive integrated moving average (ARIMA) time series model using dummy variables to represent the various cost containment measures implemented. Twelve of the 16 interventions analysed that were intended to contain the overall pharmaceutical expenditure were not effective in reducing it even in the short term, and the four that were effective were not so in the long term, thus amounting to a moderate annual saving.