Navigating through the maze of pricing and affordability of branded pharmaceuticals in the midst of the financial crisis: a comparative study among five European recession countries, from a Cyprus…

Panagiotis Petrou, Michael A. Talias

Financial recession mandated the introduction of harsh austerity measures. Health, and particularly pharmaceuticals, constitute a significant part of public expenditure and as such they have been subject to significant budget reduction and stringent policies. As a consequence of these measures, an increasing percentage of patients resort to private sector for acquisition of their prescribed pharmaceuticals, due to exclusion of public health care beneficiary status, reduction of breadth of national formularies, delays in reimbursement and excessive waiting times. Affordability for pharmaceuticals in the private sector is of paramount importance since household disposable income plummets and more people are prone to impoverishment. This is critical for branded products, whose active substance and trademark are under patent protection, since no alternative options exist while their monopoly status imply that their prices are high. The impact on affordability regarding access of patient to necessary pharmaceutical care has not been documented in developed countries. A laspeyer index was constructed to compare prices of branded pharmaceuticals and assess affordability, by adjusting price index with Gross Domestic Product Purchase Power Parity per capita. Laspeyer index compares prices based on weights, which in our study are the corresponding sales of products in Cyprus. Moreover, we define the percentage of population that will face catastrophic pharmaceutical expenditure after acquisition of one product from eight major and common therapeutic categories. We used data from five European recession countries: Italy, Portugal, Spain, Greece and Cyprus, for 48 products which were selected based on sales. Cyprus displays the highest prices for pharmaceuticals. By adjusting for Gross Domestic Product Purchase Power Parity per capita, affordability is worst for Cyprus and Portugal. As more patients have to resort to private sector for provision of adequate and timely healthcare, health agencies must reassess affordability of medicines and minimise catastrophic expenditure impact. Health agencies should primarily try to enhance efficiency of the system and reduce waste, instead of resorting to blunt budget reduction, which can demonstrate unpredictable consequences in public health.