Spain's Pharmaceutical Expenditure in Doldrums as January, February Report 0.77%, 2.42% Y/Y Growth

The Spanish National Health System's (SNS) pharmaceutical expenditure has remained in the doldrums for the first two months of 2010, bringing a 0.77% year-on-year (y/y) growth and a 2.42% y/y expansion rate for January and February respectively, reports the Ministry of Health.

Statistics for January suggest lowering pharmaceutical consumption patterns in the country. This is brought by a slower rate of growth in total drug spending and particularly the number of prescriptions issued in the system. Growth rates from 2009 to 2010 also remained at lower levels than the 2008/09 period. Looking into inter-annual data, growth for prescriptions' average costs experienced a 0.27% decline, while the number of issued prescriptions and total expenditure expanded by 4.63% and 4.40% respectively.

Looking into February, y/y growth also remained on the lower side reaching 2.42%, 0.21% and 2.2% in total expenditure, average prescription costs and the volume of prescriptions issued in the system. Nevertheless, expansion rates for total drug spending and the number of prescriptions experienced a more significant jump through the 2009/10 period than 2008/09. Meanwhile, 2009/10 average prescription costs' growth rate remained much lower than in 2008/09 (1.00%), suggesting higher drug prices. Looking into inter-annual figures, data pointed to a 4.61%, -0.35% and 4.97% growth for total expenditure, average prescription costs and the number of issued prescriptions in the system.

Regional Expenditure

Looking into regional expenditure in January, Cataluña brought the highest drop in expenditure reaching -4.5% y/y; however it remained as the second region with the highest expenditure in the country. For this month, Galicia (-4.14%), Navarra (-1.04 %) and Cantabria (-0.72%) also managed to reduce their expenditure. Meanwhile, the Canaries experienced the highest hike with a 9% growth, followed by Ceuta (7.42%) and Castilla Leon (7.03%). For this month, Andalucia showed the highest expenditure reaching 168 million euro, while Melilla showed the lowest with 1.04 million euro.

For February, Melilla showed the highest drop in spending (-5.19%), followed by the Canaries (-4.66%) and C. Valenciana (-3.02%). Looking into major hikes for this month, Extremadura led the list with 8.21% growth, followed by Andalucia (5.74%) and Murcia (5.69%). Looking into expenditure, Andalucia (169 million euro) continued showing the highest expenditure rate, while Melilla the lowest (1.047 million euro).

Outlook and Implications

Looking into lowering spending tendencies, cost-containment measures continue to be directed towards price reduction (despite January's lower volume expenditure). This is highlighted in inter-annual figures as well as statistics for February, which follow the government's ongoing efforts (since 2004) to reduce pharmaceutical expenditure and deal with the health system's deficit, which accounts for 1.3 months of expenditure. Data for 2009 highly reflected these efforts, reaching a pharmaceutical expenditure of US$17.591 billion (4.4% y/y growth), with the average prescription price dropping by 0.45% and the number of issued prescriptions growing by 4.94% (see Spain: 27 January 2010: Spain's Pharmaceutical Expenditure Experiences 4.4% Y/Y Growth for 2009).

Looking into the following four years (until 2013) the government is expected to continue focusing on its current strategy to achieve its goals. The consolidation of the Sanitary Pact is expected to bring important changes within the country's national health system, and particularly in the efforts to reduce drug expenditure (see Spain: 23 March 2010: Government and CCAA Agree on Guidelines for "Health Pact" in Spain, Pharmaceutical Sector Fears Consequences). This scheme, in addition to a 3% y/y drop in the pharmaceutical expenditure budget for the regions, points to an intensification of cost-containment measures in the country (see Spain: 5 February 2010: Spanish Autonomous Communities' Pharmaceutical Budget Drops by 3% for 2010).

Main challenges will continue to focus upon finding a long-term sustainable approach to reduce the system's deficit while providing quality services and supporting the pharmaceutical industry. Pressure from the industry is expected to continue influencing in a slow but steady manner the implementation of cost-containment measures in Spain. The most recent victory was a series of modifications to the Sanitary Pact, which included changes to the decree 5/2000 (expanding the number of pharmacies that are exempt from paying tax), as well as an upsurge in prices for some old medications available on the market. While not massive, these achievements do bring a ray of hope for some participants in the market.