Global Insight Perspective | |
Significance | Although the public pharmaceutical bill in 2007 was reduced by 6.8% year-on-year (y/y), the number of medical prescriptions was up by 4.3% y/y |
Implications | The Italian Drugs Agency (AIFA) is confident that maintaining control over drug expenditure can result in no further drug price cuts in the next three years. |
Outlook | The ageing of the population accounts for increased medicine consumption and past debts of the healthcare system will be the biggest challenges for the Italian government in 2008. |
The Italian National Health System (SSN) spent a total of 11.5 billion euro (US$18.1 billion) on pharmaceuticals in 2007, which is 6.8% lower compared to 2006, reports the Italian Drug Agency (AIFA). According to AIFA, pharmaceutical expenditure in 2007 came in at 15 million euro under the planned budget. "In this way, AIFA respects the mission of the Italian Parliament to assure a balance in medicine expenditure," notes the source. AIFA is confident that on "such bases" it is possible to guarantee stability on the market, without any drug price cuts, at the same time allowing access to new innovative drugs.
Italy's pharmacists' association, Federfarma, says that the number of medical prescriptions in 2007 totalled 524 million, equivalent to 8.93 prescriptions for every Italian citizen. However, the government managed to control pharmaceutical expenditure in 2007 and the median prescription value was reduced by 10.6%.
Selective drug price cuts in effect from 15 July 2006 and a more generalised 5% cut in drug prices in effect from 1 October 2006, together with the continuing impact of reference pricing all had an effect. Another factor to affect the public pharmaceutical bill was the expansion of regional drug-reimbursement lists to include drugs reducing gastric acid production (proton pump inhibitors) in the following regions: Puglia, Abruzzo, Sardinia, Liguria, Calabria, Campania, and Lazio. The reintroduction of the patient co-payment "ticket" in Abruzzo and Campania from 1 January 2007 and the "ticket remodelling" in Sicily from 4 April 2007 also showed their effects (see Italy: 20 September 2007: Italian Pharmaceutical Expenditure Decreases 8.9% Y/Y During January-July)
SSN Pharmaceutical Expenditure, 2006-2007 | ||
Month | % change, 2006 vs. 2005 | % change, 2007 vs. 2006 |
January | 14.40 | -6.7% |
February | 8.30 | -8.5 |
March | 14.60 | -10.0 |
April | 3.0 | -7.5 |
May | 14.80 | -12.1 |
June | 9.0 | -11.7 |
July | 5.90 | -5.4 |
August | 2.40 | -6.7 |
September | -0.10 | -9.4 |
October | -0.20 | 2.4 |
November | -8.9 | 0 |
December | -12.3 | -3.5 |
Source: Federfarma, 2008. | ||
AIFA director Nello Martini stated that he expects a sharp rise in the consumption of generic medicines in Italy during 2008, reports Agenzia Giornalistica Italia (AGI). Martini said that the generics share of the total pharmaceutical expenditure in 2007 was 18.7%.
Highest Bill for Cardiovascular Drugs
According to the latest Federfarma data on pharmaceutical expenditure by therapeutic group, Italy's pharmaceutical bill was highest for cardiovascular drugs, of which 13.9% was spent on anti-hypertensive drugs and 6.9% on statins. Gastrointestinal drugs took second place (see table below).
Pharmaceutical Expenditure by Therapeutic Group 2007 | |
Therapeutic group (Drugs) | % |
Cardiovascular | 37.6% |
Gastrointestinal | 14.0% |
Antibiotics | 10.3% |
Nervous System | 9.7% |
Respiratory | 7.8% |
Blood System | 4.8% |
Hormones (systemic) | 4.6% |
Antineoplastic | 4.1% |
Musculoskeletal | 4.0% |
Hormones (sexual) | 4.0% |
Other | 2.1% |
Source: Federfarma, 2008. | |
Outlook and Implications
The 2007 public pharmaceutical bill is a reflection of the cost-containment measures taken by the Italian government to curb rising healthcare costs, including drug price cuts and increased use of generic medicines. This trend is set to continue as the consumption of generic medicines is expected to reach 24-25% of the total pharmaceutical expenditure in 2008. As some Italians still regard generic medicines as inferior to branded drugs, an information campaign launched by AIFA in 2007 is set to promote the use of generic medicines (see Italy: 20 March 2008: AIFA Expects Rise in Generic Consumption in 2008).
The innovative pharmaceutical sector has been hit hard by continuing drug price cuts, but the government is keen to improve its standing by introducing incentives for R&D activities, making good on AIFA's promise that the savings made in pharmaceutical expenditure will ensure access to innovative drugs (see Italy: 20 December 2007: New Drug-Pricing, Tax Cuts, R&D Incentives Approved in Italy).
The biggest challenges facing the Italian government will be to contain pharmaceutical expenditure by addressing the rising pharmaceutical needs of an ageing population, reflected in an increasing number of medical prescriptions.