“Pharmaceutical expenditure accounts for a variable share of current health expenditures across OECD and EU countries, ranging from 7% (reported by Denmark of Norway) to 41% (in Bulgaria) in 2016.1 The advent of the direct acting anti-virals (DAAs) for hepatitis C, the increasing use of high cost biologics, and the escalating launch prices of oncology medicines in particular, have raised concerns that pharmaceutical expenditure growth will become increasingly difficult to predict and may become challenging to sustain.”
Source: OECD (2019). Improving Forecasting of Pharmaceutical Spending – Insights from 23 OECD and EU Countries. Analytical Report.
“Spending for retail pharmaceuticals averaged USD 564 per person across OECD countries in 2017, adjusted for differences in purchasing power (Figure 10.2). Cross-country differences are marked, with spending more than double the average in the United States, followed by Switzerland and Japan. Per capita spending was lowest in Mexico and Denmark, at around half or less of the OECD average. Cross-country differences in spending reflect differences in distribution and dispensing patterns, the uptake of both generic and novel medicines, as well as pricing and procurement policies.
“Most spending on retail pharmaceuticals is for prescription medicines (75%), with the remainder spent on over-the-counter (OTC) medicines (19%) and medical non-durables (5%). The costs of OTC medicines are typically borne by patients, though occasionally public payers or mandatory insurance schemes may contribute. Depending on country-specific legislation, some OTC medicines can be sold outside pharmacies, for example, in supermarkets, other retail stores or via the internet. Expenditure on OTC medicines in Poland is almost equal to that on prescription medicines, and accounted for almost a third of the total in Spain, Latvia and Australia.”
Source: OECD (2019), Health at a Glance 2019: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/4dd50c09-en.
“Per capita retail pharmaceutical expenditures, adjusted for purchasing power, among countries included in this study ranged from 324.6 (Denmark) to 741.1 US$ PPP (Germany) per capita in 2014 (see Figure 2.1). Ireland, France, Greece and Belgium were at the upper end of this spectrum below Germany, while the Netherlands, Portugal and Poland were at the lower end above Denmark. From a longitudinal perspective, while some countries show6 a relatively stable upwards trend (for example, Austria, Germany and Poland), in others per capita expenditures on retail medicines have been decreasing (for example, Portugal as of 2009, and the Netherlands as of 2011). Following a stable upwards trend until 2009, available data for Greece during the financial crisis years show a dramatic decline in per capita expenditure after 2011.
“Varying per capita expenditures for pharmaceuticals among countries can be attributed to different consumption rates (for example, for different indication areas, see section on consumption below) – the so-called volume component – differences in the utilization of new, mostly high-priced medicines and established, mostly low-priced medicines – the so-called structural component – and finally different prices per pharmaceutical – the so-called price component.”
Source: Panteli D, Arickx F, Cleemput I, Dedet G, Eckhardt H, Fogarty E, Gerkens S, Henschke C, Hislop J, Jommi C, Kaitelidou D, Kawalec P, Keskimäki I, Kroneman M, Lopez Bastida J, Pita Barros P, Ramsberg J, Schneider P, Spillane S, Vogler S, Vuorenkoski L, Wallach Kildemoes H, Wouters O, Busse R. Pharmaceutical regulation in 15 European countries: Review. Health Systems in Transition, 2016; 18(5):1–118.
“Across OECD countries, funding from governments and compulsory insurance schemes played the largest role in purchasing pharmaceuticals (Figure 10.1). On average, these schemes covered 58% of spending on retail pharmaceuticals. Most of the remainder is financed from household out-of-pocket payments; only 3% of spending is covered by voluntary insurance. In Germany and France, government and compulsory schemes cover 80% or more of pharmaceutical costs. By contrast, in Latvia, Poland and Lithuania, almost two-thirds of pharmaceutical spending was through out-of-pocket payments.”
Source: OECD (2019), Health at a Glance 2019: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/4dd50c09-en.
“Across the 79 drugs in our sample, the average list price per dose was $152.92, ranging from $0.086 to $16,597.7 Annual pharmaceutical spending per capita varied from $318 in Denmark to $1,220 in the United States. Average annual per capita spending on pharmaceuticals was $675.25 across the 12 countries, $625.73 excluding the U.S. U.S. drug prices are on average outliers relative to all comparator countries. Most countries had average drug prices around 24 to 30 percent of those in the United States. The greatest disparity was with Japan, where the average drug price was only 15 percent that of the U.S., meaning that the U.S. on average spends seven times what Japan pays for the same drugs. Denmark represented the closest average price, where average drug prices were 39.1 percent of the average U.S. drug price.”
Source: “A Painful Pill To Swallow: US vs International Prescription Drug Prices,” US House Ways and Means Committee, Sept. 2019.
“Pharmaceutical expenditure can also be viewed in relation to the total expenditure on health and expressed as a percentage. Among compared countries, retail pharmaceutical expenditure as a share of current1 expenditure on health in 2014 amounted to 14.5% on average with a median of 14.1% and a range of 6.7% (in Denmark) to 28.4% (in Greece). Overall, retail pharmaceutical expenditure as a share of current expenditure on health shows relative stability both in directionality and positioning among compared countries (see Fig. 2.2) and has declined on average since 2004 (average excluding the Netherlands and the United Kingdom 18.1%, median 17.0%). A higher ranking here compared with the per capita observations in Fig. 2.1 (for example, Poland, Portugal) could mean that either pharmaceutical consumption is above average compared to other health services or that price levels are higher compared to other areas of care, which are mainly shaped by personnel costs. Conversely, a substantially lower rank (for example, Austria, Sweden) may indicate lower pharmaceutical consumption or prices.”
Source: Panteli D, Arickx F, Cleemput I, Dedet G, Eckhardt H, Fogarty E, Gerkens S, Henschke C, Hislop J, Jommi C, Kaitelidou D, Kawalec P, Keskimäki I, Kroneman M, Lopez Bastida J, Pita Barros P, Ramsberg J, Schneider P, Spillane S, Vogler S, Vuorenkoski L, Wallach Kildemoes H, Wouters O, Busse R. Pharmaceutical regulation in 15 European countries: Review. Health Systems in Transition, 2016; 18(5):1–118.
“Finally, another approach towards assessing and contextualizing pharmaceutical expenditure is looking at its share in gross domestic product. In 2014 both the average and the median shares of retail pharmaceutical expenditure among compared countries lay at 1.4% – compared to 1.5% and 1.6% respectively in 2004. Following outlier Greece (with 2.3%), France, Spain and Germany build the upper cluster in the sample with values between 1.60% and 1.67%, while Denmark (0.71%) and the Netherlands (0.83%) are at the lowest end of the spectrum. Varying degrees of contraction in the GDP of compared countries following the financial crisis should be taken into account when interpreting these figures.
“The relative stability of expenditure as a percentage of GDP in contrast to a falling percentage of current health expenditure can be explained by the fact that in many countries within the sample expenditure on other services and goods has increased at a speed above GDP growth, while expenditure on “retail” pharmaceuticals has grown in line with GDP. Another contributing factor may be the availability of generic products following patent expiry of originator medicines.
“Pharmaceutical expenditure as a share of GDP (shown in Fig. 2.3) emerges as a direct multiplication of current health expenditure as a share of GDP (Fig. 2.4) and the share of current health expenditure spent on “retail” pharmaceuticals (Fig. 2.2). In 2014 current expenditure on health amounted to an average of 9.0% of GDP in OECD countries and 9.8% among studied countries (median 10.1%), up from 8.4% and 8.3% respectively in 2004. Sweden led the sample in 2014 with 11.2%, followed by France and Germany with 11.1% and 11.0%, respectively. For the majority of countries in the sample a clear upwards trend can be discerned until 2009, with levelling off or declining tendencies after that. As of 2010, current expenditure as a share of GDP (including both public and private spending) has increased again for a number of countries, albeit seemingly at a slower pace.”
Source: Panteli D, Arickx F, Cleemput I, Dedet G, Eckhardt H, Fogarty E, Gerkens S, Henschke C, Hislop J, Jommi C, Kaitelidou D, Kawalec P, Keskimäki I, Kroneman M, Lopez Bastida J, Pita Barros P, Ramsberg J, Schneider P, Spillane S, Vogler S, Vuorenkoski L, Wallach Kildemoes H, Wouters O, Busse R. Pharmaceutical regulation in 15 European countries: Review. Health Systems in Transition, 2016; 18(5):1–118.
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Page last updated April 15, 2022 by Doug McVay, Editor.
