Top five European countries by pharmaceutical spending per capita
With pricing never far from the news and yet more news stories emerging around the inflated prices of certain generics doing the rounds, we decided to take a look at which countries spend the most on pharmaceuticals within the EU – based upon OECD data from 2014.
€693 – Germany (1.6% of GDP)
Germany lies at the top of the list but has actually seen its expenditure of pharmaceutical medicines drop over the last few years. Germany was notorious, prior to 2011, for having huge prices on pharmaceutical drugs – leaving them paying 26% higher prices, on average, compared with prices across the EU. In 2011, in an attempt to curb these prices, Germany introduced AMNOG (the Act to Reorganize Pharmaceuticals Market in the Statutory Health Insurance System or Arzneimittelmarktneuordnungsgesetz). The Act allowed Germany to better negotiate prices based upon the clinical benefits whilst ensuring transparency along the way to market approval.
€657 – Ireland (1.42% of GDP)
Ireland has had a rough economic ride post-financial crash but has recovered well with action to encourage firms to set up their bases in Ireland. It’s made Ireland particularly attractive to pharmaceutical companies, with the mooted Pfizer-Allergan merger nearly happening due to the tax breaks that would result from headquartering in Ireland. Having a base for biotech and pharmaceutical firms hasn’t translated to cheaper prices, however. Part of the reason is that the generic market is comparatively weaker than in other areas, with a market share of 29% compared to an average of 48%.
€615 – France (1.67% of GDP)
France has the second largest population in Europe, only behind Germany, and has a social protection system that covers most healthcare costs. In fact, France has often been viewed as having one of the most successful healthcare systems in the world. With that said, the cost of spending upon pharmaceuticals is clearly one of the highest in Europe. France has reputation as being particularly consumptive when it comes to medication, with members of the public expecting to receive medication as part of any treatment or visit to the doctor. As this reputation has grown over the past 35 years, there have been subsequent attempts to curb this culture that has seen consumption fall.
€589 – Greece (2.35% of GDP)
Greece’s financial woes need no explanation, since the global financial crisis and subsequent bailouts, Greece has been hard-pushed to claw any savings it can from savings. From 2010 onwards, Greece has been struggling to reduce its bill on pharmaceutical products. It has been given an aim to reduce the expenditure to below 1% of GDP, a huge ask from the 2014 figure of 2.35%. It has attempted to find savings by using external reference pricing, commonly used within the EU to set pricing, to peg its prices to lowest prices available from within the EU.
€583 – Belgium (1.44% of GDP)
Belgium has maintained its spending upon pharmaceutical medicine, despite the financial crisis that led many countries to cut into their healthcare expenditure. The reverse to this is that Belgium encourages R&D from within the country, with five out of 100 essential drugs invented in Belgium whilst it also boasts the highest number of patients per capita in clinical trials. It also holds the position of the second highest exporter of pharmaceutical in the world. It also employs many people from the pharmaceutical industry – pharmaceutical drugs then run as the lifeblood through the Belgian economy, somewhat literally given the high expenditure per capita of pharmaceuticals.
For those wondering where the UK places, it comes in at 13th on the list - with expenditure of £386 per capita at 1.21% of GDP.