OHE: drugs spend to rise
pharmafile | April 16, 2013 | News story | Medical Communications, Sales and Marketing | ABPI, OHE
UK medicines expenditure is set to grow between 3.1% and 4.1% by 2015, according to a study which the researchers say uses a new, more accurate methodology.
The Office of Health Economics (OHE), which is funded by the ABPI, says the branded
segment of the pharma market will see compound annual growth rates of 0.5% – 1.8% over the same period.
OHE believes using historical data, such as extrapolating past trends, when it comes to forecasting spending on medicines is insufficient because this fails “to account for changes in the rate and mix of new medicines becoming available and in the scope for windfall savings when some medicines lose their patent protection”.
‘Projecting Expenditure in Medicines on the NHS’ instead contains predictions based on what OHE calls a ‘bottom-up’ or ‘product-level’ approach making it possible, it says, to base forecasts on what is most likely to change in the medicines market – for example the rise of new products and the debut of new generics and biosimilars.
Projections of the impact of loss of market exclusivity by existing medicines and the rate of uptake of newly-launched drugs have been drawn from experience to date in the relevant market.
OHE spoke to “a number of experts, primarily from pharmaceutical companies”, to get a handle on illnesses which it says account for about 80% of spending.
“This also allowed us to understand whether and how well historic trends approximate future trends,” the authors point out.
The issue of medicines use is a crucial one for pharma: the Department of Health’s own annual report and accounts for 2011-2012 showed that the prescribing costs of Primary Care Trusts fell 0.4% to £8.2 billion year-on-year, despite the volume of drugs prescribed increasing by 3.9 per cent.
The value of its approach, the OHE suggests, is that it should give politicians and NHS commissioners more detail on which therapy areas may require the most funds.
“Such detail offers an opportunity, in theory at least, for policy-makers to make better-
informed decisions – both about allocating resources and about policies that can influence the factors that, in turn, determine medicines expenditures,” the report concludes.
Adam Hill
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