HE4 THE EFFECT OF PRICE CONTAINMENT ON THE TREND OF PHARMACEUTICAL EXPENDITURE FROM 1999 TO 2007 IN TAIWAN

Abstract

OBJECTIVES: To control the high pharmaceutical expenditure, the Bureau of National Health Insurance introduced the generic grouping method to reduce price variation among off-patent drugs since 2000. The purpose of this study was to examine the effect of the price adjustments on the trend of pharmaceutical expenditure. METHODS: We used BNHI monthly claim data from 1999 to 2007 and incorporated drug registry file, drug price file and 2009 WHO ATC/DDD file. To further analyze the effect of generic grouping, we classified the branded drug into three categories patented branded drug, off-patent branded drug with no competitive generic drug and off-patent branded drug with competitive drug. RESULTS: We found that from 1999 to 2007, the annual growth rate of pharmaceutical expenditure was 6.0%; outpatient 6.3% and inpatient 5.5%. During the study period, the sales of the patented branded drugs rose from 20.5% to 30.9% with the highest increasing rate. The sales of the off-patent branded with competitive generic drugs and generic without the BA/BE testing drugs fell from 21.1% to 18.6% and from 39.3% to 28.4%, respectively. The sales volume in terms of DDD also has the same pattern as the drugs sales. Regarding the impact of drug price adjustment on Hospital, we found the share of drug claim by medical centers rose from 35.5% to 41.3%; regional hospitals from 25.3% to 30.2%, however local hospitals and primary health care decreased their share. In terms of firms, the IRPMA group held the highest increasing rate on share and importers held the lowest. CONCLUSIONS: The generic grouping price adjustment policy has effectively reduced the off-patent branded drug expenditure. However, total drug expenditure didn't decrease due to the increased expenditure of the new drugs with high prices.