Medicines and the New Economic Environment: II. THE REFORM OF HEALTH CARE SYSTEMS: II.2. Reform of Health Care Services in Developing Countries, Role of the State and Essential Drugs: 3. HEALTH CARE REFORMS IN LATIN AMERICA: 3.2. Health care expenditure

Medicines and the New Economic Environment
(1998; 252 pages) [Spanish]

Índice de contenido

THE AUTHORS
PREFACE
INTRODUCTION
I. THE GLOBAL ECONOMIC ENVIRONMENT
	I.1. Opening Speech: Welfare State, Economic Policy and Health Services
		1. EVOLUTION AND PROBLEMS OF WELFARE PROGRAMS
		2. THE FUTURE OF THE WELFARE STATE: THE NEED FOR REFORM
		3. HEALTH CARE SERVICES: PROBLEMS AND REFORM LINES
		4. COMPETITION AND EFFICIENCY IN HEALTH CARE SYSTEMS
		5. COST OF HEALTH CARE TECHNOLOGY
		REFERENCES
	I.2. The Uruguay Round and Drugs
		1. INTRODUCTION
		2. PATENTS
			2.1. General principles
			2.2. Non-patentability: biotechnology-based drugs
			2.3. Non-discrimination clause
			2.4. Rights conferred: imports
			2.5. Rights conferred: protection of products through protection of the process
			2.6. Exceptions to exclusive rights
			2.7. Granting of compulsory licences
				2.7.1. Grounds for granting compulsory licences
				2.7.2. Conditions for granting compulsory licences
			2.8. Terms of protection
			2.9. Reversal of the burden of the proof
		3. UNDISCLOSED INFORMATION
		4. TRANSITIONAL PERIODS
			4.1. General grace period
			4.2. New patentable areas
			4.3. Protection of existing subject matter
			4.4. Prior compulsory licences and applications
			4.5. Pharmaceutical and agricultural chemical products
		5. ENFORCEMENT AND SETTLEMENT OF DISPUTES
		6. IMPLICATIONS FOR THE DEVELOPMENT, PRODUCTION AND MARKETING OF DRUGS
		7. CONCLUSIONS
		REFERENCES
	I.3. The Normalisation of the International Market for Pharmaceuticals: Future Impacts in Emerging Markets
		1. THE GLOBAL CONTEXT
		2. THE ESTABLISHMENT OF THE NORMS
			2.1. The drive towards normalisation
			2.2. The empirical framework
				2.2.1. The current structure of national markets
				2.2.2. Patents
				2.2.3. Prices
				2.2.4. The good manufacturing practices (GMP) and the quality of pharmaceuticals
				2.2.5. Generics
			2.3. The significance of the empirical information
		3. FUTURE TRENDS IN A NORMALISED WORLD
			3.1. Location of and control over production
				3.1.1. A synthesis of the structure of production
				3.1.2. What model is the international market heading for?
				3.1.3. Options for local producers in emerging countries
			3.2. International trade
		4. THE STEPS TO FOLLOW
		REFERENCES
II. THE REFORM OF HEALTH CARE SYSTEMS
	II. 1. Cost Containment and Health care Reforms: the Impact on Pharmaceuticals
		1. INTRODUCTION
		2. COST CONTAINMENT MEASURES
			2.1. Cost-sharing
			2.2. Expenditure ceilings
			2.3. Limiting doctors and hospital beds
			2.4. Alternatives to in-patient care
			2.5. Influencing the resource use authorised by doctors
			2.6. Pharmaceutical prices
			2.7. A profit control system for Europe?
			2.8. The effectiveness of cost containment measures: potential for further action
		3. LONG TERM SOLUTIONS
			3.1. Systematic approaches to establishing priorities
			3.2. Why are health care costs so explosive?
			3.3. Technology assessment and pharmacoeconomics
			3.4. Methodological problems in economic evaluation
				3.4.1. Cost benefit analysis
				3.4.2. Cost-utility analysis
				3.4.3. International cooperation
			3.5. Making health services more efficient
				3.5.1. Evaluation of the reforms
			3.6. Necessary health care and outcomes measurement
		4. CONCLUSIONS
		REFERENCES
	II.2. Reform of Health Care Services in Developing Countries, Role of the State and Essential Drugs
		1. INTRODUCTION
		2. POLITICAL, ECONOMIC AND SOCIAL BACKGROUND, AND ROLE OF THE STATE
			2.1. The economic background
			2.2. Poverty
			2.3. The role of the state
		3. HEALTH CARE REFORMS IN LATIN AMERICA
			3.1. Financing of the health care sector
			3.2. Health care expenditure
			3.3. Coverage
			3.4. Adjustment policies in the sector
			3.5. Three practical experiences
				3.5.1. The Chilean reform
				3.5.2. Costa Rica
				3.5.3. The Colombian reform
				3.5.4. 1993: A change in direction?
		4. ESSENTIAL DRUGS
			4.1. Production
			4.2. Regulations and registration
			4.3. Prescription
			4.4. Marketing
			4.5. Drugs and the public sector
			4.6. Training
			4.7. Conclusions
		REFERENCES
	II.3. Regulation, Policies and Essential Drugs
		1. TWO MAJOR TRENDS
			1.1. The role of the state
				1.1.1. The state and the civil society: regulation and participation. State control vs. Privatization?
			1.2. Internationalization
				1.2.1. From the «Nation State» to the «nationalities»
				1.2.2. Regional blocks: community areas
		2. DRUGS
			2.1. The process of innovation
				2.1.1. The end of the innovation boom
				2.1.2. Privatization of research
				2.1.3. Greater cost in research
			2.2. The selection process
				2.2.1. Prevailing health criteria
				2.2.2. Regulatory approval: selecting the useful and safe
				2.2.3. Essential drugs: the best
				2.2.4. And what about quality?
			2.3. The expansion of markets
				2.3.1. Economic and social rationale of internationalization
				2.3.2. Processes of regional and sub-regional integration
				2.3.3. Repercussions on the health care sector
				2.3.4. The challenge to surveillance and control. «Liberalization»?
			2.4. The creation of common areas: harmonization
				2.4.1. Harmonization of marketing authorization procedures
				2.4.2. Harmonization of pharmacological standards
				2.4.3. Harmonization of good manufacturing practices (GMPs)
				2.4.4. Intellectual property
			2.5. Ongoing processes
				2.5.1. World Health Organization
				2.5.2. The International Conference for Drug Regulatory Authorities
				2.5.3. The International Conference on the Harmonization of Technical Requirements for the approval of medicinal products for humans (ICH)
				2.5.4. The European Community
				2.5.5. The Andean group
				2.5.6. Mercosur
				2.5.7. Central America
		3. CONCLUSIONS
III. A CHANGING PHARMACEUTICAL INDUSTRY
	III.1. The New Structure of the Pharmaceutical Industry
		1. INTRODUCTION
		2. PHARMACEUTICAL RESEARCH AND DEVELOPMENT⁵
		3. THE REGULATION OF NEW DRUGS MARKETING
		4. RISING COSTS, DECLINING NEW PRODUCT INTRODUCTIONS
		5. DRUG TESTING AND INTERNATIONAL COMPETITIVENESS
		6. DRUG PRICES, PRICE CONTROLS, AND COMPETITION
		7. INDUSTRY RESTRUCTURING
		8. CONCLUSION
		REFERENCES
	III.2. Innovation and Regulation in the Pharmaceutical Market
		1. INTRODUCTION
		2. AN ERA OF EXPENSIVE DRUGS
			2.1. Expensive innovative drugs
			2.2. Innovation and the dynamic of drug markets
			2.3. The cost of innovation
		3. WHY ARE DRUGS EXPENSIVE?
			3.1. The R&D problem
			3.2. The nature of the market
		4. HOW TO REGULATE EXPENSIVE DRUGS?
			4.1. The ineffectiveness of direct price control
			4.2. Reinforced competition?
			4.3. Prescription control and pharmaco-economic assessment
		REFERENCES
	III.3. Change and Growth in Generic Markets in Developed and Developing Countries
		1. INTRODUCTION
		2. THE RESEARCH-BASED INDUSTRY FACES THE GENERICS
		3. SOME FIGURES FOR WESTERN COUNTRIES
		4. SOME FIGURES FOR NEW AND DEVELOPING COUNTRIES
		5. TRENDS IN GENERIC PRODUCTION
		6. THE PROTECTION OF RESEARCH (SCHERER, 1993)
		7. GENERICS BY THE YEAR 2000
		REFERENCES
IV. SYNTHESIS AND FORECASTS
	Medicines and the New Economic Environment: Summary and Forecasts (*)
		1. THE ROLE OF THE STATE AND THE REFORM OF HEALTH CARE SYSTEMS
			1.1. Problems regarding the welfare state in Western Europe and changes in Health Care Systems
			1.2. The development of health systems in Latin America and the ways of reform
			1.3. Conclusions on perspectives for change in health systems
			1.4. Cooperation from banks of development as new participants in the field of health
		2. CHANGES IN THE INTERNATIONAL SCENE
			2.1. Globalization
			2.2. Regional integration
		3. CHANGES IN THE STRUCTURE OF THE PHARMACEUTICAL INDUSTRY
		4. CALENDAR FOR FUTURE RESEARCH AND COOPERATION
BIBLIOTECA CIVITAS ECONOMÍA Y EMPRESA
BACK COVER

3.2. Health care expenditure

During the 80s, public health expenditure declined. Since comparative global studies on health expenditure in Latin America have become available only recently, estimations of the scope and effects of this decline must be done indirectly.

Average health care expenditure by governments of the region fell from 0.8 per cent to 0.7 per cent of GDP between 1980 and 1990. In US$ at 1988 prices, this meant a drop from US$18.8 to US$14.6. In the same period, total expenditure of social security systems decreased from 4.8 per cent to 4.1 per cent of GDP. Simultaneously, the proportion of expenditure dedicated to medical care decreased from 27.6 per cent to 25.6 per cent (OPS, 1994d). This was partly related to the outburst of a cholera epidemic in the region in 1991. In 1992, some 160 million people lacked permanent access to health services.

The analysis by components of expenditure in the above study includes 18 countries which make up for more than 95 per cent of the population and the GDP of Latin America and the Caribbean. Their estimates should be considered as conservative, since they do not include certain components of public expenditure (health benefits for the Army and some public companies) or private disbursement (individual or company subscription of private insurance, contributions to prepayment systems, expenditure of national or international NGOs, etc.).

In 1990, the countries of the region spent an average of 5.7 per cent of their GDP on the purchase of health related goods and services. This means an expense of approximately US$122 per capita. The ratio between the average (US$300) of countries who spent most (Antigua and Barbuda, Argentina, Bahamas, Barbados, the Cayman Islands and Monserrat), and the average of the group that spent least (Bolivia, El Salvador, Guatemala, Guyana, Haiti, Honduras, Nicaragua, Paraguay and the Dominican Republic) was six to one. The share of GDP spent by three countries (Argentina, Costa Rica and Panama) was greater than the average for the OECD countries that year (7.8 per cent).

Private spending accounted for 57 per cent of health expenditure (3.2 per cent of GDP) while public expenditure was 43 per cent of (2.5 per cent of GDP). The public-private combination ranged from a minority of countries where private expenditure was only one third of the total (Costa Rica and some English-speaking Caribbean countries) to countries where it was more than three quarters (in general, countries with low or medium incomes and more populated: Bolivia, El Salvador, Mexico, Peru, the Dominican Republic and Venezuela). Private spending that year (1990) in developed countries (excluding the USA) did not exceed, on average, 25 per cent of total expenditure.

More than 50 per cent of public expenditure in health corresponds to social security entities (24 per cent of total expenditure and 1.1 per cent of GDP); 28 per cent to central governments (12.2 per cent of total expenditure and less than 1 per cent of the GDP) and 6-7 per cent to regional or local governments. In other words, for each dollar spent by the central government, households spent at least US$4.6 of their own pockets.

Data from the same study indicate that 35 per cent of private spending was dedicated to payment of doctors' visits, 34 per cent to drugs purchase, 11 per cent to hospitalization and diagnoses and the remaining 20 per cent to payment of protheses, laboratory services, and others (with large variations between countries in every case).

Another recent study (GOVINDARAJ, MURRAY and CHELLERAJ, 1994, pp. 13-14) confirmed most of the aforementioned data, estimating total health expenditure in Latin America and the Caribbean in 1990 at 6.3 per cent of GDP. This percentage is significantly higher than that of China (3.5 per cent), the Middle East (3.6 per cent), Africa below the Sahara (4.2 per cent) and Asia (4.5 per cent). Moreover, while overall private spending accounted for 40 per cent of the total, in Latin America this figure was 51 per cent.

The preceding information is very relevant because the argument of inefficiency and inequality of health expenditure coined (and to a great extent still prevailing) over the last decade, through focusing on the public component of expenditure, ignored the problems of inequality and inefficiency of private spending (which is the largest portion in the region), thus contributing to, indirectly, increase them.