Abstract
Background: The prioritization of public funds in an equitable and ethically sound manner along with efficient budget allocation are key challenges for governments and budget holders. Following the introduction of generics/biosimilars, the potential total budget made available for reallocation resulting from the loss of exclusivity (LOE) in a given market has not been estimated.Objectives: This study investigated the impact of generic/biosimilar entry on drug budget in 4 countries.Methods: Pharmaceutical sales data, drug costs and LOE dates were modeled and forecast using an analytical framework (Affordability by ReallocaTing Funds model [ART]) to estimate future incremental budget availability using scenario analyses in Greece (GR), the Netherlands (NL), Norway (NO) and Sweden (SW).Results: During 2020-2022, 166 (GR), 222 (NL), 145 (NO) and 93 (SW) products facing LOE were identified. This equated to release of an estimated cumulative budget during 2020-2024 of €218 million (GR), €1319 million (NL), €340 million (NO) and €876 million (SW). The estimated average budget released per year during 2020-2024 was 1.8% (GR), 4.6% (NL), 3.4% (NO) and 3.9% (SW) of each country’s total annual drug budget.Discussion: These analyses showed that LOE for pharmaceutical products between 2020 and 2022 can result in significant increase in budget availability. LOE in the retail channel was the main driver of budget availability in GR and SW, compared to LOE in the hospital channel in the NL and NO.Conclusion: Estimation of future release of budget capacity using the Affordability by ReallocaTing Funds model supports discussion on resource allocation to fund innovation and may help inform policy changes.
Highlights
The prioritization of public funds in an equitable and ethically sound manner along with efficient budget allocation are key challenges for governments and budget holders
The objective of the Affordability by ReallocaTing funds (ART) model was to assess products expected to lose exclusivity within a specific time interval, with loss of exclusivity (LOE) dates estimated based on assessment of the protection status of products within a country, including country-specific patents, patent extensions, Supplementary Protection Certificates/Certificate of Pharmaceutical Products, data exclusivity, pediatric exclusivity, and ongoing litigation
The combined annual sales of the products identified as losing exclusivity from January 2020 to December 2022 was €260 million in 2019, representing 10.8% of the total drug budget (Figure 1)
Summary
The prioritization of public funds in an equitable and ethically sound manner along with efficient budget allocation are key challenges for governments and budget holders. Prioritization of investments with public funds requires both equity and ethically sound decisions, and efficient budget allocation remains a challenge for governments and budget holders. The introduction of innovative medicines is considered to have put pressure on healthcare budgets,[5] drug budgets have remained largely stable in recent years.[6,7]. This is despite the increasing healthcare needs of aging populations with chronic conditions and comorbidities driving healthcare costs (as a result of better health care) and the increasing prevalence of chronic diseases and opportunities to treat previously fatal conditions.[1,3,4,8]. The introduction of innovative medicines is considered to have put pressure on healthcare budgets,[5] drug budgets have remained largely stable in recent years.[6,7] This is despite the increasing healthcare needs of aging populations with chronic conditions and comorbidities driving healthcare costs (as a result of better health care) and the increasing prevalence of chronic diseases and opportunities to treat previously fatal conditions.[1,3,4,8] Reports have shown that slight increases in pharmaceutical spending have been primarily driven by increases in volume rather than price.[9,10] the general trend is
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