Investigation the determinants of pharmaceutical expenditure share of GDP in Iran and selected OECD countries

Azin Kadkhodamanesh,Mohammad Hadidi,Vida Varahrami,Leila Zarei,Nazila Yousefi,Farzad Peiravian

doi:10.1186/s40545-021-00371-2

Abstract

AimThis study estimated the GDP share of pharmaceuticals in Iran based on the drivers of pharmaceutical expenditure and compared it with that of 31 members of the Organisation for Economic Cooperation and Development (OECD).Subject and methodsThe factors contributing to pharmaceutical expenditure were identified through literature review and studied by 8 experts to classify the factors. Then, using the panel data method, a model was built to estimate the GDP share of pharmaceutical expenditure based on the extracted factors of the selected countries in Iran’s model. To explain the observed differences, several regression analyses were performed based on cross-sectional data. The analyses were performed using EVIEWS software, version 10.ResultsThe explanatory variables for the selected countries in the panel model (R2 = 0.98) were specified. Government health expenditure (β = 0.1432), the share of generic drugs (β = − 0.0143), gross domestic product (GDP) per capita (β = − 0.0058) and the rate of disability-adjusted life-years (DALY) (β = 0.0028) contributed most to pharmaceutical expenditure. In comparison, in the Iranian estimation model (R2 = 0.84), government health expenditure (β = 0.0536) and the share of generic drugs (β = 0.0369) had a significant impact on pharmaceutical expenditure. In the estimation model with more estimators for Iran (R2 = 0.99), government health expenditure (β = 0.1694), disease prevalence (β = 0.0537), the share of generic drugs (β = 0.0102), the DALY rate (β = 0.0039), GDP per capita (β = − 0.0033), and the drug price index (β = 0.0007) contribute most to pharmaceutical expenditure.ConclusionIn the models of the study, factors related to the structure of the healthcare system and the pharmaceutical system contributed most to pharmaceutical expenditure as a share of GDP. Moreover, disease profiles show its predictive role in the second model for Iran.

Highlights

In recent decades, the cost of health care in general and pharmaceutical care in particular has been increasing due to the tremendous growth rate in the utilization of health care services, technological advancement, population growth, lifestyle changes resulting from industrialization, and the emergence of new diseases [14, 15]
Estimation of the gross domestic product (GDP) share of pharmaceutical expenditure in the Organisation for Economic Cooperation and Development (OECD) countries using the panel data method The Levin–Lin-Chu (LLC) test was used for the existence of a unit root
The results of the F-Limer test showed that the p-value is less than the significance level of 0.05; the panel data model was used to estimate the proportion of the pharmaceutical expenditure of the OECD countries

Summary

Introduction

The cost of health care in general and pharmaceutical care in particular has been increasing due to the tremendous growth rate in the utilization of health care services, technological advancement, population growth, lifestyle changes resulting from industrialization, and the emergence of new diseases [14, 15]. This is an inevitable and logical process, with previous studies Percent. A review study conducted in 2014 showed that the most important factor that governments consider in controlling drug expenditure is factors related to price, utilization, therapeutic choice, demand and health care system [16]

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