The impact of population ageing on future Danish drug expenditure

Abstract

Population ageing is likely to place an increasing burden on future health care budgets. Several studies, however, have demonstrated that the impact of ageing on future hospital expenditures will be overestimated when not accounting for proximity to death. This is because the greater health care expenditures among the elderly are not only due to age per se but due to the high “costs of dying”. Similar studies for pharmaceutical expenditures are scarce. The aim of this study was first to estimate the impact of the ageing Danish population on future total expenditures (public outlays as well as private co-payment) on out-of-hospital prescription drugs, holding everything but demographic changes constant. Second, it was to describe the association between age and drug expenditure among survivors compared to that of decedents, and to evaluate the extent to which drug expenditure is increasing with proximity to death in the last 2 years of life. Taking expenditure during the last year of life and the changes in mortality rates into account, future expenditure of prescription drugs was projected by multiplying the estimated mean annual drug expenditure according to age, gender and survival status by the predicted future number of Danes in each stratum, and subsequently, summing up across all strata. A generalized method was developed to account for expenditure several years prior to death. The projection was based on current drug utilisation from a representative prescription database covering the county of Funen, Denmark, and the most recent Danish population forecast for the period 2003–2030. The total population was projected to increase by 0.8% during the period 2003–2030, while the increase was 58% for people aged 75 years and over. The total drug expenditure was projected to increase by 16.9% during the same period when accounting for proximity to death, while it was 17.9% when this was not done. The projected growth in drug expenditure was not merely due to the drug consumption of the elderly. Moreover, the drug expenditure of elderly decedents was only increasing slightly with proximity to death. We conclude that the ageing of the population per se is likely to increase future expenditure on prescription drugs. This predicted increase, however, is small compared to recently observed increases in drug expenditures. The results of the study indicate that Danish policies aimed at limiting the increase in public drug expenditure should focus on rational pharmacotherapy and on the promotion of prescription of cost-effective pharmaceuticals—rather than targeting the drug use of the elderly or reducing the reimbursement generally.