Household Expenditures

on Health in the ICP 2011Session III: Global Core List survey materials for

regional PPP updates

Meeting of ICP Regional Coordinating Agencies

Washington, D.C., USA

May 28, 2015

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

ICP 2011

Results:

Note: “Health” in the ICP includes not only household expenditures,

but also expenditures in health goods and services incurred by NPISHs

and the general government on behalf of households.

Importance of health at the global level...

global nominal

health expenditures(% of World GDP)

.

...and at the regional level.

ICP 2011

Results:

Region

Regional nominal

health expenditures

(% of Regions’ GDP)

Ranking of “health”

(out of 12 analytical

categories)

Eurostat-OECD 10.1 2nd

Latin America 6.9 5th

Asia and the Pacific 5.2 3rd

Caribbean 5.0 4th

CIS 4.6 3rd

Africa 4.5 5th

Singletons 3.7 3rd

Western Asia3.0 5th

Item

Class/B. Heading

Group

Category

ICP2011 structure of household consumption of health

HEALTH

Medical Products, appliances & equipment

Pharma-ceuticals

43 items

Therapeutic Appliances

& Eq.

4 items

Other Medical Products

5 items

Out-patient Services

Medical

5 items

Dental

2 items

Parame-dical

5 items

Hospital Services

Hospital Services

Reference PPPs

Performance of health items in the ICP 2011

• Very high CVs for practically all items

• Medical products were harder to price

than services, mainly because of the

difficulty of pricing pharmaceuticals

Issues with pricing health goods and services

1. Complexity of Health Care Systems

Health care systems around the world have different arrangements of who pays

for the health care goods and services consumed by households. These

differences make it difficult to establish full market prices at times, as prices

faced by households may include subsides from the government or NPISHs.

2. Difficulty of Identification

Many dimensions come into play to define what we call a pharmaceutical

product. Different combinations of these parameters may exist between and

within countries, making it difficult to properly identify and compare products.

3. Difficulty of Representativity

Evidence to establish a common basket of representative health products at the

global level is scarce. If there’s no volume sales data, the nature of health markets

further complicates this task. Domestic laws and third-party agents may

sometimes affect consumption patterns of households even within a same

country. Pharmacists or domestic patent laws may influence what drug brands

people consume or on their preference of generics over branded drugs.

Health items pose difficulties...now what?

1. Complexity of Health Care Systems

We can’t change the underlying complexity of health

care systems. Although we can re-emphasize the

notion of full market prices in the SPDs.

2. Difficulty of Identification

We can improve the SPD’s for better and quicker

identification of products.

3. Difficulty of Representativity

We can align the item list to global consumption and

regional disease patterns.

Edits: Medical Services

Medical

Services

• More consistent item names and parameter structure and labels

• Split the original “Features” parameters (contained too much information)

• Removed “10 yr. experience” req. and rule of only pricing “after 2nd visit”

Item Name Consultation: general medical practitioner/primary care physician

Included in Eurostat List 11.06.21.1.01.aa

Number of units 1

Unit of measurement Service

Establishment Doctor's office, incl. those located in outpatient centers, polyclinics and general clinics

Establishment type Private

Timing of Service Normal working hours

Service Medical consultation

Service IncludesGeneral diagnosis and responding to common medical problems (e.g. common cold, flu,

etc.), medical history taking, and referral and prescription, as appropriate

Service by Professionally certified general medical practitioner/primary care physician

Duration 15-20 minutes

Price conceptFull Market Price (=Out-of-pocket payment by patient to provider + payment to

provider by Private Insurance/Non-profit institutions/Social Security)

10 yr. experience

req. removed

Reinforces that we

only want prices

from private service

providers

Reminder of the

price concept

we’re after

Edits: Dental and Paramedical Services

Dental

Services

• Reorganized content of the original and vague “Effect” parameter,

which incl. information on anesthesia used AND qualifications of dentist

• Removed “5 year experience” requirement for dentists and left the

parameter as “Professional certified dentist”

Para-

medical

Services

• Original “Blood test” service replaced with a more common type of

blood test (i.e. “hemogram” or complete blood test)

• For discussion (at the end): should we be pricing “Physiotherapist:

individual therapy after knee surgery”?

� “Establishment”, “Establishment Type” and “Price Concept” parameters were also

added to items under these two basic headings

� Consistency of item and parameter structuring and labeling was also improved

Hard to specify: pricing per session or per set of sessions? How

many sessions per set ? etc. Relevant in developing countries?

Edits: Therapeutical Appliances & Equipment

and Other Medical Products

Therapeutical

Appliances &

Equipment

• Split the “Features” parameter into “Display” (for the blood

pressure monitor), “Exclude, “Thickness”, “Lens Diameter”, etc.

• Added the WKB label to Contact lenses, walker and walking stick

• Replaced contact lenses to be of “[…] soft, monthly disposable,

WKB” type, instead of “soft contact lenses” that are “Permanent

(about 8 months)”

• For discussion (at the end): suggestion to add item to cover

lenses: “Single vision lenses, plastic 1.6 (ne), WKB”

Other Medical

Products

• Added the corresponding: “BL” and “WKB” labels

• Added the “Minimum” and “Maximum” quantity range

parameters for plaster strips, men’s condoms and absorbent

cotton wool

• For discussion (at the end): should we add home pregnancy test:

“Home pregnancy test, WKB” [using measurement in urine]

Valid for developing countries, or would this be

part of the services provided at a doctor’s visit?

Medical Products: Pharmaceutical Product List

• Contains 43 items; that is two-thirds of all health items

• Pharmaceuticals’ share of total health expenditure by country varies

from 2% to 96%. Median is 36%. It is quite high in BRIC economies, for

example: 74.4% in India, 62.2% in China, 38.2% in Brazil, etc.

• Stronger global economy and rapid expansion of access in emerging

markets, will drive higher levels of growth in drug spending over the

next five years compared to the past five years

• Most problematic health basic heading, faces issues in all 3 areas:

Complexity of NHS Identification Representativity

Pharmaceuticals: SPD Edits

Identification: improve SPD consistency while making pricing

manageable to non-pharma experts

Item label now includes

dosage form and strength

Instead of just “Ibuprofen” we have “Ibuprofen, 400 mg,

Tablet/Capsule, Generic’’

Re-labeled “Dosage” to

“Strength”

Dosage is a vague term. “Strength” is the amount of drug in a given

dosage form, e.g. strength of “500 mg” in a dosage form of “cap”.

Units of measurement

standardized

Instead of “tablet”, “capsule”, “powder for injection,” etc. we have

“tablet/capsule”, “gram in vial”, “powder sachets,” etc.

Dosage Form standardizedInstead of “suspension”, “injection”, etc. we have “powder sachets

for oral suspension”, “solution (or powder) for injection vial”, etc.

More Brand/Trade

name(s) included

[The same manufacturer may market the same product under

different names in different countries/regions]

Laboratory parameter

removed

[Its inclusion may create confusion as the manufacturer info on the

label may refer to a parent company, local company/subsidiary, etc.]

Add Common medical use

parameter

Included non-technical descriptions. Before: “Anthelmintic”; now:

“Anthelmintic: expel parasitic worms […]”

Corrected formatting

errors and impractical info

Manufacturer name under license type, “UI” instead of “IU”,

chemical therapeutical code instead of medicinal purpose, etc.

Pharmaceuticals: Global Trends (1/2)

Representativity: align ICP product list with global consumption patterns

and other global pharmaceutical lists.

Out of the 43 items in the ICP 2011 list only 12 are generic…

..yet global drug spending is mainly directed to

non-branded (mainly generic) pharmaceutical products

2013

spending

Pharmaceuticals: Global Trends (2/2)

Generics will drive drug spending growth in the next few years…

Pharmaceuticals: updated list

• HAI/WHO Surveys – a project to survey medicine prices

around the world– already do this

• Difficult to justify the inclusion of only the generic or

originator version of a drug

• Current list is biased toward the more easily comparable

branded products. Greater balance is needed between

comparability and representativity

Instead of deciding whether to only price

the “originator” (i.e. branded) or “generic”

version of a drug – why not price both?

Pharmaceuticals: suggestions for deletion

• 10 of the originally listed items were suggested for deletion.

• Almost all of the originally listed drugs had their missing generic/originator

version added to the list.

• After these edits, the remaining list would have 55 items – still less than the

Eurostat list (133 items)

Instead of deciding whether to just price

the “originator” (i.e. branded) or generic version

of a drug – why not price both?

Some common characteristics of items suggested for deletion:

1. Regional relevance. Drug is included in a WHO/HAI Regional or Individual

Country (rather than Global) list; OR is only found in the Eurostat list; OR is

only found in the ICP2011 list and not any other pharma list.

2. Injections. Are generally more appropriate for hospital settings, rather than

retail pharmacies: oxytocin (induce/enhance labour), streptokinase (blood clots).

3. Only some regions reported average prices for them in the ICP 2011 round.

Pharmaceuticals: exampleAdded Generic

Item Code 110611123 ---

Item NameLoratidine, 10 mg, Tablet/Capsule,

Originator

Loratidine, 10 mg, Tablet/Capsule,

Generic

Included in Eurostat List Only Generic 11.06.11.1.01.ig

Included in HAI List(s): Global,

Regional or Individual Country listIndividual Country Individual Country

Number of units 30 30

Unit of measurement Tablet/Capsule Tablet/Capsule

Active Substance(s) Loratidine Loratidine

Type of license Originator Generic

Strength 10 mg 10 mg

Dosage form Tablet/Capsule Tablet/Capsule

Brand/Trade name(s) Clarityne, Claritin

Target pack size 30 Tablets/Capsules 30 Tablets/Capsules

Price for 1 pack 1 pack

Common medical use Antihistamine Antihistamine

Price concept

Full Market Price

(=Out-of-pocket payment by patient to

provider + payment to provider by Private

Insurance/Non-Profit institutions/Social

Security)

Full Market Price

(=Out-of-pocket payment by patient to

provider + payment to provider by Private

Insurance/Non-Profit institutions/Social

Security)

Specify Pack size found and Product's brand-name Pack size found

Items for discussion and questions

Overall approachInclude the “Establishment”, “Establishment Type”

and “Price Concept” parameters ?

Medical services Remove 10/5 year professional experience req.?

Medical services Remove pricing after 2nd visit requirement ?

Paramedical Services Remove “Physiotherapist [�] after knee surgery” ?

Therapeutical

Appliances & Eq.Add “Single vision lenses, plastic 1.6 (ne), WKB” ?

Other Medical Products Add “Home pregnancy test, WKB” ?

Pharmaceuticals Price both generics and originator versions of drugs?

PharmaceuticalsRemove 22 items based, mainly, on the stated

common characteristics and criteria?

Pharmaceuticals Include the “Price for” and “Target pack size”

parameters?