Martin Kenneally

Pharmaceutical Cost-Containment Policies and Sustainability: Recent Irish Experience

OBJECTIVE Our objective is to review and assess the main pharmaceutical cost-containment policies used in Ireland in recent years, and to highlight how a policy that improved fiscal sustainability but worsened economic sustainability could have improved both if an option-based approach was implemented. METHOD The main public pharmaceutical cost-containment policy measures including reducing the ex-factory price of drugs, pharmacy dispensing fees and community drug scheme coverage, and increasing patient copayments are outlined along with the resulting savings. We quantify the cost implications of a new policy that restricts the entitlement to free prescription drugs of persons older than 70 years and propose an alternative option-based policy that reduces the total cost to both the state and the patient. RESULTS This set of policy measures reduced public spending on community drugs by an estimated €380m in 2011. The policy restricting free prescription drugs for persons older than 70 years, though effective in reducing public cost, increased the total cost of the drugs supplied. The policy-induced cost increase stems from a fees anomaly between the two main community drugs schemes which is circumvented by our alternative option-based policy. CONCLUSIONS Our findings highlight the need for policymakers, even when absorbed with reducing cost, to design cost-containment policies that are both fiscally and economically sustainable.

The implications of regional and national demographic projections for future GMS costs in Ireland through to 2026

BackgroundAs the health services in Ireland have become more resource-constrained, pressure has increased to reduce public spending on community drug schemes such as General Medical Services (GMS) drug prescribing and to understand current and future trends in prescribing. The GMS scheme covers approximately 37% of the Irish population in 2011 and entitles them, inter alia, to free prescription drugs and appliances. This paper projects the effects of future changes in population, coverage, claims rates and average claims cost on GMS costs in Ireland.MethodsData on GMS coverage, claims rates and average cost per claim are drawn from the Primary Care Reimbursement Service (PCRS) and combined with Central Statistics Office (CSO) (Regional and National Population Projections through to 2026). A Monte Carlo Model is used to simulate the effects of demographic change (by region, age, gender, coverage, claims rates and average claims cost) will have on GMS prescribing costs in 2016, 2021 and 2026 under different scenarios.ResultsThe Population of Ireland is projected to grow by 32% between 2007 and 2026 and by 96% for the over 70s. The Eastern region is estimated to grow by 3% over the lifetime of the projections at the expense of most other regions. The Monte Carlo simulations project that females will be a bigger driver of GMS costs than males. Midlands region will be the most expensive of the eight old health board regions. Those aged 70 and over and children under 11 will be significant drivers of GMS costs with the impending demographic changes. Overall GMS medicines costs are projected to rise to €1.9bn by 2026.ConclusionsIreland’s population will experience rapid growth over the next decade. Population growth coupled with an aging population will result in an increase in coverage rates, thus the projected increase in overall prescribing costs. Our projections and simulations map the likely evolution of GMS cost, given existing policies and demographic trends. These costs can be contained by government policy initiatives.

Satellite accounts for the tourism industry: structure, representation and estimates for Ireland

This article constructs tourism satellite accounts (TSAs) for Ireland and provides a simple matrix representation of how TSAs estimate value added, domestic product and employment. The authors calculate how much tourism has contributed, directly and in total, to Irish value added, domestic product and employment. They find that TSA-measured domestic tourism consumption in Ireland is over five times the traditional official estimate and that tourism indirectly contributes around a further 50% of its direct contribution to Irish GDP. As such, tourism is found to be Irelands second largest ‘industry’ in terms of gross value added and that it is Irelands largest employer. The analysis shows why tourism policies based on traditional estimates of the tourism industry are likely to be misguided.

Why Do Drug Prescribing Rates Differ Across Irish Regions

In Ireland 68.3 m drug items were prescribed in 2010, a national average prescribing rate (APR) of 14.9 items per person. Regional APRs ranged from 13.2 items in the East to 17.1 items in the South-East region. We construct a model of regional prescribing rates in Ireland that embeds the effects of the national prescribing rates under each of Ireland’s three main community drug schemes, the regional coverage rates of those schemes and each region’s health status. Drawing on the CPS Composite Health Index to measure regional health status and the Primary Care Reimbursement Service database for all other variable, we estimate the model by Ordinary Least Squares (OLS). We find that variations in regional prescribing rates were mainly due to the different regional coverage rates of Ireland’s community drug schemes, especially its GMS (General Medical Services) community drug scheme and, to a lesser extent, to differences in each region’s health status. We simulate the estimated model and find that a percentage point reduction in each region’s GMS coverage rate would reduce the number of items prescribed nationally twice as much as a percentage point gain in each region’s health status. We find that regional prescribing rates respond most to changes in national prescribing rates in low-income regions that have high GMS coverage rates and poor health status. At the height of Ireland’s public debt crisis in 2010, government policy pressured GMS national prescribing rates down by around 2% in an effort to contain public drug costs. That reduced regional prescribing rates most in low-income regions that had high GMS coverage rates and poor health status.