High cost of medications in Colombia

A general overview of the issue focusing in the antineoplastic and

immunomodulatory therapies.

Pharm Dr. B. Sc. Alexander Bermudez Rubashkyn

MBA Health Care Administration student at TMU.

Lack of resources to provide delivery services in health.

Too many causes have been determined, but without any doubt the most relevant is the high cost of the medications.

The part of the drugs which contributes more in the issue in terms of total percentage in the expenditure are the High Cost Drugs (HCD).

Introduction

Catastrophic Illness and High Cost Medications

A Catastrophic Illness is a severe illness requiring prolonged hospitalization with a high risk of recovery and high probability of death, (coma, cancer, leukemia, heart attack or stroke).

A High Cost Drug is the medication used to treat the catastrophic illness, which represents a high expenditure as well, (chemotherapy, immunomodulation therapy).

Introduction

Antineoplastic and Immunomodulatory Therapies

Introduction

Antineoplastic drugs

• Monoclonal antibodies• Pyrimidine Analogues• Taxanes• Protein-Kinase

inhibitors

Immunosuppressant

• Anti TNF (Tumoral Necrosis Factor)

• Selective Immunosuppressants

• Interleukin inhibitors• Others

Immunostimulants

• Interferons (IFNs)

The Issue

The high price in medications is limiting the access to health.

The spending per capita in medications is getting higher.

Price regulation is deficient. The expenditure in medications have had an

increase about 45% between 2006 and 20101.

What it’s happening in Colombia?

Why the overpricing in the medications in Colombia?

Why the lack of resources in this health system?

The Issue

The Colombian Health System 2010

SGSSS

4,5%51,4

% 39,7%

4,4%

Pharmaceutical Market

Pharmaceutical Industry

Logistic Agencies

Ph. Distributor

66% National laboratories23% Int Innovative laboratories3

95% of HCD are produced by Multinational Industry.4

Importations

50% of the HCD are Price regulated.5

IPS - EPS

Trade Margins.Overprice the real cost: 45%

Evidences

Key elements: Incidence IC kept

stable. Guardianships kept

stable. The CTC have

increased in 2000%.

Understanding the Issue

Evidences

While drug use increases, also the price increases, which is not consistent with the behavior "supply and demand”.

Understanding the Issue

Evidences

Understanding the Issue

Colombia consumes drugs more expensive than Australia, Canada, Spain, United States, France, Italy and England. In Colombia drugs are paid up to 240% more expensive than in other countries. Econometrics SA6

Understanding the Issue “Cause – Effect Analysis”

Understanding the Issue

In Summary

Understanding the Issue

Our behavior problem

Malpractices.• Overpricing of

medicines.• Irrational use of

medication• Irrational use of the

health resources

Goal behaviour• No deficit in the

National Health system.

• Rational expenditure in medicines.

• Equity in the Health System

Behavior expected

2000 2010Expendit

ure

Δ

popula

tion *

QL

Pharmaceutical Inflation ΔP*Q

Pharmaceutical Policy8

10 strategies were established in this new policy.

First three were focused on ensuring access to reliable information about pricing, and quality and use of drugs.

The last seven including the development of tools and systems to regulate prices, including several other items that link their action on other aspects of the drug chain.

The government’s solution

Cost Effectiveness Analysis and Operations Research9.

Why? Health priorities. Budget constrains (OR). Get great health gains. Feasible solution,

sometimes is not obvious. Equitable solutions

My solution

Operation Research Quality Unit Gain per $Unit.(per treatment of Breast Cancer)11.

Docetaxel

Paclitaxel

Objetive function

My solution

Government Solution

Optimal Solution

Conclusions

The causes which contribute more in the high expenditure in medications in Colombia according with this survey are: 1. The overpricing of medicines.2. The irrational use of medication / prescribing3. and the irrational use of the health resources.

The Pharm Policy 12’ need to focuses its action in the definition of the tools and strategies to ensure the rationalization of the health budgets, not only focusing in price regulation.

The CEA and OR, are tools which can give quantitative solutions to help guide optimal and equitable decisions.

References

1 Colombian National Administrative Deparment of Statistics http://www.dane.gov.co

2 World Health Organization http://apps.who.int/ghodata/?vid=710 3 Colombian Health Indicators June 2007

www.minproteccionsocial.gov.co 4 Some indicators of health expenditure ratios, 1999-2003. http://

www.who.int/whr/2006/es/index.html 5 Base Agruphar, IMS, Money Magazine. 6 Ombudsman "Evaluating Health services offered by health

promotion entities". Bogotá, 2003, p. 52-53 7 Econometrics, Consultants, Study of drug pricing policy in Colombia

Final report. Bogota 2005 8 Colombian National Pharmaceutical Policy 2012

http://www.minsalud.gov.co/ 9 Document Ministry of Agriculture and Rural Development - Aloe

Production Chain 10 Market Intelligence. Pharmaceutical Sector. IFARMA. September

2008 11 Study of the pricing of drugs in Colombia. Final Report, August

2005, econometrics consultants.

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