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Healthcare Facts and Figures

04-05


Healthcare Facts & Figures HEALTHCARE EXPENDITURE Public Expenditure on Health 1997-2004 Healthcare Expenditure as a % of GDP 2002 Non Capital Health Expenditure 2003 Employment in the Public Health Services 2002 Weekly Expenditure on Medicines versus Other Household Expenditure Growth in State Expenditure on Medicines 1997-2003 Pharmaceutical Expenditure as a % of Healthcare Expenditure

3 4 5 6 7 8 9 10

in Selected Countries

POPULATION AND LIFE EXPECTANCY STATISTICS Irish Population Projections 1996/2031 Life Expectancy in the European Union Self-Perceived Health by Country Principal Causes of Death in Ireland 2003

COMMUNITY DRUG SCHEMES Community Medical Schemes Expenditure 2003 GMS Scheme Expenditure 1997-2003 The Ageing of the GMS 1993-2003 Drugs Payment Scheme Expenditure 1997-2003 Long Term Illness Scheme Expenditure 1997-2003 High Tech Scheme Expenditure 1997-2003 1

11 12 13 14 15 16 17 18 19 20 21 22


Healthcare Facts and Figures 2004/2005

PHARMACEUTICAL MARKET STATISTICS Employment in the Pharmaceutical Industry in Ireland 1988-2004 World Trade in Pharmaceuticals 2002 European Pharmaceutical Market by Main Distribution Channels 2002 Pharmaceutical Expenditure per Capita in Western Europe 2002 Sale of Medicines by Therapeutic Class 2003 Self Medication Market in Ireland 2003 OTC Medicines as a % of the total Pharmaceutical Market 2003

RESEARCH AND DEVELOPMENT The Life Cycle of Medicines Cost of developing a new Medicine Medicines in Development for Children Drop in Death Rates for Diseases Treated with Medicines 1965-1996

23 24 25 26 27 28 29 30 31 32 33 34 34

2


Healthcare Expenditure The last few years have seen dramatic increases in health expenditure as the State has sought to catch up following years of under investment. However, as noted in the Health Strategy “Quality and Fairness – A Health System for You”, much remains to be done.

3

Public expenditure on healthcare has more than trebled in the period 1996 to 2004.

Irish healthcare expenditure has historically been low relative to other Western European States; in 2002 Irish healthcare expenditure at 7.3% of GDP remained amongst the lowest in the EU.

The Irish healthcare system remains a mix between public expenditure (75%) and private expenditure (25%).

The numbers employed in the health services increased by over 36% during the ten years through to the end of the year 2000.

State expenditure on medicines has increased in tandem with the increase in public expenditure on health. Medicines account for just 11.5% of non-capital health expenditure – a small but vital component.

Expenditure on pharmaceuticals, as a percentage of total healthcare expenditure, remains low; Ireland spends nearly a third less than the European average on medicines.


Healthcare Expenditure

Public Expenditure on Health 1997-2004

12

10.1

10 9.1 8.4 8 7.2 â‚Ź 6 Billion

5.7 4.9

4

3.7

4.1

2

0 1997

Source:

1998

1999

2000

2001

2002

2003

2004

Department of Health and Children Statistics 4


Healthcare Expenditure as a % of GDP 2002

Germany

10.9

France

9.7

Greece

9.5

Portugal

9.3

Sweden

9.2

Netherlands

9.1

Belgium

9.1

Denmark

8.8

Italy

8.5

European Average

8.4

UK

7.7

Austria

7.7

Spain

7.6

Finland

7.3

Ireland

7.3

Luxembourg

6.2 0

Source: 5

2

4

OECD Health Data 2004, 1st Edition European Average - EFPIA

6 % of GDP

8

10

12


Healthcare Expenditure

Non-Capital Health Expenditure 2003

Hospitals 46.1% Community Welfare/Protection 11.9% Disability 12.6% Medicines 11.5% Mental Health 6.9% Community Health Services 6.6% (excluding medicines) General Support 4.4%

Source:

Department of Health and Children Statistics GMS (Payments) Board Annual Report 2003

6


Employment in the Public Health Services 2002

NUMBER

% OF TOTAL

15,690

16.4

6,775

7.0

33,395

35.0

Health and Social Care Professionals 12,577

13.1

General Support

13,729

14.4

Other Patient and Client Care

13,513

14.1

TOTAL

95,679

100

Management/Administration Medical/Dental Nursing

Source: 7

Department of Health and Children


Healthcare Expenditure

Weekly Expenditure on Medicines versus Other Household Expenditure

CDs Crisps Prescription Medicines Other Medicines Cakes and Buns Bus fares Hairdressing Cosmetics Chip Shop Purchases Newspapers Betting/Lottery Sweets/Chocolate Tobacco Telephone Petrol Alcohol

1.43 1.47 1.96 2.25 2.72 3.29 3.40 3.54 4.06 4.39 4.66 5.05 12.46 13.24 17.13 31.64 5

10

15

20

25

30

35

â‚Ź

Source:

Central Statistics Office Household Budget Survey 1999/2000 8


Growth in State Expenditure on Medicines 1997-2003 898

900 800

769

700 630 600 504

â‚Ź 500 Million 400 300

411 360 307

200 100 0 1997

Source: 9

1998

1999

2000

2001

2002

2003

GMS Annual Reports from 1997-2003. The GMS figure includes the ingredient cost only and the Hi-Tech Scheme figure excludes patient care fees.


Healthcare Expenditure

Pharmaceutical Expenditure as a % of Healthcare Expenditure in Selected Countries 2002

Denmark Switzerland Netherlands Ireland Luxembourg USA Sweden European Average Germany Greece UK Finland Austria Canada France Spain Italy

9.2 10.3 10.4 11.0 11.6 12.8 13.1 14.5 14.5 15.3 15.8 15.9 16.1 16.6 20.8 21.5 22.4 0

Source:

5

10

OECD Health Data 2004 1st Edition European Average – An EFPIA calculation UK data relates to 1997

%

15

20

25

10


Population and Life Expectancy Statistics

11

The population of the Republic of Ireland now exceeds 4 million for the first time since 1871. The population has increased by nearly a third in the last thirty years, and may increase to over 4.8 million by 2031.

Between 1996 and 2002 life expectancy improved by 2.1 years for men and 1.8 years for women. A baby boy born in Ireland in 2002 can expect to live 75.1 years, an improvement of 2.8 years over the last decade.

The life expectancy of those aged over 65 has improved significantly in recent years but still remains low, relative to our Western European neighbours.

The percentage of elderly people in the population is set to increase by over 1/3 by 2020. This will have significant implications for the healthcare budget in the years ahead. For example the elderly constitute 11.3% of the Irish population, yet receive 47% of all prescribed medicines on the GMS. *

Circulatory diseases are the principal cause of death in Ireland and along with cancer account for nearly two thirds of all deaths.

Approximately one in five deaths in Ireland in 2004 is of a person aged under 65 years old.

Nearly 50% of Irish people perceive themselves to have very good health. This in a country where, for example, one in every eight people is obese and every second person is overweight. Another worrying statistic is that between 1989 and 1999, Ireland had the highest increase in alcohol consumption amongst EU countries.

*National Medicines Information Centre Therapeutic Bulletin Vol. 6 No. 1 2000 “ Prescribing in the Elderly”.


Population and Life Expectancy Statistics

Irish Population Projections

1996 - 3.6 MILLION

2031 - 4-4.8 MILLION 85+ 80-85 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 05-9 0-4

200 150 100

50

0

50

100 150 200

Thousands of Persons Males Females

Source:

200 150 100

50

0

50

100 150 200

Thousands of Persons Males Females

Central Statistics Office 12


Life Expectancy in the European Union

LIFE EXPECTANCY IN YEARS At Birth

Best Figure

Average Figure

Irish Figure

Lowest Figure

Females

83.1

81.1

80.3

76.0

Males

77.7

74.8

75.1

64.8

Females

20.0

19.6

18.7

16.9

Males

16.9

16.0

15.4

12.5

At Age 65

Source: 13

Central Statistics Office 2004


Population and Life Expectancy Statistics

Self-Perceived Health by Country (%) VERY GOOD

GOOD

FAIR

BAD

VERY BAD

Denmark

40.7

34.6

18.5

4.8

1.4

Germany

8.0

38.8

34.3

14.8

4.1

Greece

53.2

24.0

15.1

6.0

1.6

Spain

18.1

50.7

21.7

8.1

1.4

France

9.3

48.8

33.9

3.9

4.1

Ireland

49.1

32.9

15.3

2.3

0.4

Italy

15.7

44.6

28.3

9.6

1.8

Netherlands

17.2

52.2

22.6

4.2

0.7

Austria

34.3

40.4

18.3

5.6

1.5

Portugal

3.5

44.0

33.1

15.8

3.6

Finland

15.5

45.9

31.7

6.2

0.8

UK

22.2

46.0

22.2

7.3

2.2

Source:

Eurostat Data 2003

14


Principal Causes of Death in Ireland 2003

Circulatory Diseases 38.1% Cancer 26.2% Respiratory Diseases 15.4% Injury and Poisoning 4.7% Other Causes 15.6%

15

Source:

Central Statistics Office 2004


Community Drug Schemes

Community Drug Schemes Expenditure on the community drug schemes has risen steadily in recent years. The factors behind that growth include: •

The development of new treatments, in particular in the areas of preventative medicine and the long-term treatment of chronic illness. For example, the number of patients registered under the High Tech Scheme nearly trebled in the six years from 1997.

The fact that Irish spending on pharmaceuticals is starting from a low base; In 1999 Ireland had the third lowest consumption per capita of medicines in the EU.

The large scale and ongoing increases in Irish health spending. Health expenditure more than trebled in the period 1996 to 2004.

The introduction of Government initiatives to improve public health such as the cardiovascular strategy. The prescribing frequency of cardiovascular system medication has increased from 3.6 million in 1996 to 7.7 million in 2003 (an increase of 114%).

The increasing population of the country. The population has increased by over 280,000 since 1996 and is currently increasing at an average rate of over 0.5% per annum.

The increasing availability of medical cards to the elderly. The number of people over 65 years old with medical cards increased by over 75,000 (over 25%) in the decade since 1993. 16


Community Medical Schemes Expenditure 2003

515

525

450

375 â‚Ź 300 million 225

204

150 104 73

75

0 Long Term Illness Scheme

Source: 17

High Tech Scheme

Drug Payment General Medical Services Scheme (GMS) Scheme

GMS (Payments) Board Annual Report 2003 The GMS figure includes the ingredient cost only and the High Tech figure excludes patient care fees


Community Drug Schemes

GMS Scheme Expenditure 1997-2003 The Scheme provides free medical services to persons who would not otherwise be able, without undue hardship, to afford such services.

600 515 500 433 400 338 300 â‚Ź Million 200

271 231 179

202

100

0 1997

Source:

1998

1999

2000

GMS (Payments) Board Annual Reports 1997-2003 Figures incude ingredient cost only

2001

2002

2003

18


The Ageing of the GMS 1993-2003 While the overall numbers eligible for medical cards have been falling, the number of cardholders aged 65 and over has increased (a trend accentuated by the granting of medical cards to everyone over 70 years old in 2001).

YEAR

TOTAL No. OF ELIGIBLE PERSONS

AS A % OF THE POPULATION

TOTAL No. AGED 65+

65+ AS A % OF ELIGIBLE PERSONS

2003

1,158,000

29.6%

375,000

32.4%

2000

1,148,000

30.3%

323,000

28.1%

1993

1,275,000

35.8%

298,000

23.4%

Source: 19

GMS (Payments) Board Annual Reports 1993-2003


Community Drug Schemes

Drugs Payment Scheme Expenditure 1997-2003

225 204

200

192 178

175 150

141

â‚Ź 125 Million 100 75

105 96 76

50 25 0 1997

Source:

1998

1999

2000

2001

2002

2003

GMS (Payments) Board Annual Reports 1997-2003. The data incorporates the Drug Refund Scheme and Drug Cost Subsidisation Scheme which were replaced by this Scheme in 1999.

20


Long Term Illness Scheme Expenditure 1997-2003 The Long Term Illness Scheme is for persons who suffer from one or more defined illnesses. It gives such persons the right to obtain, irrespective of income, relevant medication free of charge. 80 73 70 62 60 52 â‚Ź Million

50 42 40 34 29

30 25 20 10 0 1997

Source: 21

1998

1999

2000

GMS (Payments) Board Annual Reports 1997-2003

2001

2002

2003


Community Drug Schemes

High Tech Scheme Expenditure 1997-2003 Developments in biotechnology and therapeutics have given rise to the introduction of medicines for the treatment of medicinal conditions, many of which previously had either no effective treatment or required extended in-patient hospital care. Under the Scheme these medicinal products are dispensed by the community pharmacist. 120 104 100 80

80 â‚Ź Million 60

61 49 40

40

32 26

20

0 1997

Source:

1998

1999

2000

2001

2002

2003

GMS (Payments) Board Annual Reports 1997-2003 Figures exclude patient care fees. The number of patients registered under the Scheme has nearly trebled since 1997 from just over 8,000 to over 22,000 in 2003.

22


Pharmaceutical Market Statistics

23

The pharmaceutical industry makes an important contribution to the Irish economy, employing 21,000 people and with exports exceeding €13.3 billion, the country is the biggest net exporter of pharmaceuticals in the world.

The market for pharmaceuticals continues to grow as outlined in the previous section on the community drug schemes.

Irish consumption of medicines remains amongst the lowest in Western Europe. Growth in the Irish market has to be viewed against this background and against the ever-increasing sums being invested to improve public health.

Four therapy areas – the cardiovascular system (22%), the alimentary tract/metabolism (16%), the nervous system (18%) and the respiratory system (10%) - make up two-thirds of the total Irish market for prescribed medication.

Self-medication is an important element of the total Irish market for pharmaceutical products. The leading areas of the market include analgesics (20%) and cough and cold treatments (16%).

The Association of the European Self-Medication Industry (AESGP) has estimated that savings of over €75 million annually could be achieved in Ireland if self-medication was practised more widely. The savings could then be put to better use elsewhere in the healthcare system.


Pharmaceutical Market Statistics

Employment in the Pharmaceutical Industry in Ireland 1988-2004 25000 21000 20000

20000 No. of persons 15000 employed

16000 13100 11200 9400

10000 7700 5000

5200

6200

0 '88

Source:

'90

'92

'94

'96

'98

'00

'02

'03

IPHA Estimates based on CSO and IDA Ireland Data 24


World Trade in Pharmaceuticals 2002

EXPORTS Stg£

IMPORTS Stg£

BALANCE Stg£

Ireland

9,063

1,072

7,991

France

9,476

5,568

3,908

Switzerland

8,496

4,670

3,826

10,031

7,446

2,585

Sweden

2,917

1,065

1,852

Italy

5,296

4,859

436

Netherlands

4,638

4,358

280

Australia

695

1,733

-1,038

Germany

9,135

10,358

-1,223

Spain

1,881

3,305

-1,424

Japan

1,301

3,078

-1,778

Canada

1,005

2,986

-1,981

USA

8,695

14,309

-5,614

UK

Source: 25

Global Trade Information Services (DTI)


Pharmaceutical Market Statistics

European Pharmaceutical Market by Main Distribution Channels 2002 TOTAL

PHARMACY

HOSPITAL

OTHER CHANNELS

â‚Ź million Austria

1,885

1,426

459

0

Belgium

2,983

2,521

462

0

Denmark

1,279

955

313

11

Finland

1,444

1,135

309

0

France

19,911

16,311

3,600

0

Germany

21,850

18,628

2,932

290

Greece

2,618

1,992

626

0

Ireland

977

821

140

16

13,966

11,042

2,924

0

Netherlands

3,194

2,448

458

288

Norway

1,235

1,090

145

0

Portugal

2,510

1,935

575

0

Spain

8,850

6,934

1,916

0

Sweden

2,495

2,242

253

0

Switzerland

2,484

1,380

475

647

United Kingdom 16,499

12,271

3,411

817

TOTAL

83,131

18,980

2,069

Italy

104,180

Note:

Other channels include dispensing doctors, supermarkets, drugstores and other retail outlets.

Source:

EFPIA – The Pharmaceutical Industry in Figures 2004 edition. 26


Pharmaceutical Expenditure per capita in Western Europe 2002 Denmark

239

Ireland

259

Netherlands

276

Greece

278

Finland

309

Sweden

329

Switzerland

354

Spain

354

Luxembourg

355

Austria

358

Germany

408

Italy

484

France

570 0

Source: 27

100

200

OECD Health Data 2004, 1st Edition

300 US $ PPP

400

500

600


Pharmaceutical Market Statistics

Sale of Medicines by Therapeutic Class 2003

Ailmentary Tract & Metabolism 17% Cardiovascular System 21% Nervous System 18% Respiratory System 11% Others 33%*

* These include genito urinary system and sex hormones 5%, general anti-infectives for systematic use 5%, musculo-skeletal system 6% and others 17%. Source:

GMS (Payments) Board Annual Report 2003. Major therapeutic classification of drugs, medicines and appliances for the GMS/DP/LTI Schemes. 28


Self Medication Market in Ireland 2003

Total Market â‚Ź215 million* Analgesics 20% Cough and Cold 16% Vitamins and Minerals 13% Digestives & Intestinal Remedies 11% Skin Treatment 11% Others 29%

Source: 29

IMS Health *At consumer price level


Pharmaceutical Market Statistics

OTC Medicines as a % of the total Pharmaceutical Market 2003 Portugal

8.6

Austria

9.2

Sweden

9.9

Spain

11.1

Italy

11.2

Finland

11.2

Netherlands

12.7

Denmark

13.6

Belgium

14.2

Ireland

16.8

Germany

20.7

UK

21.7

France

22.1 0

5

10

15

20

25

%

Source:

AESGP Economic and Legal Framework for Non-Prescription Medcines 2004 30


Research and Development

31

Research based pharmaceutical companies are the engines of innovation. They have discovered and developed over 90% of all new medicines made available to patients worldwide over the last twenty years.

Pharmaceutical R&D is risky, lengthy and expensive. On average only one or two of every 10,000 promising substances will successfully pass extensive testing in the R&D phase to be approved as a marketable product.

Studies have put the cost of developing a new medicine at almost €900 million.

Only three out of ten marketed medicines produce revenues that match or exceed average R&D costs.

The European pharmaceutical industry employed over 100,000 people in R&D in 2003 and spent a total of over €21 billion on such work.

In this uncertain world the pharmaceutical industry is working with governments to develop responses to bioterrorist threats such as anthrax, smallpox, plague and other diseases. Researchers are also focusing on infectious diseases that affect millions of people all over the world – hepatitis, fungal infections, herpes, influenza, rotavirus, sepsis, sexually transmitted diseases, tuberculosis, urinary tract infections and many more.

Until the 20th century, about half of all Irish children suffered an early death from childhood illness.

A child born today can expect to live an average of 30 years longer than a child born a century ago.

Thanks to better medicines, eight out of ten children now survive leukaemia and death rates for all childhood cancers have dropped by over 50% since the early 1970s.

Pharmaceutical R&D has helped to produce medicines, which have improved life expectancy. According to the World Health Organisation (WHO), there is still no adequate therapy for three quarters of the 2,500 medical conditions currently recognised. Pharmaceutical R&D offers hope that in the future such therapies may be developed.


Research and Development

The Life Cycle of Medicines From concept to product: steps in the genesis of a drug

10,000 molecules screened

100 molecules tested

10 candidate molecules 1 medicine

Research phase

Test phase

0

Development phase

5 years 10 years R&D

Patent filing

Source:

Administrative Procedures 10 years

Commercialisation phase 15 years

20 years

2 to 3 years

Patent expiry

LEEM– Key Facts 2003 32


Cost of Developing a New Medicine

1000 868 800

€ 600 Million 400

200

344

149

0 1975

33

1987

2000

Source: J.A Dimasi, R.W. Hansen and H.G. Grabowski, ‘The Price on Innovation: New Estimates of Drug Development Costs’, Journal of Health Economics 22 (2003): 151-185


Research and Development

Medicines in Development for Children 2004* Asthma

9

Cancer

32

Cardiovascular Disease

11

Cystic Fibrosis

15

Eye Disorders

9

Genetic Disorders

7

Infectious Diseases

11

Psychiatric Disorders

8

Respiratory Disorders

8

Vaccines

15

Other

37 Source: Pharma 2004 * Some medicines are listed in more than one category

Drop in Death Rates for Diseases Treated with Pharmaceuticals, 1965-1996 Percentage Drop in Age-Adjusted Death Rate Rheumatic Fever and Heart Disease 83% Atherosclerosis

74%

Ulcer of Stomach and Duodenum

72%

Ischaemic Heart Disease 62% Emphysema 57% Hypertension 21%

Source:

PhRMA, 1998

34


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Š Irish Pharmaceutical Healthcare Association


IPHA Healthcare Facts and Figures 2005