The Scottish Government

« Previous | Contents | Next »

Listen

ANNEX A

SUMMARY FROM THE SCOTTISH EXECUTIVE HEALTH DEPARTMENT'S REVIEW OF THE USE OF THE PATIENTCO-PAYMENTS IN OTHER COUNTRIES

1. In the modern world of health care, pharmaceutical drugs are a central part of the treatment for patients. How to contain the cost of this component of health care systems, while providing a fair and effective method of providing drugs to those patients who need them, has been a preoccupation of governments around the world for many years.

2. The main forms of cost containment employed by governments in relation to pharmaceutical drugs are:

• Price and profit controls applied to pharmaceutical companies, distributors and sellers;
• Reimbursement systems including patient co-payments, the use of prescriptions and over the counter medication ( OTC), the introduction of reference price lists, generic substitution, and drawing up lists of reimbursable drugs;
• Other fiscal measures, such as having a budget for how much a country will spend on prescription medication, and
• Quality measures, such as prescription guidelines and the work of NHS Board prescribing advisors ^1,2.

3. This summary focuses on the second of these cost containment measures, and summarises how it has been used in Western Europe, North America and Australasia, looking particularly at the use of patient co-payments. It should be noted that, co-payments for medication are complex and vary considerably from country to country, as do health care systems, number of reimbursable drugs and co-payment systems ^3-39.

4. As this variation in policy across countries renders it difficult to draw sound conclusions about whether or not patients pay more or less in Scotland/ UK compared to other countries, the conclusions which can be drawn from two case studies based on hypothetical drug prices and usage rates are also included here.

5. The evidence provided in this summary has been derived from a search of a range of pharmaceutical pricing and reimbursement texts, government websites, and the international literature on prescription charging policy, as it relates to patient co-payments.

Health care systems in Western Europe ⁵, North America and Australasia

6. There is a huge variety of different health care systems in Western Europe, North America and Australasia. Firstly, in terms of health care systems generally, three main types exist:

7. However, in looking at health care systems in more detail, it becomes clear that no system can be seen as being exclusively funded by either public or private monies. Even in the USA, Medicare and Medicaid offer publicly funded health care for certain groups ⁵.

8. Secondly in terms of medication, a consistent feature of all health care systems in this review is government systems for subsidising the cost of medication for at least some groups of the population ^3-39.

9. Many countries offer this subsidy only on medication which forms part of a list; drugs on this list are normally prescription based medication, rather than OTC drugs. Some countries have 'negative lists' of medication which are not reimbursable, while others have 'positive lists' of medication which are reimbursable. Positive lists tend to limit what can be reimbursed to a far greater extent, than negative lists, as only those products listed can be reimbursed. The UK operates a loose form of negative list system, whereas many other countries such as Austria have positive lists to reduce their pharmaceutical costs and encourage the use of generics ^3-39.

Patient Co-payments

Table 1: Patient Co-Payments for Medication (Normal Co-Payments)^3-39

* It should be noted that although a conversion to sterling is included, cost of living and other aspects of health care systems vary between countries so caution should be taken in interpretation.
** Charges are either per drug prescribed, per pack of a given medicine or per item on a prescription form.
*** Other countries have caps on payment but their system is not solely based on this.

10. In terms of co-payments for government subsidised prescription medication, all the countries in the review, apart from The Netherlands, have some form of co-payment - i.e. patients must make a contribution towards their medication (see table 1) . However, the health care system in the Netherlands is currently being reformed, and as part of this reform, it has been proposed that patients will start to pay something towards their drugs ³. It should also be noted that although Wales is in the process of abolishing its prescription charge, co-payments are being phased out through year on year reductions ³⁹. Finally, in Italy, regions are now able to introduce their own system of reimbursement, leading to some regions abolishing patient co-payments ³.

11. As can be seen in Table 1, the most frequent form of co-payment for the countries in this review is asking patients to pay a percentage of the cost of their medication. As can be seen above, different geographical locations seem to favour different approaches, with Australasia favouring a fixed charge, Europe a percentage charge, and North America complex co-payment systems.

Reduced Co-payments and Co-payment Exemptions

12. All the countries in this review offer some form of exemption or co-payment reduction for certain groups who might find it hard to pay for the cost of their medication. The exception is The Netherlands, where medication is practically free for everyone (see table 2) although the introduction of patient co-payment is being considered at present.

13. Thirteen of the 18 countries in this review have some form of exemption, or reduced co-payment, for certain medical conditionse.g. diabetes, or for certain uses of drugs e.g. in life-saving situations. However, apart from the UK, where patients exempt on medical grounds receive exemptions for all of their prescription charges, all these countries give reductions and exemptions only for the prescribed medication to treat the condition in question, with occasional specific exceptions e.g. Ireland which gives free prescriptions to patients infected with certain disease via blood transfusions.

14. Eleven countries have reduced payments or exemptions on the grounds of age, with older people or pensioners receiving additional help. Other common exemptions and co-payment reductions are for income and disability groups.

15. As can be seen in Table 2, most countries have a mixture of exemptions and reduced co-payments however three countries only offer exemptions and a further three solely reduced co-payments.

Table 2: Patient Co-Payments for Medication^3-39(Reduced and/or Exempt by category*)

* It should be noted that this table indicates where reductions and exemptions lie. However what these cover within each category vary from country to country. The Netherlands is not included in this table as in realty patients do not pay co-payments.

** Low income pregnant women, children, care home patients.
Key: = Reduced Payment = Exemption (greyed out items indicate that only a partial reduction or exemption is available e.g. New Zealand where children do not pay for prescriptions under 6 year of age)

Caps on Co-payments

16. Although only two countries have reduced co-payments for high users of services or prescription medication (see table 2), it should be noted that at least 10 of the countries in the review have some form of cap on co-payments. The most common is a cap on how much any patient pays for their prescription medication over a given time period. In some countries a cap is placed on costs only for certain groups or services.

Case Studies

17. As noted above, the variation in charging policy across countries renders it difficult to draw sound conclusions about whether or not patients pay more or less in Scotland/ UK compared to other countries. Given this difficulty, case studies based on a hypothetical range of drug prices and usage rates were considered to look at the impact of differing charge regimes and the use of capping. These case studies showed that:

• At very low drug costs, patients in Scotland/ UK pay more, but face lower costs relative to other countries for medium to high priced medication.
• Overall, patients in fixed co-payment regimes, such as the UK, pay more relative to patients in other types of co-payment regime (related to the cost of the medication) when the cost of the medication is low, but pay less when the cost of the medication is high.
• The case studies excluded the Netherlands, where, although in theory patients pay the difference in cost between the reference and actual price, in practice patients make almost no payment.

Conclusion

18. As can be seen above, co-payments for medication are complex and vary considerably from country to country as do health care systems, number of reimbursable drugs and co-payment systems. There are however some common themes:

• All the countries in this review offer some form of subsidised prescription medication for at least some of their population. The commonest type of co-payment is to ask patients to pay a percentage of their medication related cost.
• Reduced co-payments and exemptions are available in all the reviewed countries apart from the Netherlands, which has basically free prescription medication for everyone.
• Most countries have a mixture of reduced payments and exemptions.
• The most common exemption and reduced payment category is medical grounds/ the use of the drug for a particular purpose. The UK offers exemption from the cost of all prescriptions on medical grounds. The next most frequent reason for exemption and/or reduced payments is age (older people) followed by income and disability.
• Most countries also have a cap on how much patients pay for their medication, most frequently by capping how much patients pay in a given time period.

19. All of the above suggests that the UK has a relatively unusual co-payment system for prescription medication. Out of the 18 countries in this review, only the UK and four other countries have a co-payment system based on a fixed price. The UK does not offer reduced co-payments, only exemptions. Only two other countries have this type of system and they do not operate fixed price systems. The UK is also the only country which offers exemptions from all prescription medication costs for those patients given exemption on medical grounds. It can be concluded that the UK has one of the most generous subsidised medication systems of those reviewed.

Bibliography

1. Almardottir A. B. and Traulson, J. M (2005) Cost containment as part of pharmaceutical policy, Pharmacy World and Science, 27:4, 144-148
2. Building a Better Scotland INITIATIVE H/C4-IMPROVED PRESCRIBING OF DRUGS 2005-2008: ACTION PLAN available at http://www.show.scot.nhs.uk/publicationsindex.htm
3. Bronner, M et al (2005) Pharmaceutical Pricing & Reimbursement 2005: a concise guide, PPR Communications Ltd
4. http://www.medicareaustralia.gov.au/yourhealth/our_services/pbs.htm [Accessed 9/01/2006]
5. Seget, S (2005) Pharmaceutical Pricing Strategies: price optimisation, reimbursement and regulation in Europe, US and Japan, Business Insights Ltd.
6. http://www.medicareaustralia.gov.au/yourhealth/our_services/apbs.htm#how [Accessed 9/01/2006]
7. http://www.medicareaustralia.gov.au/yourhealth/our_services/msn/threshold_300.htm#c [Accessed 9/01/2006]
8. http://www.betterhealth.vic.gov.au/bhcv2/bhcarticles.nsf/pages/Concession_cards?OpenDocument [Accessed 9/01/2006]
9. http://www.dva.gov.au/health/vtec/treatmentcards.htm [Accessed 9/01/2006] also know as 'Repatriation Pharmaceutical Benefits Card (Orange Card)'
10. http://www.medicareaustralia.gov.au/yourhealth/our_services/pbs_safety_net.htm [Accessed 9/01/2006]
11. http://www.centrelink.gov.au/internet/internet.nsf/ea3b9a1335df87bcca2569890008040e/36f9a854435b37b0ca2570d5000d1444!OpenDocument & http://www.centrelink.gov.au/internet/internet.nsf/ea3b9a1335df87bcca2569890008040e/c0891762a5fd2350ca256e8d0012ef8e!OpenDocument [Accessed 9/01/2006]
12. http://www.moh.govt.nz/moh.nsf/wpg_index/About-Eligibility+-+NZ+Health+System+-+What+is+publicly+funded [Accessed 10/01/2006]
13. http://www.workandincome.govt.nz/get-financial-assistance/csc/what-does-it-do.html [Accessed 10/01/2006]
14. http://www.workandincome.govt.nz/get-financial-assistance/csc/other-cards.html [Accessed 10/01/2006]
15. http://canadaonline.about.com/od/prescriptiondrugsprograms/ [Accessed 10/01/2006]
16. http://www.drugcoverage.ca/p_private_insurance.asp [Accessed 10/01/2005]
17. http://www.drugcoverage.ca/ [Accessed 10/01/2005]
18. http://www.cms.hhs.gov/MedicaidGenInfo/Downloads/MedicaidAtAGlance2005.pdf [Accessed 11/01/2006]
19. http://www.cms.hhs.gov/MedicaidGenInfo/05_SCHIP%20Information.asp#TopOfPage [Accessed 11/01/2006]
20. https://www.pparx.org/about.php [Accessed 11/01/2006]
21. http://www.cms.hhs.gov/center/people.asp [Accessed 11/01/2006]
22. http://www.cms.hhs.gov/MedicaidGenInfo/ [Accessed 11/01/2006]
23. http://www.cms.hhs.gov/apps/media/press/testimony.asp?Counter=1278 [Accessed 11/01/2006]
24. http://www.kfunigraz.ac.at/iwiwww/publ/reichmann_26.pdf [Accessed 12/01/2005]
25. http://www.euro.who.int/pharmaceuticals/Topics/Overview/20020430_1 [Accessed 12/01/2006]
26. http://www.euro.who.int/pharmaceuticals/Topics/Overview/20020425_4 [Accessed 12/01/2006]
27. http://oasis.gov.ie/health/health_services_in_ireland/prescribed_drugs_and_medicines.html [Accessed 12/01/2006]
28. http://www.euro.who.int/pharmaceuticals/Topics/Overview/20020417_3 [Accessed 13/01/2006]
29. http://www.euro.who.int/pharmaceuticals/Topics/Overview/20020417_3 [Accessed 13/01/2006]
30. http://www.euro.who.int/pharmaceuticals/Topics/Overview/20020416_1 [Accessed 13/0/2006]
31. http://www.minbuza.nl/default.asp?CMS_ITEM=MBZ426386 [Accessed 13/01/2006]
32. http://www.euro.who.int/pharmaceuticals/Topics/Overview/20020414_10 [Assessed 13/01/2006]
33. http://www.sweden.se/templates/cs/BasicFactsheet____6856.aspx [Accessed 13/01/2006]
34. http://www.euro.who.int/document/e68283.pdf [Accessed 13/01/2006]
35. http://www.parliament.uk/commons/lib/research/rp2003/rp03-084.pdf [Accessed 13/01/2006]
36. http://www.nics.gov.uk/index.htm [Accessed 13/01/2006]
37. http://www.rpsgb.org.uk/pdfs/prescriptioncharges.pdf [Accessed 16/01/2006]
38. http://www.dh.gov.uk/PolicyAndGuidance/MedicinesPharmacyAndIndustry/Prescriptions/NHSCosts/fs/en [Accessed 13/01/2006]
39. http://www.wales.nhs.uk/page.cfm?pid=9586 [Accessed 13/01/2006]

« Previous | Contents | Next »