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June 26, 2016

IHS: progress in healthcare for patients poses challenge to policy makers, payers

An immense wave of progress for patients is posing increasingly challenging questions for policymakers, payers and healthcare stakeholders in Western Europe. That is at least what a new report by IHS states says. Between 2015 and 2020, growth in public healthcare expenditure is expected to remain negative or subdued.

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According to this IHS Life Sciences report, ‘Comparative Healthcare Financing Trends in Europe: A Retrospective and Forward-Looking View,’ the next wave of treatment breakthroughs coincides with a period when cost containment is firmly on the healthcare system agenda. Cameron Lockwood, senior consultant at IHS Life Sciences and the report’s author, continues:  “A wealth of new treatments and innovations, specifically in the cancer field, will reach the market at a time when many countries are on cost-saving drives.”

The report examines healthcare financing trends between two periods: 2010 to 2014 and 2015 through 2020. Countries in the study include France, Germany, the Netherlands, Poland, Spain and the United Kingdom. The diverse set of healthcare systems, pharmaceutical pricing and reimbursement policies, economic conditions and political circumstances in these countries enabled the team to model pricing structures through a variety of systems.

Emerging new treatments and continued economic recovery will contribute to an uptick in public reimbursement spending on pharmaceuticals, the IHS report says. In some countries, this spending is forecast to be less as a share of overall public health expenditure compared to 2014, raising question marks over the ability to finance innovations in therapy.

Subdued ore negative growth public healthcare expenditure

Between 2015 and 2020, growth in public healthcare expenditure is expected to remain negative or subdued. Under a variety of different growth scenarios, forecast public reimbursement spending on oncology medicines is set to account for a share of overall public drug spending broadly similar to current expenditure patterns. A bottom up, budget impact modelling approach suggests that these growth scenarios are able to accommodate significant new therapy classes in some of the most common cancers.

The reality remains however that some countries will face pronounced budgetary pressures. An example is Poland, where pre-existing gaps in access mean that maintaining or only marginally increasing the budget for oncology medicines poses a risk to access to future innovations.  Competing government priorities stemming from campaign pledges limit resources. There has reportedly been a slowdown in the number of innovative new drugs securing reimbursement listing. Spain as well may, depending on the resolution of political uncertainty, have ongoing deficit challenges that will result in constrained resources and thus more pronounced challenges in sustaining access to emerging treatments. 

Germany is predicted to see a negative CAGR in total public healthcare spending over 2015-20. France’s social security deficit challenges reduces spending growth to an historic low. To make up the difference, between 2015 and 2020, rates of growth of private healthcare expenditures are once again predicted to exceed those of public outlays, concludes IHS.

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