The Public Financing of Pharmaceuticals

The Public Financing of Pharmaceuticals

An Economic Approach

Edited by Jaume Puig-Junoy

This book provides a complete approach to the economics of financing medicines and policy implications for the efficiency and equity of health systems. In all health systems with majority public financing, pharmaceutical reimbursement is one of the key factors in policies of change and transformation of health services in order to face the future with guarantees of financial sustainability.

Chapter 9: Prescriber incentives

L. Cabiedes and V. Ortún

Subjects: economics and finance, health policy and economics, industrial economics, public finance


L. Cabiedes and V. Ortún One in eight Japanese hospitals accepted a prospective tariff per type of disease . . . the amount of drugs supplied to inpatients decreased by 83 per cent. Japanese doctors prescribed and dispensed the drugs . . . the Ministry of Health and Welfare wants to put a stop to this practice. The Economist, 19 October 1996 It’s a pity cheaper doesn’t always mean better, more appropriate. Your GP INTRODUCTION Ideally, the prescriber (the patient’s agent) should indicate the most appropriate medicine for each situation, taking into consideration the variables affecting the patient (diagnosis, prognosis, ease of administration, side effects and others) and the social opportunity cost. The criterion generally adopted in evaluating the prescription is one of social appropriateness or suitability. It is important to bear in mind that there are two alternative viewpoints to that of society to evaluate appropriateness: the clinical perspective and that of the individual patient. Clinical appropriateness is established in terms of expected benefits and costs for the average patient. The viewpoint of the individual patient is incorporated when guidelines for good clinical practice are adapted to the patient’s attitude to risk, or the various quality-of-life factors that each person perceives differently. Finally, the social perspective – that which is adopted in this chapter – encompasses the notion of opportunity cost and seeks to maximize the ‘welfare function’ that each society freely establishes. Spain stands in an unenviable position of leadership in Europe as regards bacterial resistance, the great and apparently arbitrary variability in prescription rates...

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