According to the OECD, whilst health spending is on the rise for many of its member nations, it still sits below pre-crisis levels, showing in Steven Bradshaw’s opinion, the potential the market has yet to show.
Dr Steven Bradshaw: International Health Policy Expert
Steven Bradshaw is an expert on international healthcare policy. Bradshaw’s experience sees him primarily act in an advisory capacity to some of the largest pharmaceuticals and biotechnology companies and government think tanks.
Bradshaw’s experience has taught him the value of wise spending in initiating and evolving the global pharmaceuticals industry. Therefore, he often comments on the financial issues the industry faces, such as the recent AstraZeneca takeover, illustrating to the medical field at large how these developments can benefit the wider industry. For example, in the AstraZeneca case, Bradshaw added new dimensions to the debate, by highlighting how the takeover could potentially benefit the UK’s NHS.
Which is why Bradshaw has taken note of recent Organisation for Economic Cooperation and Development (OECD) report, which suggests that health spending for its member nations, following years of stagnation and decline, is on the rise, even though the rate of growth remains significantly below pre-crisis levels. It indicates the direction the pharmaceuticals industry is headed going forward.
Europe vs. The World: The World’s Winning
According to the 2014 edition of OECD Health Statistics, health expenditures of many European countries continued to fall in 2012, including Portugal, Spain, Italy, Greece, Hungary and the Czech Republic. Furthermore – mostly driven by cuts in public expenditure – health spending in Greece was down 25% on 2009.
Meanwhile, beyond the continent’s borders, health spending saw significant growth in 2012. Chile’s spend, for example, was up 6.5%. Mexico’s, meanwhile had grown by 8.5%, thanks in part to increased efforts towards access to healthcare and universal coverage. South Korea also saw health spending go up (6% a year since 2009), mostly spurred on by rises in private expenditures. Finally, health spending was up 2.1% in the US that year. This was higher than the OECD average, yet comparative to growth rates recorded in the previous two years.
How Are Countries Spending Money On Health?
Furthermore, the report also concluded that across OECD member nations, overall health spending accounted for an average of 9.3% of gross domestic product (GDP) in 2012; compared to the 9.2% figure recorded the previous year. Curiously, health expenditures in the UK fell exactly in line with the OECD average; 9.3% of GDP.
Specifically, the study went on to note that whilst in 2012, spending on hospital and outpatient care increased in many countries, pharmaceuticals spend, which has experienced significant falls since 2009, kept falling. Price cuts have prompted these reductions; often via price negotiations with pharmaceuticals producers, as well as the larger share of the market taken on by generic drugs.
Generics are More Popular than Ever
This has risen due to patent expiries for a number of high-volume, high-cost brand-name drugs, as well as the initiation of policies designed to promote the use of cost effective generics.
Between 2008 and 2012, the portion of the market represented by generics grew on average by 20%; meaning that in 2012, it accounted for 24% of total pharmaceuticals spending. Sharp increases were particularly noted by the OECD in Spain (+100%), France (+60%), Denmark (+44%), and the UK (+28%).
Steven Bradshaw Comments on the Future of Health Spend
Steven Bradshaw’s experience in the industry has taught him the value of wise investment; governments need to invest in healthcare to ensure they keep up with the trajectory of the modern medical field because innovation and access to treatment costs money. Whilst the rise in health spend is positive, the relative stagnation in European markets, as well as the weak rate of pharmaceuticals spend, are issues that need to be addressed going forward, to ensure that the industry is able to continue to create and develop life changing medical treatments. However, Dr Bradshaw adds that investments should be strategic and, if we look at the NHS for an example, more can be done to tactically manage spending. Although when the NHS was founded in 1948 it was a world leader in healthcare innovation, today more money is wasted than ever before – UK healthcare leaders should consider learning from other countries, such as Japan where waiting lists to see a physician are rarely more than 1 day. Here less is spent and more is delivered by efficient use of money and resources with reduced wastage.