IPHA Healthcare Facts and Figures 2006

Healthcare Facts & Figures

HEALTHCARE EXPENDITUREPublic Expenditure on Health 1997-2006

Health Expenditure as a % of GDP 2003

Weekly Expenditure on Medicines versus Other Household Expenditure

Growth in State Expenditure on Medicines 1997-2004

Pharmaceutical Expenditure as a % of Healthcare Expenditure in

Selected Countries

POPULATION AND LIFE EXPECTANCY STATISTICS Changing Population Trends 2004-2050

Comparison of Age-Related Public Expenditure

Self-Perceived Health by Country (%)

Principal Causes of Death in Ireland 2004

Medicine Information Sought on the Internet

COMMUNITY DRUG SCHEMESCommunity Medical Schemes Expenditure 2004

GMS Scheme Expenditure 1997-2004

The Ageing of the GMS 1994-2004

Drugs Payment Scheme Expenditure 1997-2004

Long Term Illness Scheme Expenditure 1997-2004

High Tech Scheme Expenditure 1997-2004

1

345678

9 1011121314

15 161718192021

PHARMACEUTICAL MARKET STATISTICSEmployment in the Pharmaceutical Industry in Ireland 1988-2005

World Trade in Pharmaceuticals 2004

Pharmaceutical Expenditure per Capita in Western Europe 2003

Self Medication Markets in Ireland 2005

OTC Medicines as a % of the Total Pharmaceutical Market 2004

RESEARCH AND DEVELOPMENTThe Life Cycle of Medicines

Cost of Developing a New Medicine

Medicines in Development

VACCINE STATISTICSWorld Vaccine Market

Uptake levels of Vaccines in Ireland 2004

H e a l t h c a r e F a c t s a n d F i g u r e s 2 0 0 6

2

22 2324252627

28 293031

323334

Healthcare Expenditure

• The last decade has seen an unprecedented increase in health expenditure followinga period of cutbacks and stagnation in the 1980’s and the early 1990’s. Publicexpenditure on health has more than trebled in the period 1998 to 2006.

• Healthcare expenditure in Ireland, relative to other European States, is coming froma low base. Irish expenditure in 2003, as a percentage of GDP, remained amongstthe lowest in the EU.

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

• 50% of the population now have some form of private health insurance.

• The numbers employed in the health services increased by over 45% between 1997and 2004.

• State expenditure on medicines has increased in tandem with the increase in publicexpenditure on medicines. Medicines account for just 11.4 % of non-capital healthexpenditure – a small but vital component. This is a third less than the averageacross the OECD States of 17.8% of healthcare expenditure devoted to medicines.

• Medicine prices have remained frozen since 1992 whilst in contrast health inflationcurrently runs at 6.2% per annum.

3

H e a l t h c a r e E x p e n d i t u r e

4

Public Expenditure on Health 1997-2006

0

2

4

6

8

10

12

14

2004 2005* 20062003200220012000199919981997

€

Billion

3.74.1

4.9

5.7

7.2

8.4

9.1

10.1

11.912.6

Source: Department of Health and Children Statistics * The 2005 figures include €280 million in one-off items relating to the establishment of the HealthService Executive (HSE) and in particular the change to an accruals rather than a cash basedaccounting system.

Healthcare Expenditure as a % of GDP 2003

5

% of GDP0 2 4 6 8 10 12

UK

Luxembourg

Ireland

*

*

*

*Finland

Spain

Austria

OECD Average

Italy

Denmark

Belgium

Netherlands

Sweden

Portugal

Greece

France

Germany

6.1

7.3

7.4

7.6

7.7

7.7

8.4

8.6

9.0

9.2

9.6

9.6

9.8

9.9

10.1

11.1

Source: OECD Health Data 2005* Data relates to 2002

Weekly Expenditure on Medicines versus OtherHousehold Expenditure

6


Crisps

CDs

Prescription Medicines

Other Medicines

Cakes and Buns

Bus fares

Hairdressing

Cosmetics

Chip Shop Purchases

Newspapers

Betting/Lottery

Sweets/Chocolate

Tobacco

Telephone

Petrol

Alcohol

5 10 15 20 25 30 35

1.47

1.43

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

€

Source: Central Statistics Office Household Budget Survey 1999/2000

7

Growth in State Expenditure on Medicines 1997-2004

Source: GMS Annual Reports from 1997-2004. The GMS figure includes the ingredient cost only and the Hi-Tech Scheme figure excludes patient care fees.

0

100

200

300

400

500

600

700

800

900

1000

1100

2003 2004200220012000199919981997

307360

411

504

630

769

898

1050

€

Million

Pharmaceutical Expenditure as a % of HealthcareExpenditure in Selected Countries 2003

8


%0 5 10 15 20 25

ItalySpain

FranceOECD Average

CanadaAustriaFinlandGreece

GermanySweden

USALuxembourgNetherlands

IrelandSwitzerland

Denmark

22.121.8

20.917.8

16.916.116.016.0

14.6

12.913.1

11.411.4

11.6

10.59.8

*

1

1

1

Source: OECD Health Data 2005(1) Data relates to 2002* OECD Data for Ireland relates to 2002 and is 11%, IPHA estimate for 2003 is 11.4%

Population and Life Expectancy Statistics

• The population of the Republic of Ireland now exceeds 4 million for the first time since1871. The population has increased by nearly a third in the last thirty years and mayincrease to over 4.8 million by 2031.

• The percentage of elderly people in the population is set to increase by nearly 50% by2025. This will have significant implications for public spending and in particular healthcareexpenditure. For example a recent European Commission report found that average publicexpenditure in Ireland on those in the 80-84 age cohort was more than double that onthose in 60-64 cohort.

• The life expectancy of those over the age of 65 has improved significantly in recent yearsbut remains low by comparison to our Western European neighbours.

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

• Approximately one in five deaths in Ireland is of a person aged less than 65 years old.

• Over 87% of Irish people perceive themselves to have very good/good health (as againstan EU 15 average of 61%). This is in a country where 1 in every 8 persons is obese andevery 2nd person is overweight. Between 1989 and 1999, Ireland had the highestincrease in alcohol consumption amongst EU countries.

• People are increasingly accessing information in relation to health from the Internet withinformation about medicine side effects, safety and efficacy being that most commonlysought.

9

Changing Population Trends 2004-2050

10

P o p u l a t i o n a n d L i f e E x p e c t a n c y S t a t i s t i c s

Source: Eurostat 2005

TOTAL POPULATION MILLIONS POPULATION STRUCTURE %65+

EU 25 456.8 470.1 449.9 -1.5 16.4 22.6 29.9

EU 15 382.7 398.8 384.4 +0.4 17.0 21.8 30.0

Ireland 4.03 4.9 5.5 +36.0 11.1 16.5 26.2

2004 2025 2050 % CHANGE2004/2050

2004 2025 2050

11

Comparison of Age-Related Public Expenditure

MALES FEMALES

Source: The impact of ageing on public expenditure: projections for the EU25 Member States onpensions, health care, long term care, education and unemployment transfers (2004-2050), European Commission 2006

2800

2117

2518

1939

3854

2914

5392

4052

6110

46044514

3365

6034

4472

6567

4964

0

1000

60-64 yrs 70-74 yrs 80-84 yrs 90-94 yrs 60-64 yrs 70-74 yrs 80-84 yrs 90-94 yrs

Ireland

€ €

2000

3000

4000

5000

6000

7000

8000

0

1000

2000

3000

4000

5000

6000

7000

8000

EU 15

12


Self-Perceived Health by Country (%) - 2003

Source: Source: Eurostat Data 2005*Data was collected in relation to men and women and averaged for presentational purposes

VERY GOOD/GOOD FAIR BAD/VERY BAD

Ireland 87.1 11 1.9

Netherlands 77.7 17.9 4.4

Belgium 77.3 18.9 3.8

Denmark 75.4 18.4 6.2

Austria 74.8 18.2 7

Sweden 74.2 19 6.8

Greece 73 17.8 9.2

UK 68.5 22.2 9.3

Spain 68.1 23.1 8.8

Italy 61.1 31.6 7.3

Finland 58.8 30 11.2

France 58.2 33.9 7.9

Portugal 47.7 33 19.3

Germany 47 34.3 18.7

13

Principal Causes of Death in Ireland 2004

Source: Central Statistics Office 2004

Circulatory Diseases 37.7%

Cancer 27.4%

Respiratory Diseases 14.4%

Injury and Poisoning 4.4%

Other Causes 16.1%


14

Medicine information sought on the internet

Source: 9th HON Survey, Health On the Net Foundation, Winter 2004-2005. NB: respondents had a multiple-choice questionnaire. (http://www.hon.ch/Survey/Survey2005/res.html#Ancre13)

%0 5 20 30 40 50 60 70 80

Online Purchases

Prices

Generics

Interactions

Herbal or Natural

Efficacy

Safety

Side effects 71.9

16.1

29.1

48.3

48.3

51.7

60.5

66.4

15

Community Drug SchemesExpenditure on the community drug schemes has risen steadily in recent years. The factors behind thatgrowth include:

• Ireland’s rapidly increasing and ageing population - Ireland’s population has increased by over500,000 since 1996. The number over 65 is increasing steadily and is projected to double to over840,000 by 2031.The granting of medical cards to everyone over 70 is accentuating the effect ofthe ageing population on the medicines bill.

• The development of new treatments and more patients availing of them – for example in the areasof preventative medicine and the long-term treatment of chronic illness. The number of patientsregistered under the High Tech Scheme now exceeds 29,000, up from 8,250 in 1997 (an increaseof 250%).

• The introduction of Government initiatives to improve public health - for example thecardiovascular strategy. The prescribing frequency of cardiovascular system medication in the GMSScheme has increased from 3.6 million in 1996 to 8.6 million in 2004 (an increase of 139%).

• Epidemiological evolution - the increased incidence of chronic and non-communicable diseases isgenerally quite costly to treat. Ireland has one of the highest incidences of asthma in the world,currently 12%, and has increasing levels of diseases like diabetes and obesity.

• State decisions on eligibility and administration of the drug schemes - the granting of medical cardsto everyone over 70 and the introduction of the Drug Payment Scheme saw substantial growth inthe State bill. The Deloitte review* of the GMS noted that the provision of medical cards to theover 70s cost an additional €126m in the first full year of the arrangement in 2002. It also notedthat the number of claimants under the DPS increased by 40% between 2000 and 2002.

The growth in medicine expenditure also has to be seen in the context of the fact that Irish spending onpharmaceuticals is starting from a low base. According to comparative OECD data for 2003 Ireland hadthe lowest expenditure per capita on medicines in Western Europe. It also has to be seen in the contextof the large scale and ongoing increases in Irish health spending.

* Deloitte & Touche Review of Governance and Accountability Mechanisms in the General Medical Service

16

C o m m u n i t y D r u g S c h e m e s

Community Medical Schemes Expenditure 2004

€

million

86141

224

597

0

75

150

225

300

375

450

525

600

General Medical Services(GMS) Scheme

Drug PaymentScheme

High TechScheme

Long Term IllnessScheme

Source: GMS (Payments) Board Annual Report 2004The GMS figure includes the ingredient cost only and the High Tech figure excludes patient care fees

17

GMS Scheme Expenditure 1997-2004The Scheme provides free medical services to persons who would not otherwisebe able, without undue hardship, to afford such services.

Source: GMS (Payments) Board Annual Reports 1997-2004Figures include ingredient costs only

179202

231

271

338

433

515

€

Million

597

0

100

200

300

400

500

600

2003 2004200220012000199919981997


18

The Ageing of the GMS 1994-2004While the overall numbers eligible for medical cards have been falling, thenumber of cardholders aged 65 and over has increased (a trend accentuated bythe granting of medical cards to everyone over 70 years old in 2001).

Source: GMS (Payments) Board Annual Reports 1994-2004

YEAR TOTAL No. AS A % OF THE TOTAL No. 65+ AS A %OF ELIGIBLE POPULATION AGED 65+ OF ELIGIBLE

PERSONS PERSONS

2004 1,149,000 29.3% 383,000 33.3%

2000 1,148,000 30.3% 323,000 28.1%

1994 1,287,000 36% 297,000 23.1%

19

Source: GMS (Payments) Board Annual Reports 1997-2004.The data incorporates the Drug Refund Scheme and Drug Cost Subsidisation Scheme which were replaced by this Scheme in 1999.

Drugs Payment Scheme Expenditure 1997-2004

76

96105

141

178

192204

€

Million

0

25

50

75

100

125

150

175

200

225

2003

224

2004200220012000199919981997

Long Term Illness Scheme Expenditure1997-2004The Long Term Illness Scheme is for persons who suffer from one or moredefined illnesses. It gives such persons the right to obtain, irrespective ofincome, relevant medication free of charge.

20


2529

34

42

52

62

73

€

Million

0

10

20

30

40

50

60

70

80

90

2003

86

2004200220012000199919981997

Source: GMS (Payments) Board Annual Reports 1997-2004

21

High Tech Scheme Expenditure 1997-2004Developments in biotechnology and therapeutics have given rise to the introduction ofmedicines for the treatment of medicinal conditions, many of which previously hadeither no effective treatment or required extended in-patient hospital care. Under theScheme these medicinal products are dispensed by the community pharmacist.

2632

40

49

61

80

104

€

Million

0

20

40

60

80

100

120

140

160

2003

141

2004200220012000199919981997

Source: GMS (Payments) Board Annual Reports 1997-2004Figures exclude patient care fees. The number of patients registered under the Scheme has increased from just over 8,000 to over 28,300 in 2004.

P h a r m a c e u t i c a l M a r k e t S t a t i s t i c s

22

Pharmaceutical Market Statistics• The pharmaceutical industry has been one of the principal contributors to the growth

of the Irish economy in recent years. The industry employs 24,000 people directly, witha further 24,000 people employed providing services to it. In 2005, pharmaceuticalexports exceeded €14.75 billion making Ireland the largest net exporter ofpharmaceuticals in the world. Using the broader pharmachem measure, exportsexceeded €44 billion, or nearly 50% of all exports from the state.

• One hundred and twenty companies have operations in Ireland, including fourteen ofthe top fifteen worldwide and the total replacement value of the investment by thesector in the Irish economy exceeded €40 billion. Over €4.6 billion has been investedin the last six years in a period when job growth in the sector has averaged 1,400annually.

• The market for pharmaceuticals continues to grow as outlined in the previous sectionon 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 theever-increasing sums being invested to improve public health.

• Four therapy areas – the cardiovascular system (21%), the alimentary tract/metabolism(17%), the nervous system (18%) and the respiratory system (11%) - make up over two-thirds of the total Irish market for prescribed medication.

• Self-medication is an important element of the total Irish market for pharmaceuticalproducts. The leading areas of the market include analgesics (23%), cough and coldtreatments (17%) and vitamins and minerals (13%).

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

23

Employment in the Pharmaceutical Industryin Ireland 1988-2005

52006200

7700

9400

11200

13100

16000

2000021000

24000

1988 1990 1992 1994 1996 1998 2000 2002 2003 20040

5000

10000

15000No. of

personsemployed

20000

25000

Source: IPHA Estimates based on CSO and IDA Ireland Data


24

Source: World Trade Organisation

World Trade in Pharmaceuticals 2004

EXPORTS $M IMPORTS $M BALANCE $M

Ireland 18,803 2,456 16,347

Switzerland 23,027 11,608 11,418

Germany 34,056 26,274 7,782

UK 22,648 15,850 6,798

France 21,212 15,989 5,223

Sweden 7,220 2,484 4,736

Netherlands 10,664 9,987 677

Austria 3,576 3,727 -151

Italy 11,112 12,806 -1,694

Belgium 30,598 32,734 -2,136

Spain 4,857 8,323 -3,466

Japan 3,540 7,114 -3,574

USA 23,980 35,371 11,391

25

Pharmaceutical Expenditure per capita inWestern Europe 2003

Source: OECD Health Data 2005* Data relates to 2002

272

322

339

340

366

367

370

398

401

436

498

606

339

0 100 200 300 400 500 600US $ PPP

Denmark

261Ireland

Greece

Finland

Sweden

Netherlands

OECD Average

Austria

Luxembourg

Switzerland

Spain

Germany

Italy

France

*


26

Self Medication Market in Ireland 2005

Analgesics 23%

Cough and Cold 17%

Vitamins and Minerals 13%

Digestives & Intestinal Remedies 10%

Skin Treatment 11%

Others 26%

Source: IMS Health* At consumer price level

Total Market €248 million*

27

OTC Medicines as a % of the totalPharmaceutical Market 2004

Source: AESGP Economic and Legal Framework for Non-Prescription Medicines 2005* Self Medication Market as a % of the Total Pharmaceutical Market

8.1

9.1

9.7

10.3

10.4

10.6

11.7

12.9

13.5

16.2

19.0

20.5

25.5

%0 5 10 15 20 25

Portugal

Austria

Sweden

Spain

Italy

Finland

Netherlands

Denmark

Belgium

Ireland

Germany

UK

France

*

R e s e a r c h a n d D e v e l o p m e n t

28

Research and Development

• Research and development of new medicines offers hope to an increasingly ageingpopulation of a longer healthy life, well beyond that of previous generations. For example,there are currently over 900 medicines in development to combat the diseases of ageing suchas Alzheimer’s disease/dementia (27), lung/respiratory disorders (52), rheumatoid arthritis (38).

• Research based pharmaceutical companies are the engines of medicines innovation. Theyhave discovered and developed over 90% of all new medicines made available to patientsworldwide over the last twenty years.

• The process of developing a new medicine is long, complex and risky. On average only one ortwo of every 10,000 promising substances will successfully pass extensive testing in the R&Dphase to be approved as a marketable product.

• Recent studies put the cost of developing a new medicine at almost €900 million.

• It takes an average 10 to 12 years to turn a promising new compound into a marketablemedicine that passes the regulatory standards of safety, quality and efficacy. Once on marketthe average medicine has only 8 to 10 years of effective patent protection left before facinggeneric competition. Only three out of ten marketed medicines produce revenues that matchor exceed the costs of R&D before they lose patent protection.

• The European pharmaceutical industry employed over 100,000 people in R&D in 2004 andspent a total of over €21.5 billion on such work.

• In this uncertain world the pharmaceutical industry is working with governments to developresponses 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 theworld – hepatitis, fungal infections, herpes, influenza, rotavirus, sepsis, sexually transmitteddiseases, tuberculosis, urinary tract infections and many more.

• 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 forthree quarters of the 2,500 medical conditions currently recognised. Pharmaceutical R&Doffers hope that in the future such therapies may be developed.

The Life Cycle of Medicines

29

Source: LEEM– Key Facts 2003

Researchphase

10,000 molecules screened

From concept to product:steps in the genesis of a drug

100 molecules tested

10 candidate molecules1 medicine

Testphase

5 years0 15 years 20 years

Patent filing Patent expiry

10 years R&D 2 to 3 years

Developmentphase

AdministrativeProcedures Commercialisation phase

10 years

30

R e s e a r c h a n d D e v e l o p m e n t

Cost of Developing a New Medicine

149

344

868

€

Million

0

200

400

600

800

1000

200019871975

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

31

Medicines in Development

82

146

399

400

900

0 200 400 600 800 1000

HIV/AIDS

Heart Disease and Stroke

Cancer

Women

Ageing

Source: PhRMA 2005, Innovation.orgFor further information about Medicines in Development visit www.ipha.ie

V a c c i n e S t a t i s t i c s

32

Vaccine Statistics

• The development of childhood vaccines has been one of the great health success stories of thepast hundred years. Diseases such as measles, polio and hib meningitis, which previously killedmillions, can now be prevented.

• Vaccines such as travel vaccines enable people to travel to different parts of the world protectedfrom potentially fatal diseases. These vaccines also offer hope to the populations in thosecountries that diseases can be completely wiped out over time.

• Research continues for new vaccines which offer the prospect of innovative ways to combat theserious threat to human kind posed, for example, by the possible development of bird flu.

• Given the great benefits which childhood immunisation can bring it is deeply worrying that uptakerates for some vaccines in Ireland have fallen to levels significantly below the 95% required toensure community protection.

• Two million children worldwide die each from diseases that can be controlled and preventedthrough vaccination. Half of these deaths are due to measles.1

• People get their information on vaccination from a wide range of sources. For example aEuropean survey found that parents accessed information in relation to paediatric vaccines from awide variety of sources – healthcare professional (81%), newspapers/magazines (36%),television/radio (27%), public health bodies/campaigns (19%), the Internet (10%) andrelatives/friends (9%).2

• The challenge in the years ahead is to develop ways of ensuring that parents have access toreliable, authoritative information upon which they can make an informed decision for the benefitof their children.

1 World Health Organisation Statistics2 European Vaccine Manufacturers Perceptions Survey 2005

33

The World Vaccine Market, 2004

Source: Kalorama Information, All figures are in millionsAll the above figures relate to paediatrics unless followed by an (A)

Combinations $479

Diphteria $435

Hepatitis $90

Haemophilus $229

MMR $424

Pneumoccal $1,104

Poliovirus $343

Varicella $315Others $370

Hepatitis (A) $560

Influenza (A) $1,428

Pneumoccal (A) $315

Travel and other (A) $505

V a c c i n e S t a t i s t i c s

34

Uptake Levels of Vaccines in Ireland 2004

These figures are based on uptake levels at the first opportunity for vaccination to take place.

Source: HSE Health Protection Surveillance Centre* 95% is the World Health Organisations recommended uptake level for vaccines in order to prevent the spread of disease- Diphteria (D3), Pertussis (P3), Tetanus (T3), Haemophilus influenzae type b (HIB3),

Meningococcal Group C (MenC3)

BCG D3 P3 T3 HIB3 POLIO3 MenC3 WHO*0

20

40

60

80

100

© Irish Pharmaceutical Healthcare Association

Franklin House, 140 Pembroke Road, Dublin 4.

Tel: (01) 660 3350 Fax: (01) 668 6672 Email: [email protected]

www.ipha.ie www.medicines.ie

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