Pharmaceutical rebates - OECD

METHODOLOGICAL ISSUES IN SHA 2011

By SHA TEAM

16th OECD Meeting of Heath Accounts Experts 22-23 October 2014

Proposal for future work

• Pharmaceutical Spending

– Accounting of Pharmaceutical Rebates

– Pharmaceuticals as part of inpatient treatment

• Tax credits and allowances

• Informal payments

Different designs of pharmaceutical

rebates

• Price reductions – refunds granted by pharmaceutical companies linked

to sales volume

– in-kind support

– bundling

• (Legal) frameworks: – regulations

– individual negotiations

– tendering

• Arrangements: – shared among actors

– Choice between price reductions or refunding

Consequence of the existence of rebates to SHA reporting

SHA accounting of rebates?

• How should rebated pharmaceuticals be valued?

– Can rebates be netted out?

• Gross price (list prices) – rebate = net price

– What if rebate payable in t+1

• Accounting for rebates?

– Pharmacy grants rebate to HF

– Manufacturer/wholesaler makes payment to HF

• Are they part of SHA universe?

• How is that transaction considered in SHA?

– Separate HP/HF? Can manufacturers finance HC51?

How do countries deal with these issues?

Pharmaceuticals for inpatients

• Pharmaceuticals for outpatient treatment

– Dispensed by pharmacy or hospitals

HC5.1

• Pharmaceuticals for inpatient treatment

– Integral component of treatment (but not necessarily included in DRG separate funding possible)

– Frequently dispensed/prepared by hospital pharmacies

HC1.1

• Changes in reporting observable recently

Where to draw the boundary?

• To be considered for Financing Schemes (HF) and Revenues of Financing Schemes (FS)

– Tax credit:

…amounts deductible from the tax that otherwise would be payable

– Tax deduction/allowance

…amount deductible from revenues/income subject to taxation

• Can be applicable to OOP health spending (HF)

• Can be applicable to Payment of premiums (FS)

Tax credits and tax allowances in

SHA 2011

Consequence to SHA reporting

• Differences for consumption of health goods and services (HF) compared to the purchase of/contribution to health insurance (FS)

• Accounting has consequences for public/private (compulsory/voluntary) split

• Practical issues – data sources - cash/accrual (tax return in t+1)

Accounting for tax credits, … etc.

How do countries deal with these issues?

• Non-official payments to health providers

– Faster access

– Better care

– Non-declared employment of care workers

• Relevance differs between countries

• Spending difficult to estimate

• Also included in National Accounts

Informal Payments

How do countries deal with these issues?

• Setting up of small groups (3-5 countries) to analyse these issues throughout the next year

• Aim: develop guidelines

• Lead by countries, support from Secretariat

• Presentation of results in next year’s HA Meeting

Proposal

• How do countries deal with

– Pharmaceutical rebates

– Tax credits / tax allowances

– Informal payments

in their National Health Accounts ?

• Who would be interested to join a working group on one of the topics?

Questions for discussion