The Value of Medicines and Vaccines to Irish patients and the Irish economy

Supporting

Irish patientsand the

Irish economyValue of Medicines and VaccinesDelivering value to the Irish health services and the Irish economy

David Gallagher, IPHA President

State expenditure on healthcare

Public health expenditure in 2009 – €15 billion.

Accounts for 11.9% of national income.

Accounts for 25.4% of total public expenditure.

Sustainability of Irish health expenditure is a concern.

Source: ESRI, 2010

Increasing State expenditure on medicines has led to calls for reform

As a result of new discoveries, medicines and vaccines are taking on an increasingly important role in patient care. Partly because of this, we are spending more on pharmaceuticals.

In the period 2000 to 2008 State expenditure on medicines grew from €565 million to €1,901 million.

Source: PCRS, 2000 - 2008

Need to look at the big picture

Reasons for the growth in the State medicines bill.

Benefits of this investment in terms of public health.

Benefits to the Irish State of taking a pro-innovation approach.

Pharmaceutical expenditure per capita in Western Europe

Ireland: Well below averageSource: OECD Health Data, 2008

Percentage of total health expenditure spent on medicines

Ireland: AverageSource: OECD Health Data, 2010

Per item cost on the Community Drug Schemes

High-Tech Scheme

Cost increase linked to increasing number of

patients covered.

Source: PCRS, 2000 - 2008

Reasons for the growth in the State medicines bill

Increasing Population – up 1/6th since 1996 and projected to rise to nearly 7 million by 2041.

Ageing Population – 0.5 million over 65, projected to rise to 1.43 million by 2041. The number of those aged 80 and over is set to quadruple from a 2001 level of 98,000 to 465,000 in 2041.

New treatments becoming available and more patients availing of them e.g. cardiovascular, acid related disorder medicines, oncology medicines.

Reasons for the growth in the State medicines bill (contd)

State decisions on eligibility and administration of the community drug schemes.

The increased incidence of chronic and non-communicable diseases e.g. asthma, diabetes and obesity.

State investment in health since 1997 e.g. cardiovascular and cancer strategies.

Increasing research and development costs.

Benefits of this investment in terms of public health

Helped to improve life expectancy by over a third in the last eighty years to 79 years today.

Helped diminish the number of hospital admissions for 12 major diseases by half, including peptic ulcers, mental illness and infectious disease over the past 40 years.

Assisted in the reduction of the average length of hospital stay from 9.6 days in 1981 to 6.3 days today.

Benefits of this investment in terms of public health (contd)

Enabled hospitals to treat many more patients on a day case basis, up from 85,000 cases in 1987 to 770,000 in 2008 (now constitute 50% of all acute hospital in-patient treatment).

Given the cost of an in-patient bed is €890 per day the ability to treat patients on a day case basis is worth hundreds of million to the State annually.

Proton pump inhibitors

The discovery of H2 antagonists, PPIs and triple therapy has revolutionised the management of peptic ulcer diseases.

For example, in Sweden, from 1956 to 1986, elective surgical operations for peptic ulcers steadily declined from 72.1 to 10.7 per 100,000 inhabitants.

Statins

Several studies have found that use of statins to treat people with high cholesterol reduces:

– hospital admissions. – cardiac surgeries, e.g. bypass surgery and

angioplasty.– number of days patients had to spend in the

hospital.

Statins – a good example of the value of incremental innovation

Source: IFPMA, The Value of Innovation, 2008

Breast cancer therapies

Source: OECD; National Cancer Registry

Vaccines

Consistent wide-spread use of vaccines has proven successful in controlling or even eliminating disease.

With sufficiently wide-spread vaccination even those who are not immunised can be protected via ‘herd immunity’.

While vaccination programmes require support and adequate funding, the associated prevention of mortality and morbidity provides long-term cost savings, increased productivity and economic growth.

This makes them one of the most cost-effective and successful health investments available.

Benefits to the Irish State of taking a pro-innovation approach

More than 120 pharma companies have a presence here, including 13 of the world’s top 15 pharma companies.

The industry directly employs over 25,000 people, half of whom are third level graduates, with as many again employed in the provision of services to the sector.

The industry contributes approximately €3 billion annually in taxes to the State.

Source: IPHA Facts and Figures, 2010; Future Skills of the Biopharma-Pharmachem Sector, 2010

Benefits to the Irish State of taking a pro-innovation approach (contd)

Pharmaceutical production generates over 50% of the country’s exports and 11% of its GDP (Ireland the second largest net exporter of medicines in the world).

Over €7 billion has been invested by the pharma sector over the last ten years.

The replacement value of the investment by the pharmaceutical sector in the Irish economy is over €40 billion.

Source: IPHA Facts and Figures, 2010; Future Skills of the Biopharma-Pharmachem Sector, 2010

Benefits to the Irish State of taking a pro-innovation approach (contd)

The Industry responded to the demand to provide further value for money.

2006 IPHA/HSE Agreement - provided savings of €250m in the period in the 4 years to September 2010.

Additional arrangements agreed this January to provide savings of nearly €100 million over the following 12 months given the economic crisis.

Source: Department of Health and Children

Benefits to the Irish State of taking a pro-innovation approach (contd)

Provision of value-added services such as:

– Nursing support – in-home instruction, helpline, sharps waste collection and safe disposal, blood sampling etc.

– Continuing medical education – meetings, e-learning tools etc.

– Clinical research and investigator initiated studies – grants etc.

– Patient awareness campaigns.

Conclusion

Pharmaceutical innovation is providing many exciting new treatments which save lives and improve quality of life for Irish patients.

Failure to invest in innovation is not cost free as an investment in innovative medicines has been proven to keep people out of hospitals, nursing homes and doctor's surgeries and shorten stays in these facilities where they are required.

Innovative medicines reduce the cost of poor health to individuals, families, the State, strengthen the Irish economy and improve worker productivity.

Support slides

New medicines in development

Source: PhRMA, Oct 2010

Advances in breast cancer therapies have contributed to an increase in survival rates

The five-year relative survival rate is about 80% for the period 1999-2004, the highest rate of improvement in the OECD.

Source for graph: National Cancer Registry

Linked to BREAST CANCER THERAPIES SLIDE 15