Pharmacoeconomics in China：Essentialities and Issues

1、pharmacoeconomics in china：essentialities and issueshaitao li1 ,aixia ma1 and shixue li2 *1. school of international pharmaceutical business, china pharmaceutical university, nanjing, jiangsu, peoples republic of china2. school of public health, shandong university, jinan, shandong, peoples republic

2、 of china*correspondence and reprints: prof. shixue li, school of public health, west campus of shandong university, 44 wenhuaxi road, jinan, shandong 250012, p.r. china. tel: +86-531-88382127; fax: +86-531-88382553; e-mail: key words: pharmacoeconomics; decision-making; guidance

3、; health care decision makersabstractthe use of pharmacoeconomic tool has grown dramatically in the past decade as the provision of healthcare throughout the industrialized world has required increased cost consciousness. however, pharmacoeconomic analysis has not yet been fully exploited as a conce

4、ptual underpinning for public and private health policy decision in china. in this article, we will demonstrate why pharmacoeconomics should become an increasingly important tool for health decision making as a number of significant dynamics, including: () high price of pharmaceuticals; () misuse of

5、 pharmaceuticals; and () need of pharmaceutical industries. however, there are also some issues that hinder the sufficient utilization of pharmacoeconomics in healthcare decision making among all levels, such as insufficient experts, influence of pharmacoeconomics and lack of guidelines. therefore,

6、pharmacoeconomics should be introduced into health reform and some efforts should be done to assist domestic decision makers to enhance the continual development and sufficient utilization of pharmacoeconomics in healthcare decision-making in china. introductionin many countries, pharmacoeconomics h

7、as played an important role in healthcare decision-making. for decision makers who concerns with a national or regional healthcare perspective, pharmacoeconomics can help to determine a rational price and reimbursement for drugs. also, pharmacoeconomics can help to formulate hospital formulary and c

8、linical guidelines for decision makers inside healthcare organizations. pharmacoeconomics can also influence the activities of individual healthcare professionals at the patient level. therefore, pharmacoeconomics as an important tool has already been generally used to inform the decision-making.thi

9、s article will identify the essentialities of, and current issues with, pharmacoeconomics as a good tool to provide information to decision makers, which means why it is essential for china to introduce it as a tool in healthcare decision making. we hope to provide a better understanding of the sign

10、ificance and issues faced with the utilization of pharmacoeconomics, in order to assist domestic researchers and decision makers in their efforts to enhance the continual development and sufficient utilization of pharmacoeconomics in healthcare decision-making. and also, we hope to draw attention of

11、 international bodies to the development of pharmacoeconomics in china.1 essentialities for the use of pharmacoeconomics in china1.1 high price of pharmaceuticalsthe high price of pharmaceuticals in china is mainly caused by two reasons. first, the issues exist in the “obedient addition pricing meth

12、od”, including: () with the essence to pursue the maximum profit, drug industries will provide false-high cost for their products to seek exorbitant profit; () when setting the price for the drugs, only the cost is considered but not the benefit of them, so whether or not the limited health resource

13、s have been utilized reasonably can not be explained objectively; and () meanwhile, the drug price is set from the government perspective, rather than the societal perspective, which will lead to bias and irrational drug prices, and ultimately un-optimum allocation and irrational use of health resou

14、rces.second, the system of underpaid doctors compensated by the excessive medical expense is the immediate cause of the high price of drug in china. because of the insufficient financial subsidy and revenue of health services, profit from drugs as the third channel is the major revenue source of hos

15、pitals. the drug revenue constituent ratio was above 50% from 1993 to 2003, and it would rise to 70%, if the highly priced discount is considered (see table). simultaneously, the ad-libitum and un-reasonable phenomenon exist when purchasing drugs, for example, only profit is under consideration with

16、out considering the variety and quantity, and the cost is ignored especially for imported drugs.gregson n et al. 1 explained that pharmacoeconomics could be a useful tool to price the drugs, for it is able to put both cost and benefit into consideration and balance them to a rational extent. gold et

17、 al. 2 pointed out that the social perspective is the most comprehended, although different perspectives, including society, health services providers, third-payers and so on, can be used. therefore, pharmacoeconomics has the same objective with drug pricing, which implies that it is not for the max

18、imum saving of health resources, but for the optimum allocation and the most reasonable utilization of health resources. simultaneously, pharmacoeconomics can provide evidences for the formulation of relative laws and regulations to constrain the behavior of doctors and hospitals, and to enhance dru

19、g administration 3.1.2 misuse of pharmaceuticalschinese healthcare providers have a dual role: not only do they determine the patients need for drugs, but also they sell the drugs, from which they can make a profit. this may result in an economic incentive for the provider, as an agent for the patie

20、nt, to behave in his or her own economic interests, to the detriment to the patients, both medically and financially. medical service providers can earn a mark-up rate of 15% for western medicine and 30% for chinese medicine 4. since more prescriptions mean greater profit, the providers are more lik

21、ely to prescribe great quantities of more expensive drugs. another problem is the poor-quality drugs, which are produced at a lower cost and sold at more competitive prices. in addition, medical providers can purchase these drugs at favorable highly priced discounts. drug producers and medical provi

22、ders may take advantage of the patients lack of knowledge to increase their profits. this explains why competition has failed to increase the quality of drugs. sampling inspections showed that 15% were poor-quality drugs 5.there have been several publications addressing the issue that pharmacoeconom

23、ic evaluation should be conducted for drugs to formulate the national essential drug list, hospital formularies and clinical guidelines, which can be consulted by doctors to facilitate the rational use of drug 6-8. meanwhile, rameckers 9 pointed out that patients can choose cost-effective drugs acco

24、rding to the evaluation outcome to decrease the misuse of pharmaceuticals.1.3 requirements of pharmaceutical industriesin recent years, with the development of china and its entrance to wto, pharmaceutical industries are facing global competitions. the intensified commercial environment can be indic

25、ated by () increasing numbers of enterprises merges and acquisitions; () occupying a greater market share by a small number of large companies; () increasing numbers of enterprises to implement complementary advantages; and () enduring greater competitive pressure for enterprises high drug price for

26、 the enhanced consumers negotiation capacity. then, what should pharmaceutical industries do to survive in such circumstances?then, pharmacoeconomics should be introduced into the pharmaceutical industries to inform decision making for stakeholders, both internally and externally, from which to rein

27、force the competitive strength. for external stakeholders, the pharmaceutical industry can use the evaluation outcome to inform decision-making about pricing, reimbursement, clinical guidelines and hospital formularies 10. for internal stakeholders, pharmacoeconomics can help resource allocation dec

28、isions, which means it can help the manufacturers develop more efficient products in more efficient ways.in a word, what we have discussed above can be summarized by three important advantages of () product differentiation; () economics of scale; and () pursuing comparison superiority. pharmacoecono

29、mic evaluation can not make a bad drug good, what it can do is to enhance the drug developers understanding of its characteristics. decision-making, in light of this information, is likely to be better with than without it.2 current issues2.1 insufficient expertsthe biggest obstacle to hinder suffic

30、ient utilization of pharmacoeconomics is the lack of experts. a study conducted by chen et al. 11 showed that from 1995 to 2002, almost 87.70% pharmacoeconomic studies were conducted by doctors (10.30%), pharmacists (29.30%) and medical technologists (48.10%). so the studies stay at a low level for

31、a lack of systemic comprehension of the basic theories and methods of pharmacoeconomics 12, for example () no standardized course and normal training plans for pharmacoeconomics; () no sufficient teachers with adequate pharmacoeconomic knowledge and experiences; and () no standardized teaching mater

32、ial of pharmacoeconomics.2.2 influence of pharmacoeconomicsanother issue is the influence of pharmacoeconomics. two factors will influence the optimal use of pharmacoeconomics: () the power of the pharmacoeconomist achieving change within decision makers; and () the perceived impact of evaluation ou

33、tcomes at all levels of decision-making. the first factor is an information issue. a study showed that 85.90% decision makers regarded the difficulty of the transformation of evaluation outcom to specific recommendations restrained the utilization and development of pharmacoeconomics 13. decision ma

34、kers may fear to add time and cost to pharmacoeconomics and be uncomfortable with activities outside the traditional decision-making procedure. the lack of advocates at the senior management level will make the sufficient use of pharmacoeconomics more difficult.the second factor as an implication is

35、sue is also very important. how much can pharmacoeconomics influence doctors prescriptions, the optimal reimburement of pharmaceuticals by the government or the consumers behaviors will decide whether or not it can be in good use in china 14.2.3 lack of guidelinesfinally, the lack of guidelines of p

36、harmacoeconomic evaluation is the vital hurdle for the development of pharmacoeconomics. the outcome of economic evaluation can not be compared with each other without guidelines for different perspectives. a study conducted by chen et al. 11 showed that among the 351 references collected from 1993

37、to 2003, only 7.4% could be classified into the scope from the societal perspective. so the reliability, transparency and accuracy can not be warranted, and the repeatability is impossible. therefore, the utilization of pharmacoeconomics will be restrained due to the insufficient quality of research

38、es.3 conclusionshealth care reform has been conducted in china for many years. the most important goal of health care reform is to achieve the greatest possible improvement in the health of the population with a given amount of resources. several aspects may enforce the potential utilization of phar

39、macoeconomics, including: () establishment of national essential medicine policy; () enlargement of health-insurance coverage.national essential medicine policy as one of the key contents of health care reform can warrant the procurability and rational use of essential medicine. essential medicine l

40、ist is the core of national essential medicine policy, and needs scientific method to select essential medicines. under the circumstances of limited health resources, pharmacoeconomics can provide evidences to ensure the safety and economic of essential medicines. meanwhile, the performance of natio

41、nal essential medicine policy needs clinical guidelines and hospital formularies, which also can be informed by pharmacoeconomics.in china, health service expenditure holds about 5% of gdp, but health-insurance coverage is only 10%. therefore, we have to enlarge the health-insurance coverage. to do

42、this, two aspects should be considered, including: () to restrain fast growth of medical cost; () to ensure the accessibility and fairness of basic medical assurance. pharmacoeconomics provides objective standardization for the comparison of drugs, and the reference price and reimbursement can be se

43、t based on pharmacoeconomic evaluation, through which to improve health resources utilization efficiency.no matter what, pharmacoeconomics should be initiated early and can play an important role in helping the decision makers at all levels reach the optimal decision making and maximize the use of t

44、he limited health resources in china, such as pricing the new drugs, reimbursement, clinical guidelines and formulary decisions. however, some efforts, such as the cultivation of talents, establishment of pharmacoeconomic evaluation guidelines, should be made to enhance the continual development and

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