IPHA Healthcare Facts and Figures 2005

Healthcare

Facts and Figures

04-05

Healthcare Facts & Figures

HEALTHCARE EXPENDITUREPublic Expenditure on Health 1997-2004

Healthcare Expenditure as a % of GDP 2002

Non Capital Health Expenditure 2003

Employment in the Public Health Services 2002

Weekly Expenditure on Medicines versus Other Household Expenditure

Growth in State Expenditure on Medicines 1997-2003

Pharmaceutical Expenditure as a % of Healthcare Expenditure

in Selected Countries

POPULATION AND LIFE EXPECTANCY STATISTICS Irish Population Projections 1996/2031

Life Expectancy in the European Union

Self-Perceived Health by Country

Principal Causes of Death in Ireland 2003

COMMUNITY DRUG SCHEMESCommunity Medical Schemes Expenditure 2003

GMS Scheme Expenditure 1997-2003

The Ageing of the GMS 1993-2003

Drugs Payment Scheme Expenditure 1997-2003

Long Term Illness Scheme Expenditure 1997-2003

High Tech Scheme Expenditure 1997-2003

1

3456789

10

1112131415

16171819202122

PHARMACEUTICAL MARKET STATISTICSEmployment in the Pharmaceutical Industry in Ireland 1988-2004

World Trade in Pharmaceuticals 2002

European Pharmaceutical Market by Main Distribution Channels 2002

Pharmaceutical Expenditure per Capita in Western Europe 2002

Sale of Medicines by Therapeutic Class 2003

Self Medication Market in Ireland 2003

OTC Medicines as a % of the total Pharmaceutical Market 2003

RESEARCH AND DEVELOPMENTThe Life Cycle of Medicines

Cost of developing a new Medicine

Medicines in Development for Children

Drop in Death Rates for Diseases Treated with Medicines 1965-1996

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 4 / 2 0 0 5

2

2324252627282930

3132333434

Healthcare Expenditure

The last few years have seen dramatic increases in health expenditure asthe State has sought to catch up following years of under investment.However, as noted in the Health Strategy “Quality and Fairness – A HealthSystem for You”, much remains to be done.

• Public expenditure on healthcare has more than trebled in the period 1996 to 2004.

• Irish healthcare expenditure has historically been low relative to other WesternEuropean States; in 2002 Irish healthcare expenditure at 7.3% of GDP remainedamongst the lowest in the EU.

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

• The numbers employed in the health services increased by over 36% during the tenyears through to the end of the year 2000.

• State expenditure on medicines has increased in tandem with the increase in publicexpenditure on health. Medicines account for just 11.5% of non-capital healthexpenditure – a small but vital component.

• Expenditure on pharmaceuticals, as a percentage of total healthcare expenditure,remains low; Ireland spends nearly a third less than the European average onmedicines.

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 1997-2004

0

2

4

6

8

10

12

20042003200220012000199919981997

€

Billion

3.74.1

4.9

5.7

7.2

8.4

9.1

10.1

Source: Department of Health and Children Statistics

Healthcare Expenditure as a % of GDP 2002

5

% of GDP0 2 4 6 8 10 12

UK

Luxembourg

Ireland

Finland

Spain

Austria

European Average

Italy

Denmark

Belgium

Netherlands

Sweden

Portugal

Greece

France

Germany

6.2

7.3

7.3

7.6

7.7

7.7

8.4

8.5

8.8

9.1

9.1

9.2

9.3

9.5

9.7

10.9

Source: OECD Health Data 2004, 1st EditionEuropean Average - EFPIA

Non-Capital Health Expenditure 2003

6


Hospitals 46.1%

Community Welfare/Protection 11.9%

Disability 12.6%

Medicines 11.5%

Mental Health 6.9%

Community Health Services 6.6%

General Support 4.4%

(excluding medicines)

Source: Department of Health and Children StatisticsGMS (Payments) Board Annual Report 2003

7

Employment in the Public Health Services 2002

Source: Department of Health and Children

NUMBER % OF TOTAL

Management/Administration 15,690 16.4

Medical/Dental 6,775 7.0

Nursing 33,395 35.0

Health and Social Care Professionals 12,577 13.1

General Support 13,729 14.4

Other Patient and Client Care 13,513 14.1

TOTAL 95,679 100

Weekly Expenditure on Medicines versus OtherHousehold Expenditure

8


CrispsCDs

Prescription Medicines Other Medicines Cakes and Buns

Bus faresHairdressing

CosmeticsChip Shop Purchases

Newspapers Betting/Lottery

Sweets/Chocolate Tobacco

Telephone Petrol

Alcohol

5 10 15 20 25 30 35

1.471.43

1.962.25

2.723.293.403.54

4.064.394.665.05

12.4613.24

17.1331.64

€

Source: Central Statistics Office Household Budget Survey 1999/2000

Growth in State Expenditure on Medicines1997-2003

9

Source: GMS Annual Reports from 1997-2003. 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

2003200220012000199919981997

307

360

411

504

630

769

898

€

Million

Pharmaceutical Expenditure as a % of HealthcareExpenditure in Selected Countries 2002

10


%0 5 10 15 20 25

ItalySpain

FranceCanada Austria Finland

UKGreece

GermanyEuropean Average

SwedenUSA

LuxembourgIreland

NetherlandsSwitzerland

Denmark

22.421.5

20.816.6

16.115.915.8

15.314.514.5

13.112.8

11.611.0

10.410.3

9.2

Source: OECD Health Data 2004 1st EditionEuropean Average – An EFPIA calculationUK data relates to 1997

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.

• Between 1996 and 2002 life expectancy improved by 2.1 years for men and 1.8 years forwomen. A baby boy born in Ireland in 2002 can expect to live 75.1 years, animprovement of 2.8 years over the last decade.

• The life expectancy of those aged over 65 has improved significantly in recent years butstill remains low, relative to our Western European neighbours.

• The percentage of elderly people in the population is set to increase by over 1/3 by 2020.This will have significant implications for the healthcare budget in the years ahead. Forexample the elderly constitute 11.3% of the Irish population, yet receive 47% of allprescribed medicines on the GMS. *

• 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 in 2004 is of a person aged under 65 yearsold.

• Nearly 50% of Irish people perceive themselves to have very good health. This in acountry where, for example, one in every eight people is obese and every second personis overweight. Another worrying statistic is that between 1989 and 1999, Ireland had thehighest increase in alcohol consumption amongst EU countries.

*National Medicines Information Centre Therapeutic Bulletin Vol. 6 No. 1 2000“ Prescribing in the Elderly”.

11

Irish Population Projections

12

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

050100150200 50

Thousands of Persons

MalesFemales

100 150 200 050100150200 50

Thousands of Persons

MalesFemales

100 150 200

85+80-8575-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-1405-90-4

1996 - 3.6 MILLION 2031 - 4-4.8 MILLION

Source: Central Statistics Office

13

Life Expectancy in the European Union

LIFE EXPECTANCY IN YEARS

At Birth Best Figure Average Figure Irish Figure Lowest Figure

Females 83.1 81.1 80.3 76.0

Males 77.7 74.8 75.1 64.8

At Age 65

Females 20.0 19.6 18.7 16.9

Males 16.9 16.0 15.4 12.5

Source: Central Statistics Office 2004

14

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

Self-Perceived Health by Country (%)

Source: Eurostat Data 2003

VERY GOOD GOOD FAIR BAD VERY BAD

Denmark 40.7 34.6 18.5 4.8 1.4

Germany 8.0 38.8 34.3 14.8 4.1

Greece 53.2 24.0 15.1 6.0 1.6

Spain 18.1 50.7 21.7 8.1 1.4

France 9.3 48.8 33.9 3.9 4.1

Ireland 49.1 32.9 15.3 2.3 0.4

Italy 15.7 44.6 28.3 9.6 1.8

Netherlands 17.2 52.2 22.6 4.2 0.7

Austria 34.3 40.4 18.3 5.6 1.5

Portugal 3.5 44.0 33.1 15.8 3.6

Finland 15.5 45.9 31.7 6.2 0.8

UK 22.2 46.0 22.2 7.3 2.2

15

Principal Causes of Death in Ireland 2003

Source: Central Statistics Office 2004

Circulatory Diseases 38.1%

Cancer 26.2%

Respiratory Diseases 15.4%

Injury and Poisoning 4.7%

Other Causes 15.6%

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

16

Community Drug SchemesExpenditure on the community drug schemes has risen steadily in recentyears.

The factors behind that growth include:

• The development of new treatments, in particular in the areas of preventativemedicine and the long-term treatment of chronic illness. For example, the number ofpatients registered under the High Tech Scheme nearly trebled in the six years from1997.

• The fact that Irish spending on pharmaceuticals is starting from a low base;In 1999 Ireland had the third lowest consumption per capita of medicines in the EU.

• The large scale and ongoing increases in Irish health spending. Health expendituremore than trebled in the period 1996 to 2004.

• The introduction of Government initiatives to improve public health such as thecardiovascular strategy. The prescribing frequency of cardiovascular system medicationhas increased from 3.6 million in 1996 to 7.7 million in 2003 (an increase of 114%).

• The increasing population of the country. The population has increased by over280,000 since 1996 and is currently increasing at an average rate of over 0.5% perannum.

• The increasing availability of medical cards to the elderly. The number of people over65 years old with medical cards increased by over 75,000 (over 25%) in the decadesince 1993.

17

Community Medical Schemes Expenditure 2003

€

million

73104

204

515

0

75

150

225

300

375

450

525

General Medical Services(GMS) Scheme

Drug PaymentScheme

High TechScheme

Long Term IllnessScheme

Source: GMS (Payments) Board Annual Report 2003The GMS figure includes the ingredient cost only and the High Tech figure excludes patient care fees

18


GMS Scheme Expenditure 1997-2003The Scheme provides free medical services to persons who would not otherwise beable, without undue hardship, to afford such services.

179202

231

271

338

433

515

€

Million

0

100

200

300

400

500

600

2003200220012000199919981997

Source: GMS (Payments) Board Annual Reports 1997-2003Figures incude ingredient cost only

19

The Ageing of the GMS 1993-2003While 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 1993-2003

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

PERSONS PERSONS

2003 1,158,000 29.6% 375,000 32.4%

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

1993 1,275,000 35.8% 298,000 23.4%


20

Source: GMS (Payments) Board Annual Reports 1997-2003.The data incorporates the Drug Refund Scheme and Drug Cost Subsidisation Scheme which were replaced by this Scheme in 1999.

Drugs Payment Scheme Expenditure 1997-2003

76

96105

141

178

192204

€

Million

0

25

50

75

100

125

150

175

200

225

2003200220012000199919981997

21

Long Term Illness Scheme Expenditure1997-2003The 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.

Source: GMS (Payments) Board Annual Reports 1997-2003

2529

34

42

52

62

73

€

Million

0

10

20

30

40

50

60

70

80

2003200220012000199919981997

22


High Tech Scheme Expenditure 1997-2003Developments 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.

€

Million

20032002200120001999199819970

20

40

60

80

100

120

2632

40

49

61

80

104

Source: GMS (Payments) Board Annual Reports 1997-2003Figures exclude patient care fees. The number of patients registered under the Scheme has nearly trebled since 1997 from just over 8,000 to over 22,000 in 2003.

23

Pharmaceutical Market Statistics• The pharmaceutical industry makes an important contribution to the Irish

economy, employing 21,000 people and with exports exceeding €13.3 billion,the country is the biggest net exporter of pharmaceuticals in the world.

• The market for pharmaceuticals continues to grow as outlined in the previoussection on the community drug schemes.

• Irish consumption of medicines remains amongst the lowest in WesternEurope. Growth in the Irish market has to be viewed against thisbackground and against the ever-increasing sums being invested to improvepublic health.

• Four therapy areas – the cardiovascular system (22%), the alimentarytract/metabolism (16%), the nervous system (18%) and the respiratorysystem (10%) - make up two-thirds of the total Irish market for prescribedmedication.

• Self-medication is an important element of the total Irish market forpharmaceutical products. The leading areas of the market include analgesics(20%) and cough and cold treatments (16%).

• The Association of the European Self-Medication Industry (AESGP) hasestimated that savings of over €75 million annually could be achieved inIreland if self-medication was practised more widely. The savings could thenbe put to better use elsewhere in the healthcare system.

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

24

No. ofpersonsemployed

0

5000

10000

15000

20000

25000

'03'02'00'98'96'94'92'90'88

52006200

7700

9400

11200

13100

16000

2000021000

Employment in the Pharmaceutical Industry inIreland 1988-2004

Source: IPHA Estimates based on CSO and IDA Ireland Data

25

Source: Global Trade Information Services (DTI)

World Trade in Pharmaceuticals 2002

EXPORTS Stg£ IMPORTS Stg£ BALANCE Stg£

Ireland 9,063 1,072 7,991

France 9,476 5,568 3,908

Switzerland 8,496 4,670 3,826

UK 10,031 7,446 2,585

Sweden 2,917 1,065 1,852

Italy 5,296 4,859 436

Netherlands 4,638 4,358 280

Australia 695 1,733 -1,038

Germany 9,135 10,358 -1,223

Spain 1,881 3,305 -1,424

Japan 1,301 3,078 -1,778

Canada 1,005 2,986 -1,981

USA 8,695 14,309 -5,614


26

European Pharmaceutical Market by MainDistribution Channels 2002

Note: Other channels include dispensing doctors, supermarkets, drugstores and other retail outlets.

Source: EFPIA – The Pharmaceutical Industry in Figures 2004 edition.

TOTAL PHARMACY HOSPITALOTHER

CHANNELS

€ million

Austria 1,885 1,426 459 0

Belgium 2,983 2,521 462 0

Denmark 1,279 955 313 11

Finland 1,444 1,135 309 0

France 19,911 16,311 3,600 0

Germany 21,850 18,628 2,932 290

Greece 2,618 1,992 626 0

Ireland 977 821 140 16

Italy 13,966 11,042 2,924 0

Netherlands 3,194 2,448 458 288

Norway 1,235 1,090 145 0

Portugal 2,510 1,935 575 0

Spain 8,850 6,934 1,916 0

Sweden 2,495 2,242 253 0

Switzerland 2,484 1,380 475 647

United Kingdom 16,499 12,271 3,411 817

TOTAL 104,180 83,131 18,980 2,069

27

Pharmaceutical Expenditure per capita inWestern Europe 2002

Source: OECD Health Data 2004, 1st Edition

239

259

276

278

309

329

354

354

355

358

408

484

570

0 100 200 300 400 500 600US $ PPP

Denmark

Ireland

Netherlands

Greece

Finland

Sweden

Switzerland

Spain

Luxembourg

Austria

Germany

Italy

France


28

Sale of Medicines by Therapeutic Class 2003

Ailmentary Tract & Metabolism 17%

Cardiovascular System 21%

Nervous System 18%

Respiratory System 11%

Others 33%*

Source: GMS (Payments) Board Annual Report 2003. Major therapeutic classification of drugs, medicines and appliances for the GMS/DP/LTI Schemes.

* These include genito urinary system and sex hormones 5%, general anti-infectives for systematic use 5%, musculo-skeletal system 6% and others 17%.

29

Self Medication Market in Ireland 2003

Analgesics 20%

Cough and Cold 16%

Vitamins and Minerals 13%

Digestives & Intestinal Remedies 11%

Skin Treatment 11%

Others 29%

Source: IMS Health*At consumer price level

Total Market €215 million*


30

OTC Medicines as a % of the totalPharmaceutical Market 2003

8.6

9.2

9.9

11.1

11.2

11.2

12.7

13.6

14.2

16.8

20.7

21.7

22.1

%0 5 10 15 20 25

Portugal

Austria

Sweden

Spain

Italy

Finland

Netherlands

Denmark

Belgium

Ireland

Germany

UK

France

Source: AESGP Economic and Legal Framework for Non-Prescription Medcines 2004

Research and Development

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

• Pharmaceutical R&D is risky, lengthy and expensive. On average only one or two of every10,000 promising substances will successfully pass extensive testing in the R&D phase tobe approved as a marketable product.

• Studies have put the cost of developing a new medicine at almost €900 million.

• Only three out of ten marketed medicines produce revenues that match or exceedaverage R&D costs.

• The European pharmaceutical industry employed over 100,000 people in R&D in 2003and spent a total of over €21 billion on such work.

• In this uncertain world the pharmaceutical industry is working with governments todevelop responses to bioterrorist threats such as anthrax, smallpox, plague and otherdiseases. Researchers are also focusing on infectious diseases that affect millions ofpeople all over the world – hepatitis, fungal infections, herpes, influenza, rotavirus, sepsis,sexually transmitted diseases, tuberculosis, urinary tract infections and many more.

• Until the 20th century, about half of all Irish children suffered an early death from childhood illness.

• A child born today can expect to live an average of 30 years longer than a child born acentury ago.

• Thanks to better medicines, eight out of ten children now survive leukaemia and deathrates for all childhood cancers have dropped by over 50% since the early 1970s.

• Pharmaceutical R&D has helped to produce medicines, which have improved lifeexpectancy. According to the World Health Organisation (WHO), there is still noadequate therapy for three quarters of the 2,500 medical conditions currently recognised.Pharmaceutical R&D offers hope that in the future such therapies may be developed.31

The Life Cycle of Medicines

32

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

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

33

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

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

34

Drop in Death Rates for Diseases Treated withPharmaceuticals, 1965-1996Percentage Drop in Age-Adjusted Death Rate

Rheumatic Fever and Heart Disease

Atherosclerosis

Ulcer of Stomach and Duodenum

Ischaemic Heart Disease

Emphysema

Hypertension

83%

74%

72%

62%

57%

21%

Medicines in Development for Children 2004*

9

32

11

15

9

7

11

8

8

37

15

Asthma

Cancer

Cardiovascular Disease

Cystic Fibrosis

Eye Disorders

Genetic Disorders

Infectious Diseases

Psychiatric Disorders

Respiratory Disorders

Vaccines

OtherSource: Pharma 2004* Some medicines are listed in more than one category

Source: PhRMA, 1998

© 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

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