Expenditure control policies

Rovira, J. (1996), Are national drug expenditure control policies compatible witha single European market , PharmacoEconomics, 10 (supplement 2), 4-13. 

Our survey of the activities of the Government, industry and voluntary bodies in the control of pollution discloses several issues which need further enquiry. The first and most difficult of these is how to balance the considerations which determine the levels of public and private expenditure on pollution control. Some forms of pollution bear more heavily on society than others some forms are cheaper than others to control and the public are more willing to pay for some forms of pollution control than for others. There are also short and long-term considerations in the short-term the incidence of pollution control on individual industries or categories of labor may be heavy but. . . what may appear to be the cheapest policy in the short-term may prove in the long-term to have been a false economy. 

Co-payment is an instrument that should not be used on its own. Neither efficiency in drag use nor equity nor the control of pharmaceutical expenditure can rest solely on co-payment. Its effectiveness is reinforced when it is combined with other instruments and incentives. In fact, all European countries combine, in different doses and proportions, multiple instruments that influence the behaviour of the industry, prescribes and patients. It is sufficient to recall that pharmaceutical expenditure is the product of price by quantity, and to consider the enormous international variability of drag prices,35 in order to understand the limitations of co-payment regulation in comparison with other policies that influence prices. Policies aimed at price control can be as effective as co-payment - or more so - for purposes of cost containment. 

Sir Richard Clarke to Sir Leslie Rowan, 21 Jan. 1965, and Clarke to Sir William Armstrong, Insight on defence costs , n.d., CLRK 1/3/4/1, Churchill College, Cambridge. In addition to The Economics of Defense in the Nuclear Age (Cambridge, Mass. Harvard University Press, 1960), Clarke also recommended McKean s useful essay , Cost-benefit analysis and British defence policy , in Alan Peacock and D.J. Robertson (eds.). Public Expenditure Appraisal and Control (Edinburgh Oliver and Boyd, 1963), pp. 17-35. 

The second reform relates to the control of medical expenses, generic policy, and the example of a number of other countries that encourage prescribers, pharmacists and consumers to limit costs and expenditures in order to release resources to finance new therapies. 

The Swiss welfare state can be described as a multi-tiered welfare state. The bulk of social expenditure is controlled by the federal level and assigned to core social programmes such as old age and invalidity pension and unemployment insurance. The Cantons and the municipalities, however, have kept substantial powers in some important fields of social policy, including family policy, and - most importantly as far as activation is concerned - social assistance (see Obinger 1998 Armingeon et al. 2002). 

G. Brenner, Dmg policy and control of drng expenditures in Germany, report prepared for the concerted action. Network for setting an evaluation team of control of drug expenditure in Europe, ElASM, Brussel, 1995. 

African governments are all grappling with the issue of high medicine prices. Coupled with the increasing momentum for developing local pharmaceutical industries, the issue of medicine prices and how to contain them will come into sharp focus for policy makers. African policy makers are also acutely aware of measures employed by other countries around the world to contain runaway health care costs, and specifically pharmaceutical expenditure. Although price controls are important policy instruments, they are very controversial. The South African experience with pharmaceutical price controls may therefore be a useful case study to inform other African coimtries interventions. 

---