Co-Payments Depress Medicine Spending

BMI View: The deterioration of the Spanish economy and the government's implementation of increasingly aggressive fiscal austerity policies that focus on cost containment in the healthcare sector will lead to yearly declines in public pharmaceutical spending until at least 2016. Our view is supported by the success of previous government measures, including the steep decline in state spending on medicines and the drop in the average expenditure per prescription following the implementation of Royal Decree Laws 4 and 8/2010 and Royal Decree Law 9/2011.


Year-on-year monthly public pharmaceutical expenditure data published by industry association Farmaindustria highlight the Spanish government's continued success in containing pharmaceutical expenditure:

  • In the first six months of 2012, government spending on prescription medicines reached a value of EUR5.47bn (US$7.04bn), a 4.71% drop from the EUR5.75bn (US$7.41bn) spent in H111 and a 15.0% drop from the EUR6.44bn (US$8.29bn) spent in the first six months of 2010.

  • In the first six months of 2012, the average expenditure per prescription reached a value of EUR10.80 (US$13.91), a 6.51% drop from per prescription expenditure of EUR11.55 (US$14.87) in H111 and an 18.9% drop from per prescription expenditure of EUR13.33 (US$17.16) in H110.

Hit By Reforms
Monthly Prescription spending Data


It is BMI's view that the state's approval of Royal Decree Law 16/2012 in April will depress public spending on medicines in 2012 further. According to Minister of Health Ana Mato, the law contains measures that are necessary to address the EUR16bn (US$21bn) deficit in the healthcare system, including the de-reimbursement of medicines, enforcing the consumption of generic medicines and an increase in medicine co-payments.

Highlighting the impact of patients having to pay a higher percentage of their co-payments since July 1 and the de-reimbursement of medicines for the treatment of minor symptoms, in July 2012 public pharmaceutical expenditure experienced a year-on-year (y-o-y) drop of 23.9% (EUR702.9mn, US$903.9mn), resulting from a dip in the number of prescriptions (-14.1%) and a fall in the average cost of prescriptions (-11.4%). We note that in June, public pharmaceutical expenditure experienced a y-o-y increase of 3.2% (EUR980.5mn, US$1.26bn), as a result of a substantial increase in the number of prescriptions (10.1%) because patients stocked-up on medicines prior to the new co-payment system being introduced.

BMI's Spanish Pharmaceutical Market Forecast

In 2011, total pharmaceutical expenditure in Spain reached EUR20.15bn (US$28.01bn) and in 2012 we forecast the market will experience a 9.0% decline, valuing it at EUR18.34bn (US$23.30bn), pushed by a double-digit decline in public expenditure on medicines. We forecast that between 2011 and 2016, the market will experience compound annual growth rates of -7.82% in local currency terms and -10.49% in US dollar terms, falling to a value of EUR13.41 (US$16.09bn) by 2016.

Monthly Prescription spending Data
This article is tagged to:
Sector: Pharmaceuticals & Healthcare
Geography: Spain

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