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Medicaid expenditures ($ billions) for outpatient prescription drugs

Medicaid expenditures ($ billions) for outpatient prescription drugs. Spend doubled in 4 years 1998-2002. And cancer drugs are a key driver to rising costs. US$. In 2003, Medicaid spent $33.7 billion on drugs (19% of national spending for drugs and more than 10% of the Medicaid budget).

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Medicaid expenditures ($ billions) for outpatient prescription drugs

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  1. Medicaid expenditures ($ billions) for outpatient prescription drugs Spend doubled in 4 years 1998-2002 And cancer drugs are a key driver to rising costs US$ In 2003, Medicaid spent $33.7 billion on drugs (19% of national spending for drugs and more than 10% of the Medicaid budget)

  2. Confirmation in Europe: Cancer drugs budgets are doubling each 4 years • Costs of anticancer drugs, France: • 2004 = 474 Million Euros • 2008 = 975 Million Euros • Perrin S. Therapeutic decision making in oncology. Hospital Pharmacy Europe. 2010 (Sept/Oct);52:36-37 Spend doubled in 4 years 2004-2008

  3. The world spends more each year for cancer treatment Global spend on oncology drugs: projected for 2010-12 It is a worldwide problem Spend doubled in 4 years 2004-2008 Data: IMS

  4. Cancer drugs are associated with cancer cures! - Timeline of novel cancer drug approval Carin A Uyl-de Groot et al. The Economics of Improved Cancer Survival Rates: Better Outcomes, Higher Costs. Expert Rev Pharmacoeconomics Outcomes Res. 2010;10(3):283-292

  5. Association of novel drugs and cancer mortality Carin A Uyl-de Groot et al. The Economics of Improved Cancer Survival Rates: Better Outcomes, Higher Costs. Expert Rev Pharmacoeconomics Outcomes Res. 2010;10(3):283-292

  6. Cost of cancer drugs by year of approval Cancer drug costs rise 5x faster than other classes of medicine Limits on Medicare's Ability to Control Rising Spending on Cancer Drugs Bach P. N Engl J Med 2009; 360:626-633 Bach P. NEJM. 2009 Feb 7

  7. Cost of treatment for metastatic colon cancer(Schrag D. NEJM. 2004;351:317-319) Cost of standard therapy has risen from $63 / 8 weeks to £30,675 / 8 weeks: 500-fold rise in a decade

  8. Planning for the future: what will happen to costs? What is the driver for increased spending: ageing populations or medical treatment? • USA Office of management and Budget. www.whitehouse.gov/omb medical treatment drives cost inflation far more than the aging population

  9. When will the health expenditure inflation bankrupt the US economy? • 2% point gap: health care affordable only until 2020; • over 75 years, 118.5% of real increase in per capita income devoted to health care (e.g., implausible) • 1% point gap: health care is affordable until 2083; • 54% of real increase in per capita income goes to health care • Michael E. Chernew, Richard A. Hirth, and David M. Cutler Increased Spending On Health Care: Long-Term Implications for The Nation. Health Affairs,September/October 2009, vol. 28, Number 5, pp. 1253- 1255. A small effort to control the growth of expenditures NOW can sustain health service development to 2083! Failure to control expenditure now risks collapse within a decade

  10. What are policy-makers trying to do?

  11. What are policy-makers trying to do? They are doing what doctors want to do! • Protect and improve the health of the population • Assure access to medical care • Achieve efficient use of health care resources

  12. The key to the need to understand economics - Money doesn’t always buy life Life expectancy at birth and health spend 3 fold variation WHO. The World Health Report 2000

  13. The key to the need to understand economics - Money doesn’t always buy health Relationship between spend and health is not always clear Disability-adjusted life expectancy relative to health expenditure per capita in USD in 191 WHO Member States, 1999 WHO. The World Health Report 2000, p43 >10 fold variation US Dollars

  14. Cost constraints in cancer treatment:What can nations do?

  15. by society’s willingness to pay by personal ability to pay We must accept that ration will occurRationing occurs either…. USA - one in five families used up all of their savings paying for cancer treatment Cavallo J. The ASCO Post, February 15, 2011, Volume 2, Issue 3

  16. European countries - with formal cost-effectiveness approval society’s willingness to pay is crucial to understand when setting priorities for a universal tax-funded or insurance based health service The UK is not alone in wanting to control costs through formal state mechanisms Adapted and modified from Zentner et al, 2005

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