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Pedro Pita Barros reviews pharmaceutical policies adopted by health care systems in European (OECD) countries. He notes that cost-sharing for pharmaceuticals is higher than cost-sharing for other services. However, although pharmaceutical cost-sharing is pervasive across the European Union, concerns over equity have led most countries to adopt sliding fee schedules and even outright exemptions from copayments for vulnerable populations such as the elderly and low income households. The most common form of price regulation in these countries is reference pricing, either “external” (pegging pharmaceutical payments to lowest prices in a group of countries) or “internal” (pegging pharmaceutical prices to the lowest price within a therapeutic class), as well as outright administrative price controls. In his theoretical results, Barros shows that reference pricing lowers cost to consumers the most, followed by administrative price lists, while the pure coinsurance system yields the higher total cost. To foster innovation, Barros proposes adoption of innovative payment schemes based on supply-side risk sharing whereby payments to drug manufacturers are tied to treatment results and patient outcomes. Such schemes are akin to pay-for performance methods used to reimburse physicians in certain managed care settings in the United States.

Purpose – Pharmaceutical expenditures have an important role in Europe. The attempts to control expenditure have used a wide range of policy measures. We reviewed the main measures adopted by the European Union countries, especially in countries where governments are the largest third-party payers.

Methodology – To complement a literature review on the topic, data was gathered from national reviews of health systems and direct inquiries to several government bodies.

Findings – Almost all countries regulate prices of pharmaceutical products. Popular policy measures include international referencing to set prices (using as benchmark countries that have set lower prices), internal reference pricing systems to promote price competition in domestic markets, and positive lists for reimbursement to promote consumption of generics (including in some cases substitution by pharmacists of drugs prescribed by physicians). Despite the wide range of policy measures, it is not possible to identify a “silver bullet” to control pharmaceutical expenditures. We also identified two main policy challenges: policy coordination among countries within the European Union to maintain incentives for R&D at the global level, and the development of new relationships with the pharmaceutical industry; namely, the so-called risk-sharing agreements between the pharmaceutical industry and governments/regulators (or large third-party payers).

The provision of universal health care by the Portuguese NHS depends on the allocated government budget to health. Several reforms have been implemented over the last decades to improve access while ensuring the financial sustainability of the health care system. However, a practical and useable definition of public health sustainability is hard to find. We show that under two alternative definitions – both related to fiscal space and compliance with sound public finances – public health spending increase is limited. Our analysis indicates that public health spending growth levels below 3% can be financially sustainable.

Taking into account that financial sustainability is a function of economic growth and will depend on the level of control of other public spending, our forecast for long-run health spending growth is compatible with the financial sustainability targets defined.

Health outcomes are often described according to two dimensions: quality of life and quantity of life. We analyze the measurement of inequality of health distributions referring to these two dimensions. Our analysis relies on a novel treatment of the quality-of-life dimension, which might not have a standard mathematical structure. We single out two families of (absolute and relative) multidimensional health inequality indices, inspired by the classical normative approach to income inequality measurement. We also discuss how to extend the analysis to deal with the related problem of health deprivation measurement in this setting.