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11 min read 7th November 2011

Forecasting the UK Medicines Bill to 2014

At the 13th Annual Conference of the Institute of Healthcare Management, Scotland, Jon Sussex discussed OHE’s model for projecting the UK NHS medicines bill to 2014 and a range of projections from it. At the 13th Annual Conference of the…

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At the 13th Annual Conference of the Institute of Healthcare Management, Scotland, Jon Sussex discussed OHE’s model for projecting the UK NHS medicines bill to 2014 and a range of projections from it.

At the 13th Annual Conference of the Institute of Healthcare Management, Scotland, Jon Sussex discussed OHE’s model for projecting the UK NHS medicines bill to 2014 and a range of projections from it. To put medicines spending in context, Jon noted that approximately 14% of NHS operating costs in Scotland for 2009/10 were for medicines, compared to 70% for staff. Average annual growth in the medicines bill in Scotland for 2005/06-2009/10 had been 3.9% per year on average, driven mainly by the 11.2% annual growth in the hospital and community care sector medicines bill; the primary care medicines bill had grown at only 1.5% per year on average.

For the UK as a whole, OHE has produced a range of projections for the Association of the British Pharmaceutical Industry. To arrive at these estimates, OHE has developed a bottom-up model that includes more than just projections of observable trends. The approach specifically incorporates the impacts of new medicine launches and of losses of exclusivity for existing medicines. Additionally, for some sensitive therapeutic areas, expert opinion has been sought about how best to calculate change over the next few years.

OHE’s projections suggest that the total UK NHS medicines bill will continue to increase to 2014, but is very likely to do so more slowly than before: 2.2% – 4.8% per year, compared to the 2005-09 growth rate of 5.3%. Primary care medicines expenditures in the UK NHS are expected to grow by something in the range 0.2% – 2.7% annually, and secondary care by 5.7% – 8.3%. For branded medicines only, an average yearly growth rate of 0.2% – 3.2% a year is projected, with primary care shrinking by 3.2% – 0.2% per year and secondary care increasing by 5.3% – 8.2% per year. OHE presents ranges rather than attempting to pinpoint a specific percentage rate of change, Jon explained, because figures that are ‘approximately right, rather than precisely wrong’ provide a more realistic backdrop for policy discussions.

Download: Sussex, J. (2011) Looking ahead: Forecasting the medicines bill in a challenging climate. Paper presented at the IHM 13th Annual Conference and Exhibition. Glasgow. 4-5 October 2011.

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