Financial sustainability of healthcare and social systems at risk.

Rising prices for medicinal products, particularly for innovative therapies and cancer treatments, are leading to an increase in healthcare expenditure throughout Europe and are placing a considerable burden on national budgets. This is the result of a report by the European Social Insurance Platform (ESIP) and the Medicine Evaluation Committee (MEDEV), which analyses current developments in pharmaceutical expenditure in the European Union (EU) and the European Economic Area (EEA). The survey not only identifies a common trend of rapidly rising pharmaceutical costs, but also sheds light on the underlying factors behind this rise. These include, for example, the market entry of expensive new therapies in the outpatient sector, broadened indications for cost-intensive treatments, demographic ageing and the rise in chronic diseases.

Continuous price increase in inpatient and outpatient care

All participating ESIP and MEDEV members report a continuous increase in pharmaceutical expenditure in the inpatient (hospitals and hospital pharmacies) and outpatient sectors (prescription-only medicines sold in pharmacies). The actual increase partly exceeds the forecasts in the national annual budget. The increase is primarily caused by higher prices and not by the volume of reimbursed medicinal products. Despite demographic trends that would indicate an increase in the number of prescribed medicinal products, the main factor behind the increase in expenditure is the rise in prices, particularly for new, expensive medicinal products.

Oncology products are the biggest driver of expenditure

Oncology products, including orphan indications, are the biggest drivers of expenditure, particularly in hospitals. Other therapeutic areas with significant expenditure are immunology, metabolic diseases, haematology and cardiovascular diseases, with the outpatient sector being particularly affected. The increase is particularly pronounced for orphan drugs used to treat rare diseases: The number of available and reimbursable orphan drugs has increased. In some cases, expenditure on these products has doubled. In France, for example, the average net cost per capita for orphan drugs has risen by 49 per cent over a three-year period (2019-2022). The share of orphan drug expenditure in total pharmaceutical expenditure is also growing.

Strained healthcare budgets due to pharmaceutical costs are not an isolated case

While political discussions focus on reindustrialising Europe and strengthening its competitiveness, national health insurers face a significant challenge in terms of financial sustainability. The data shows that rising pharmaceutical costs do not just affect individual Member States in Europe, but all of them, from Austria to Cyprus and Finland. Sustainable solutions are required to overcome these problems. From the perspective of ESIP and MEDEV - and the DSV as a member of both organisations - innovation in the pharmaceutical market must be evidence-based and affordable, otherwise the financial sustainability of our healthcare and social systems is at stake.

Focus on Germany

In Germany, expenditure on outpatient medicinal products rose by 22 per cent between 2019 and 2023 - from EUR 41 billion to EUR 50 billion. These developments place a considerable burden on healthcare budgets, thus also on the people who finance them. Social security contributors must expect rising costs. This is underpinned by the forecast published by the group of expert forecasters from the statutory health insurance (SHI) on Monday. According to the forecast, health insurance contributions must rise by 0.8 percentage points in order to compensate for a billion-euro deficit in the healthcare system. Employees and employers are facing the biggest increase in contributions to health and long-term care insurance. The reason for this massive increase is the sharp rise in costs for medicinal products, but also for other areas such as hospital-related care or additional expenditure for long-term care insurance.

Dr Pfeiffer, Chair of the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband), puts it in a nutshell in a press release: "The healthcare system can only function in the long term if it is in balance in medical, patient care and economic terms. Anything else is no longer sustainable for the social security contributors and will not benefit patients in the long term."