ABSTRACT
Medicines play a vital role in the delivery of quality health care. The world pharmaceutical market was worth an estimated €651,500 million at ex-factory prices in 2014 (European Federation of Pharmaceutical Industries and Associations, 2015). The North American market (the US and Canada) comprised 44.5 percent and Europe 25.3 percent of the market share (European Federation of Pharmaceutical Industries and Associations, 2015). According to a recent report by OECD (2015) pharmaceuticals (pharmaceutical expenditure covers prescription medicines and medicines procured over the counter, i.e. not requiring a prescription) comprise the third largest health care expenditure item after inpatient and outpatient care, representing approximately 1.4 percent of GDP across OECD countries (OECD, 2015, p. 180). In year 2013 such costs were estimated at 17 percent of the total health care budget. This estimate did not take into account the expenditure of medicines in hospitals in which case if included would amount to an estimated 20 percent of total health care budget across OECD countries. Wide variations in retail pharmaceutical spending per capita across OECD countries reflect differences in volume, consumption patterns and prices. It appears that in 2013, the US spent double the average – US$ PPP 1,026 per capita on pharmaceuticals, OECD average stood at US$ PPP 515 with Denmark spending the least – US$ PPP 240 (OECD, 2015, p. 179). When it comes to public expenditure on pharmaceuticals across OECD countries, expenditure dropped on average by 3.2 percent between 2009–2013 (OECD, 2015, p. 180). This comes in response to various policy measures that have sought to shift the burden of expenditure from the public purse to private payers.
