Financial analysis of demographic ageing effect on pharmaceutical expenditure of Greece

Abstract

The study aims to take a thorough look at the generating process of Greece’s pharmaceutical expenditure volatility taking into consideration latent cost synthesis differentiations among distinct morbidity areas. It uses frequency-severity models that decompose pharmaceutical demand of prescription drugs (Rxs) into a frequency component (claim frequency counts) and a severity component (claim size). It encompasses linear stochastic forms that treat health expenditure as an age-dependent branching process. The models also comprise the therapeutic category of Rxs as a controllable factor of population morbidity.Motivated by official population statistics which signal the impending serious growth of seniors’ portion within the following decades, globally and particularly in Greece, this dissertation presents estimating results of demographic senescence effects on pharmaceutical expenditure in the long run, through the implementation of projections for distinct therapeutic areas.Up to date literature review does not show any frequency – severity analysis conducted for pharmaceutical care data, neither at an international level, nor at the national level where the integrated information systems were developed with delay in relation to European systems. This study focused on this specific methodology and attempted to fill this knowledge gap in theVIdomain of healthcare by producing not only general estimates for the entire study population but also analytical results for sub-populations with distinct morbidity characteristics. As regards the principal aim of this study, namely, the estimation of the impact of aging on pharmaceutical expenditure, it is suggested that this study can bring substantial contribution to this cognitive field, as it includes the assessment of relevant results for sub-populations with distinct morbidity characteristics, which to the knowledge of the author, is a novel approach according to up to date literature data regarding Greece.According to the results, frequency effects play the key role towards severity ones in the generating process of pharmaceutical claim and loss intensity, this norm does not however apply within each therapeutic category. Pharmaceutical spending associated especially with the reimbursement of drugs for the genito-urinary system, the ophthalmological diseases, the antineoplastic and immunomodulating agents and the respiratory system, is more susceptible to the advent of the demographic aging risk.