Unlike
more developed markets, lack of access to healthcare
for large segments of the population is a major problem
in several Latin American countries, most notably Peru,
Venezuela and Colombia, according to
IMS Market Prognosis Latin America.
In Colombia,
for example, official figures estimate that 45% of the
population is not included in current healthcare
schemes, although the real figure could be higher. In countries
such as Mexico, where access is less of a problem, public
sector healthcare facilities suffer from overcrowding.
Healthcare is mainly provided through the public hospital
system in most countries in the region, with little in
the way of a primary care infrastructure or general practitioner ‘gatekeeper’ system.
The private
sector is poorly developed in most countries in the region
and the proportion of the population covered
by private insurance, which was already low, has declined
because of the parlous state of the economies. In Argentina,
private payers now account for only about 5% of healthcare
provision and less than 10% of the Mexican population has
private cover. While 24% of Brazilians have some form of
private cover, they tend to use public facilities, especially
for more complex and expensive procedures. In Chile, the
state system co-exists with private insurance funds, but
the latter are increasingly ‘cherry-picking’ their patients.
The private insurance system in Argentina is reasonably
well established, with about 25% of the population having
some form of private cover, although the current government
does not appear to see much of a role for the private sector
in a reformed healthcare system.
The increasing role played by the public sector in Latin
American countries will have important implications for
the pharmaceutical industry, in view of the inevitability
of much tougher cost containment in this sector - through
the use of:
- essential drug lists
- controls on prescribing
- encouragement of generics
- and rationalisation of procurement etc.
On the other hand, expanded access to healthcare will,
in the longer term, boost uptake of medicines.
Healthcare spending
Local governments are continuously looking to increase
healthcare resources in Latin America in an attempt to
provide universal access to healthcare services.
Healthcare spending
as a proportion of gross domestic product (GDP) varies – from
a low of just 1.8% in Venezuela to a reported 8-9% in
Colombia. Venezuela plans to increase
its healthcare spending to 4.5% of GDP, but the time scale
for this is vague and there are no real indications as
to where the extra funding will come from.
Healthcare spending as percentage of
GDP 2002
|
Argentina |
8.0% |
|
Brazil |
5.2% |
|
Chile |
6.0% |
|
Colombia |
8-9% |
|
Mexico |
5.5% |
|
Peru |
4.4% |
|
Venezuela |
1.8% |
Source: IMS
In the second largest market, Brazil,
per capita spending on GDP is about US$50 per annum,
significantly less than the $500 recommended by the World
Health Organisation. In Chile, on the other hand, a figure
of $200 per capita is given by the Ministry of Health.
Healthcare policy
Healthcare reform is on the political agenda of all seven
of these countries, with the basic aims of expanding access
and controlling costs. Several common policy directions
can be discerned, notably:
- Giving public hospitals more financial and administrative
autonomy, as planned in Argentina and Chile. This has
already happened in Colombia, where hospitals are run
mainly as commercial enterprises, although hospital debt
remains a major problem
- Decentralisation,
or devolution of responsibility for healthcare provision,
is the main plank of the Peruvian
government’s reform programme. It is on the political
agenda in Mexico and will be further pursued in Brazil
and Venezuela; in the latter, mainly targeting public
hospitals
- Developing and strengthening primary care, which is
a high priority target in Argentina, Venezuela and Peru
- Measures to encourage generic use
The scope of reform programmes varies considerably among
the seven countries covered by the IMS Market Prognosis
reports. Among the most far-reaching are those in Chile
and Mexico. In Chile, there are plans for a new system
with a guaranteed level of treatment irrespective of income,
although finding the funds to support this and overcoming
problems such as the lack of infrastructure and necessary
capacity in the public sector will be major challenges.
In Mexico, more ambitious elements of the reform programme,
such as introducing competition between payers and providers
and reform of the health insurance system, shelved in the
run-up to the 2000 elections, are now beginning to be resurrected.
Realistically, major healthcare reform programmes are
unlikely to have much of an effect in any of the countries
over the next five years, largely because of economic difficulties.
In Argentina and Venezuela, the most urgent priority will
be to prevent complete collapse of their healthcare systems.
Political as well as economic instability in these two
countries will be a significant barrier to healthcare reform,
while in Colombia the civil war will continue to present
a major obstacle to expansion of healthcare coverage. In
other countries, such as Peru, Mexico and Brazil, the lack
of a government majority will frustrate attempts to push
through changes to healthcare systems.
What is certain is that, in the absence of major reform,
cost containment will intensify and pharmaceutical spending
will be a prime target.
Attempts to ease pressure on health budgets
In common with
governments elsewhere, those in Latin America will increasingly
focus on pharmaceutical spending in order
to curb healthcare costs. As already noted, switching the
emphasis to generics is a common theme in cost-containment
programmes. In public hospitals in Brazil, doctors are
obliged to prescribe generically and Argentina’s Congress
recently passed legislation to this effect. Also in Argentina,
two national formularies, one of which lists drugs by generic
name, have recently been published with the aim of influencing
hospitals and the social insurance funds.
Healthcare reform
measures in Chile would result in more treatment protocols
and prescribing guidelines, but concerted
effort to control doctors’ prescribing habits does not
appear to be a government priority. In Venezuela, the new
Medicines Law contains several measures aimed at promoting
generics, including doctors having to include the generic
name on prescriptions as well as the brand, but this looks
unlikely to impinge too much on physician prescribing freedom.
A strategy of
shifting more healthcare costs onto patients will be
used in some Latin American markets to ease pressure
on health budgets, although the potential for this is fairly
limited given that many treatments are already paid for
out of pocket. Argentina’s health system is in such dire
straits that it has little choice, with reimbursement by
the social insurance funds having already fallen from 70%
to 50%. Charges are being introduced for services offered
by the public sector in Colombia, including a range of
surgical procedures, radiology, nuclear magnetic resonance
and some laboratory tests, which could discourage people
from having diagnostic testing carried out, with subsequent
implications for use of medicines.
This article was written by Eleonora Sandullo, a Project
Manager for IMS Market Prognosis. For more information
on IMS' Forecasting portfolio, please contact Cristina
Cucinotta or
call +44 207 393 5254. |
