Healthy Skepticism Library item: 1275

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Publication type: news

Argentia's Largest Health System Pioneers Innovative Approach To Lower Drug Costs
Pan American Health Organisation 2003 Jun 5

Full text:

Argentina is the testing ground for what is believed to be the world’s first experiment of its kind to cope with rising drugs costs while it seeks to improve services to senior citizens and disabled persons, two of the country’s most vulnerable population groups.

The National Institute of Social Services for Retirees and Pensioners (NISSRP) is Argentina’s single largest health system. Among other services, it provides outpatient drug coverage and cancer treatment medications to its more than 3.3 million beneficiaries, which include the retired population, pensioners with a disability such as a physical or mental disorder, war veterans, and the dependents of these beneficiaries.

As rising prices for prescription medications began to take their toll on both the NISSRP and its beneficiaries, through the latter’s copayment obligations, the Institute turned its attention to the country’s drug companies. Aware of the economic clout of this group, in 1997, the Institute approached the pharmaceutical industry and successfully negotiated an agreement with a consortium of more than 200 enterprises to transfer to them the risk of increasing pharmaceutical costs in exchange for a fixed monthly payment by the NISSRP.

Argentina is believed to be the first nation in the world to ever test this type of risk contract as a way to control drug expenditures. The preliminary results of this experiment-a comparative analysis of NISSRP beneficiaries’ consumption trends in 1996, before the agreement went into effect, with those for 1999, two years following the arrangement’s approval by the government, are featured in the April 2003 of the Pan American Journal of Public Health produced by the Pan American Health Organization PAHO).

The study was conducted by a multidisciplary team of eight researchers from the University of Buenos Aires’s School of Medicine and the NISSRP. The Journal article describes the study’s design and principal findings, followed by a comprehensive discussion of the theoretical and practical advantages and pitfalls emanating from the agreement. The authors caution that while an initiative of this sort holds promise, it also “requires extensive mechanisms for control, follow-up, and updating” of approved medications, and “it also risks making nonrational drug prescribing the accepted rule.” The findings, while based on a relatively limited one-year time frame, nonetheless provide important insight into a dilemma governments around the world current face: how to contain health care costs while at the same time providing quality services to the population segments that most need them.