Drugs still account for major share of healthcare budgets

Related tags Health care Medicine Obesity

Spending on health and healthcare in most developed countries has
risen dramatically over the past five years, according to a new
report from think-tank the Organisation for Economic Co-operation
and Development (OECD).

But the figures underline the large variation between government spending on pharmaceuticals in comparison to prevention and public health.

While populations around the world turn increasingly to self-medication and foods that can protect them from disease, governments are still spending most of their healthcare budgets on pharmaceuticals.

Combined with lower economic growth, the increase in health spending has driven the share of health expenditure as a percentage of GDP up from an average 7.8 per cent in 1997 to 8.5 per cent in 2002, shows the report based on statistics on health and health systems from the OECD's 30 member countries.

This is in sharp contrast to the period 1992 - 1997, when the share of GDP spent on health remained almost unchanged.

OECD Health Data​ 2004 shows that US health expenditure grew 2.3 times faster than GDP, rising from to 13 per cent in 1997 to 14.6 per cent in 2002. Across other OECD countries, health expenditure outpaced economic growth by 1.7 times.

This growth in health expenditure was, in part, a deliberate policy in some countries, such as the United Kingdom and Canada, which realised that cost containment during the mid-1990s had strained their healthcare systems.

But rapid advances in medical technologies, population ageing and rising public expectations were largely responsible for the health spending growth, which was particularly notable in the area of pharmaceuticals.

Between 1992 and 2002, spending on pharmaceuticals grew, on average, 1.3 times faster per year than total health expenditure, rising to account for between 9 and 37 per cent of total health spending in OECD countries in 2002.

In spite of a growing awareness of the importance of prevention and public health however, OECD countries spent on average only 2.8 per cent of total health expenditure on organised public and private prevention programmes.

This contrasts sharply with the rise in the number of overweight and obese people in all OECD countries over the past two decades - in many of the countries surveyed more than 50 per cent of adults are now classified as being overweight or obese.

Obesity is a known risk factor for diseases such as diabetes, hypertension, cardiovascular diseases, respiratory problems (asthma) and musculoskeletal diseases (arthritis). The United States has the highest rate of adults considered as overweight or obese (with 34 per cent of adults being overweight and another 31 per cent defined as obese in 1999-2000), followed by Mexico, the United Kingdom and Australia.

The findings would appear to suggest that health products manufacturers are unlikely to gain much support from government public health campaigns.

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