Italy Plans Pharmaceutical Reforms for Baby Boomers

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from AARP Global Network

With countries around the world recovering from the recession, many have resorted to austerity measures to keep their economies afloat. Some also face unprecedented issues due to aging baby boomers, who will require more resources from national healthcare systems.

Italy, the country with Europe's oldest population, is just now enacting sweeping reforms that have cut the costs of healthcare, according to InPharm.com. Some of the spotlight has been on the pharmaceutical industry, where the government has announced there will be 17.156 billion euro worth of cuts in 2011.

One way that the Italian Ministry of Health is strategically planning for baby boomers is by reducing the price of generic drugs by 12.5 percent so that they cost around the same as those in other European countries. The organization also hopes to tighten control on hospital spending.

While some predict that the savings can be contributed to the development of new medications, many others are skeptical of the effectiveness of these initiatives.

"The Italian national health service might be able to save a certain amount on the reimbursement of generics, and this might free up funds for the purchase of more expensive drugs," IHS Global Insight analyst Brendan Melck told the news source. "But, considering the huge debts in the Italian regional healthcare authorities, this would be only a small contribution."

Still, Melck added that the plan may help with this boomer trend because it will encourage doctors to prescribe more affordable generic drugs instead of brand-name alternatives. In fact, the new measures restrict the reimbursement of prescription medication to the cheapest option, the news source reports.

In addition, if pills have not visibly improved a patient after six weeks, the pharmaceutical company will have to pay back 50 percent of the reimbursement cost. This may prove extremely helpful when it comes to finding the best way to aid boomers with chronic conditions, but many in the industry suggest that it will stifle innovation and experimentation.

This pay-for-performance system was initially launched in 2007, but its effects are just starting to emerge. One study found that the new regulations encourage the development of new drugs, because pharmaceutical companies greatly benefit if the medication proves to be beneficial.

Dr. Onofrio Lamanna, the chief medical director of a recent hospital built near Venice, applauds the overall approach, despite some reservations.

"All of the austerity measures are useful and bound to generate substantial benefits for patients, doctors and hospitals," he told the news provider.

Pharmaceutical industries across Europe have been affected by similar austerity measures as countries have tried to create more sustainable models for pharmaceuticals.

In the Netherlands, the aging population seems to be at least partially responsible for significant growth in healthcare spending - in 2009, the total expenditure rose by 7 percent, costing 57.69 billion euro. There is also worry that, as boomers retire, there will be fewer workers to contribute to social services.

These facts have pushed the Dutch government to propose a spending cut of 3.2 billion euro, partially by making taxes higher on tobacco and reducing medical benefits.

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