UPTAKE AND DIFFUSION OF PHARMACEUTICAL INNOVATIONS IN HEALTH SYSTEMS - Innovation in the Biopharmaceutical Industry - page 93

penetration by competing generics and a sharp decline in the price for patented
medicines. In systems which administer prices, such as Italy and France, patent
expiry results in a more gradual change.
In the US the growth of managed care and regulatory policies which encourage
or mandate generic substitution has led to a rapid expansion of the market share of
generic drugs (Kane and Saltman, 1997). Similarly, in the UK, selective reimburse-
ment lists, indicative drug budgets, initiatives to change prescribing behaviour and
the use of generic names when training medical students, have led to rapid uptake of
generics and a decline in the use of off-patent drugs (Burstall, 1997). Increased pre-
scribing of generics was also observed in the Netherlands where a government-led
educational campaign targeted physicians to change prescribing patterns (Kanavos
and Mossialos, 1999).
Health technology assessment
Health technology assessment (HTA) examines the short- and long-term clinical,
economic and social consequences of the application or use of a particular tech-
nology (Draborg et al. , 2005). HTA uses economic evaluation to assess whether
technologies that have been proven safe and efficacious are also cost-effective for
the purchaser. This approach, often referred to as a “fourth hurdle” (Freeman-
tle, 1999) is increasingly being used in Europe, North America, Australia and
New Zealand to aid priority setting in health systems and to inform reimburse-
ment decisions for new drugs and technologies (Oliver et al. , 2004; Hivon et al. ,
2005).
In the EU economic evaluation studies are being more widely adopted to assess
cost-effectiveness of drugs and in deciding whether new drugs should be approved
for reimbursement. However, these studies seem to have only a limited and varied
influence on decision-making. Thus in England where National Institute for Health
and Clinical Excellence (NICE) recommends which of the licenced drugs should be
used in the English National Health Service (NHS) and issues guidelines on their
use, implementation of these recommendations vary by provider unit and by topic.
(Sheldon et al. , 2004) Typically, new drugs not approved by NICE are not reimbursed
and are not prescribed in the NHS. In contrast, issuance of NICE guidance on use
of a new class of medicines and approval by health authorities for reimbursement
(Mace and Taylor, 2003) does not guarantee their use in clinical practice.
Changes in Health System Financing
Effect of health insurance
Studies in the US demonstrate that health insurance coverage increases the use
of medicines (Leibowitz et al. , 1985; Hillman et al. , 1999; Lyles and Palumbo,