UPTAKE AND DIFFUSION OF PHARMACEUTICAL INNOVATIONS IN HEALTH SYSTEMS - Innovation in the Biopharmaceutical Industry - page 95

2000). All this has a net result of increased overall prescribing and expenditure
(Soumerai, 1990; Ross-Degnan et al. , 1993). For example, limiting the number of
prescriptions for patients with chronic illness, can lead to a rapid decline in utili-
sation of medicines, along with an increase in more costly hospitalisations and use
of outpatient services (Soumerai et al. , 1987, 1991, 1994). However, as the stud-
ies examined use changes in aggregate utilisation levels as end points, differential
impact of these policies on the uptake of innovative medicines is not clear.
Organisational Changes
A number of studies have explored the impact of new organisational forms on
prescribing patterns (changes in the prescribing volume, unit cost of prescribing
and prescribing of generic medicines).
General practice fundholding in the UK
General practice (GP) fundholding was introduced in England in 1989 as part of
health reforms aimed at improving the efficiency and responsiveness of the health
system. These reforms led to a separation of planning and purchasing functions from
service provision, but also gave GPs the option to have budgets for management,
medicines, and diagnostic tests, and for purchasing services from hospitals. GPs
had an economic incentive to use these budgets efficiently, since they could retain
savings for investment in their practices.
Given similar budgets for medicines, GP fundholders reduced both the overall
annual cost of prescribing (Bradlow and Coulter, 1993) and the rate of increase
in prescribing costs more than non-fundholders did (Wilson et al. , 1996, 1997).
Savings were achieved through a simultaneous reduction in prescribing volume and
cost of per item prescribed (Wilson et al. , 1995), increased prescribing of generic
medicines (Rafferty et al ., 1997), and reduced prescribing volume combined with
higher unit cost per prescription (Maxwell et al. , 1993). Fundholding GPs used
therapeutic substitution and therapeutic conservatism to contain prescribing costs.
There was no evidence, however, that they were slower than non-fundholding GPs
to take up innovative medicines (Wilson et al. , 1999). Savings associated with the
GP fundholding schemes were observed only in the early years. Within three to four
years of joining the scheme, the prescribing patterns of fundholding GPs converged
with those of non-fundholding practices (Stewart-Brown et al. , 1995; Harris and
Scrivener, 1996; Rafferty et al. , 1997; Whynes et al. , 1997). Changes in prescribing
behaviour were observed in non-fundholding GP practices that were given economic
incentives and targets to reduce prescribing costs (Bateman et al. , 1996).