GEORGIAN INSURERS ASSOCIATION

FACTORS INFLUENCING OUTPATIENT PHYSICIAN PRESCRIPTION PRACTICIES IN GEORGIA

Final Report
June 2012

Table of Contents

SECTION I: Objective 1: Objective 2: Objective 3: Objective 4:

ACCOMPLISHMENTS ............................................................................................................ 2 Factors Influencing Prescription Practices .................................................................... 2 Study Rational Prescription Practices ........................................................................... 3 Define Economic Impact of Prescription Practices ....................................................... 4 Advocacy and Public Awareness ................................................................................... 4

Position Papers...................................................................................................................................... 4 Public Discourses: ................................................................................................................................. 4 TV coverage........................................................................................................................................... 5 Radio Coverage ..................................................................................................................................... 5 Newspapers .......................................................................................................................................... 5 SECTION II: SECTION III: ANNEX 1: CHALLENGES ......................................................................................................................... 5 ANNEXES ............................................................................................................................... 6 FACTORS INFLUENCING OUTPATIENT PHYSICIAN PRESCRIPTION PRACTICIES IN GEORGIA6

ANNEX 2: FACTORS INFLUENCING OUTPATIENT PHYSCIAIN PRESCRIPTION PRACTICIES IN INSURANCE SETTINGS................................................................................ Error! Bookmark not defined. ANNEX 3: RATIONALIZATION OF PHARMACEUTICAL EXPENDITURE , POSITION PAPER .............. Error! Bookmark not defined. ANNEX 4: POPULATION SURVEY .............................................................. Error! Bookmark not defined. ANNEX 5: POSITION PAPER ...................................................................... Error! Bookmark not defined.

SECTION I:
Objective 1:

ACCOMPLISHMENTS
Factors Influencing Prescription Practices

In the reporting period the following activities have been completed under the grant: Literature Review the expert team has reviewed literature published internationally. The review guided formulation and design of the activities planned. The project has organized the Focused Group Discussion (FGD) with the primary health care physicians to obtain qualitative information regarding factors influencing prescribing practice in Georgia. Based on the FGD is became clear that only qualitative information was not sufficient to find out tendencies, therefore the team has prepared all required tools to conduct quantitative survey on Factors Influencing Prescription practices in Georgia. The above mentioned survey was not planned in the original project proposal. A questionnaire was developed, specifically for the purposes of the survey. The questionnaire is divided into six different sections. The first includes questions about the demographic characteristics of the person answering; the second is designed to investigate the determinants of physician prescribing behavior and their main sources of information; the third reflects their opinion about the cost of pharmaceuticals to the patient; the fourth section focuses on attitudes towards the prescription of generics; the fifth section reflects attitudes towards new pharmaceutical products; the last section is about adverse drug reactions and safety. In total, the questionnaire included 30 closed questions. It was piloted to a group of 10 physicians in the period of June 01 to June 30 of 2011. The physicians who participated in the pilot study made significant comments towards the improvement of the instrument and all of their recommendations were taken into consideration and were incorporated in the final questionnaire. The survey sampling methodology used was not a classical random sampling. The sampling methodology proposed the following steps: Firstly the settlements or cities have been selected. The researchers selected Tbilisi, a capital as one major administrative unit as well as all regional centers and randomly selected one district in each region. Secondly all functional medical facilities, offering outpatient services to the population in selected geographical areas were included in the survey sample. Thirdly as the research team was unable to obtain official information about number of practicing physicians in each selected facility from official sources, the decision has been made to survey everyone being present at the facility on the day of the survey. In total 619 physicians in 65 selected institutions have been conducted. The team managed to finalize field work and data analysis. The final report is attached to this report ( Annex I)

Objective 2:

Study Rational Prescription Practices

Two types of surveys were administered by GIA to assess rational prescription practices: Rational Drug Use in Insurance schemes This survey aimed at studying the patterns of drug prescription and use in insurance setting, identification of problematic areas and will guide the development of the recommendations related to overall policy changes/interventions, as well about the ways the insurance industry can deal with irrational drug use and improve efficiency of pharmaceutical benefit management. As Georgia does not practice mandatory prescribing and there is no ay other source available to be used for assessing rational drug use, the researchers were forced to focus only on insurance industry, where physician prescriptions are required for pharmaceutical claims reimbursement. For this purpose, only two insurance companies, having digitalized claims information and being willing to take part in the research, were selected. The claims data from both companies have been obtained for the period of January, 2011 July2011 and claims selected using random sampling methodology. In total claims for 83,250 insurance cases were analyzed using the WHO prescription indicators (Table 1). These indicators are highly standardized, do not need national adaptation, and are recommended for inclusion in any drug use study using indicators. They do not measure all important aspects of drug utilization as this would require more intensive methodologies and more expenses and varied sources of data. Instead, the core indicators provide a simple tool for quickly and reliably assess a few critical aspects of pharmaceutical use in primary health care. Results with these indicators should point to particular drug use issues that need examination in more detail. These indicators are the minimum set of measures to be calculated during the drug use survey. Table 1: WHO Prescription Indicators
Core drug use indicators Average number of drugs per encounter Percentage of encounters with a generic prescribed Percentage of encounters with antibiotic prescribed Percentage of encounters with injection prescribed

The core prescribing indicators do not require the collection of any information on signs and symptoms. Because the samples of clinical encounters cover broad spectrum of the health problems, the core prescribing indicators measure general prescribing tendencies independent of specific diagnoses. Admittedly, many critical questions in drug use have to do with whether health care providers follow appropriate diagnostic procedures and whether they select products and dosage schedules to fit underlying health problems. However, determining the quality of diagnosis and evaluating the adequacy of drug choices is a complex undertaking in practice, and beyond the scope of the core indicators. Results of the Study are attached to the Final Report.

Population Based Survey The survey tool was designed to collect information regarding four major aspects: Health status self assessment Who prescribes medicines tendencies Drug purchasing practices Drug administration practices

The survey was administered in October-November, 2011

The final presentation of the survey results are attached.

Objective 3:

Define Economic Impact of Prescription Practices

GIA studied the economic impact of prescription practices using secondary data from the Survey of Price, Access and Affordability of medicines in Georgia. The team managed to calculate the costs of standard treatment protocols of four diseases using brand name medicines and equivalent low cost generics. Results of economic analysis were included in the presentation of Impact of Prescription Practices on access to health Service in Georgia .

Objective 4:

Advocacy and Public Awareness

Position Papers Two position papers were prepared during the project. 1. Rationalization of Pharmaceutical Expenditures in Georgia ( interim position paper) 2. Generating Resources to Ensure Financial Accesses to Quality Health Services

Public Discourses: Two public discourses were organized around pharmaceuticals. A wide range of stakeholders including public, private (health providers, Insurance companies, pharmaceutical industry), professional associations and civil society participated in public discourses.

A special presentation of the Position Paper II was organized for journalists on May 30, 2012 to ensure that mass media understands the main challenges and give a wide coverage to these issues. As a followup to this event, the Business Courier at Rustavi2 focused twice within a week on issues of generating resources for affordable healthcare through reducing drug expenditures: on 01.06.2012 inviting the CEO of Archimedes Global Georgia and on 07.06.2012 discussing measures to be taken with Devi Khechinashvili, Chairman of GIA. TV coverage 1. http://1tv.ge/video/13137 2. http://1tv.ge/video/12747 3. http://www.rustavi2.com/news/programs_rug.php?l=31 23.04.12, 01.06.12, 07.06.12. Radio Coverage Three radio talk shows were organized on radio Imedi (see web links below) 1. http://soundcloud.com/insurersassociation/29-may-radio-imedi 2. http://soundcloud.com/insurersassociation/28-may-radio-imedi 3. http://www.palitratv.ge/gadacemebi/mkurnali/16584-qradiomkurnaliq-jandacvis-sferoshiarsebuli-problemebi.html Newspapers http://www.kvirispalitra.ge/public/11953-saqarthvelo-yvelaze-qtsamalthmoyvareq-qveyana.html Axali Versia on May 16, 2012

SECTION II:

CHALLENGES

Ability of the Insurance companies to provide pharmaceutical claims databases that are standardized and allow sorrow analysis. This aspect limited research team o focus survey only two insurance companies. Delays in implementation of some activities planned under the advocacy and public awareness component was due to the change of leadership at the Ministry of Labor, health and Social Affairs.

SECTION III:

ANNEXES

2011
FACTORS INFLUENCING OUTPATIENT PHYSICIAN PRESCRIPTION PRACTICIES IN GEORGIA

June 2012

Introduction
Over the past decade, pharmaceutical expenditure has risen rapidly in Georgia and this has been a reason for concern to policymakers. Pharmaceutical expenditure accounts, on average, for about 10% of the Gross Domestic Product (GDP). It is notable however that its growth in real terms is higher than the growth rate of total healthcare expenditure or the growth rate of GDP. Alongside the concern regarding the growth of pharmaceutical expenditure, there is also an increasing concern regarding irrational, inappropriate, or sometimes even harmful prescribing. Ensuring appropriate prescribing is a major challenge for the health service. Inappropriate prescribing has both clinical and cost implications, which may be substantial1. Factors implicated in inappropriate prescribing, and methods for improving prescribing patterns have been the subject of a considerable body of research that has highlighted the complexity of this topic2. Prescribing involves a complex process3 of sifting information from various sources and balancing a range of personal, social, and logistical influences, in addition to those that are purely medical and pharmacological. In the case of new drugs, practitioners are trying to balance a range of factors, such as potential side effects, long-term effects, and the range of therapeutic indications, for which relatively little information is available and around much of which they may have little or no practical experience. Under such circumstances prescribing may be more an act of faith than a rational process. Moreover, there is also an anecdotal evidence about over and misuse of pharmaceutical products. The consequence of the above can be the loss of health and quality of life benefit for patients and society and the increase of health care expenditure. Thus, for health and economic reasons, it is important to follow the recommended optimal and established drug prescription guidelines. It is obvious that there is call for work that will take account of the reasons behind individual prescribing decisions.

Survey Methodology
A questionnaire was developed, specifically for the purposes of the survey. The questionnaire is divided into six different sections. The first includes questions about the demographic characteristics of the person answering; the second is designed to investigate the determinants of physician prescribing behavior and their main sources of information; the third reflects their opinion about the cost of pharmaceuticals to the patient; the fourth section focuses on attitudes towards the prescription of generics; the fifth section reflects attitudes towards new pharmaceutical products; the last section is about adverse drug reactions and safety. In total, the questionnaire included 30 closed questions. It was piloted to a group of 10 physicians in the period of June 01 to June 30 of 2011. The physicians who
1 2

Soumerai SB. Factors influencing prescribing. Aust J Hosp Pharm 1988; 18(suppl): 9-16. Bradley CP. Uncomfortable prescribing decisions: a critical incident study. BMJ 1992; 304: 294-296; Allery LA, Owen PA, Robling MR. Why general practitioners and consultants change their clinical practice: a critical incident study. BMJ 1997; 314: 870-874. 3 Drage M, Wakeford R, Wharton A. What do general practitioners think changes their clinical behaviour? Educ Gen Pract 1994; 5: 48-53.;

participated in the pilot study made significant comments towards the improvement of the instrument and all of their recommendations were taken into consideration and were incorporated in the final questionnaire. The survey sampling methodology used was not a classical random sampling. The sampling methodology proposed the following steps: Firstly the settlements or cities have been selected. The researchers selected Tbilisi, a capital as one major administrative unit as well as all regional centers and randomly selected one district in each region. Secondly all functional medical facilities, offering outpatient services to the population in selected geographical areas were included in the survey sample. Thirdly as the research team was unable to obtain official information about number of practicing physicians in each selected facility from official sources, the decision has been made to survey everyone being present at the facility on the day of the survey. In total 619 physicians in 65 selected institutions have been conducted. The study limitation apart from the above mentioned was the lack of distinction between primary and secondary care physicians, which would have allowed a better comparison with other studies in this field. However, this parameter was not taken into account during the study design because Georgia has no gate-keeping system and patients have free access to every physician of every specialty and level of care.

Survey Findings
Demographic Characteristics of Respondents
619 physicians participated in the study 54% were male and 46% female. As indicated in Table 1, more than one third of the participants (37%) were between 4150 years of age.
Table 2: Age and Gender Distribution of Respondents Age <30 y 30-40 y 41-50 y 51-60 y 61< y Total Number 19 108 225 179 85 616 % 3% 18% 37% 29% 14% 100% 12 59 100 74 36 281 Female 2% 10% 16% 12% 6% 46% 7 49 125 105 49 335 Male 1% 8% 20% 17% 8% 54%

The largest proportion of participants (58%) has more than 20 years of practical experience, thus representing more experienced sample. In terms of specialties, the largest proportion of the participants was Family Doctors (24%), followed by internists and pediatricians, 15% and 14 respectively

(Table 2). A larger percentage of respondents named International conferences (26%), new text books (22%) and short-term courses (18%) as the most frequently used sources for continuous professional development (Table 3).
Table 3: Respondents by Specialty, Age Groups and Practice Location Age Groups <30 FP/GP Internist Pediatrician Gynecologist5 Cardiologist Neurologist Endocrinologist Surgeon Other 2 3 1 1 1 0 2 5 3 30-40 33 17 10 12 4 9 5 9 15 41-50 65 24 36 20 6 14 10 15 46 51-60 45 31 26 11 11 8 4 22 26 >61 7 19 16 1 6 11 2 10 14 Total 152 94 89 45 28 42 23 61 104 % 24% 15% 14% 7% 4% 7% 4% 10% 16% Practice Location Tbilisi 85 45 36 16 16 23 14 23 45 Regions 67 49 53 29 12 19 10 38 61

About a third (33%) of surveyed physicians who prescribe medicines on a daily basis work in the inpatient departments of hospitals, 30% at policlinics and the remaining in other outpatient settings.
Table 4: Most Frequent Sources of Continuous Professional Development Most Frequent Sources of Continuous Professional Development International Conferences New Text Books Short-term Courses Scientific Publications Local Conferences/Workshops Other Tbilisi 23% 20% 24% 13% 13% 6% Regions 28% 23% 17% 22% 5% 6% Total 26% 22% 20% 18% 9% 6%

In terms of computer acquaintance Tbilisi physician cohort appears to have a slight advantage (Table 4). However, it needs to be noted that physicians in both, capital and regions use internet to find out information about new treatment schemes.
Table 5: Use of Internet as a source of learning about new treatment schemes Use of Computer per month Tbilisi Never Use About 2 hours About 5 hours >5 hours
7 65 55 153

Total Regions
34 109 72 119

% Total 41 174 127 272 Tbilisi 3% 23% 20% 55% Regions 10% 33% 22% 36% Total 7% 28% 21% 44%

Characteristics of drug selection for treatment

As mentioned earlier, the first part of the questionnaire was intended to investigate the criteria which physicians take into consideration when making prescribing decisions and their sources of information regarding advances in pharmaceuticals. As indicated in Table 5, clinical effectiveness is the most important factor both in the capital and regions, reaching overall 24.1% defining prescriptions. Next most frequently considered sources for prescription decision are clinical guidelines and own experience. Treatment cost effectiveness is less taken into account by Physicians (10.7%). Findings also revealed that physicians rarely consider availability of drugs (4.3%) on a local market while prescribing treatment.
Table 6: Characteristics of drug selection for treatment Considerations taken into account for prescribing Evidence Based clinical effectiveness Clinical Guidelines Own experience Treatment cost effectiveness Drug Price Country of Production Availability in local market Patient request Other Colleagues advise Advice of the Pharmaceutical Rep Most advertised in media Cost of Medicines as a factor of drug choice Not at all Important Not very Important Important Highly Important Patient's "Insured Status" influences Prescriptions Expensive medicines Relatively cheap medicine Foreign products Locally produced medicines Insurance Company Formulary National EDL 0,7% 8,4% 5,2% 6% 24% 7% 1,0% 12,6% 6,3% 8% 27% 9% 0,8% 10,8% 5,8% 7% 26% 8% 2,2% 12,0% 30,4% 55,4% 3,0% 8,4% 33,2% 55,4% 2,6% 10,0% 32,0% 55,4% Tbilisi 25,8% 24,4% 17,0% 10,5% 5,9% 7,4% 5,0% 1,4% 1,1% 0,5% 0,8% 0,1% Regions 22,7% 21,0% 22,8% 10,8% 8,7% 5,8% 3,7% 1,5% 0,6% 1,1% 0,6% 0,7% Total 24,1% 22,6% 20,2% 10,7% 7,4% 6,5% 4,3% 1,4% 0,9% 0,8% 0,7% 0,5%

Does not influence prescription Sources referred for justifying prescription decisions Published articles in Medical Journals Medical textbooks Conference materials National Guidelines International guidelines Pharmaceutical sales Reps other Reasons for searching information from the above sources on prescription choice Indications Dose Form Country of Production Pharmaceutical Characteristics Interactions with other medicines and substances Contraindications Adverse drug effects Price

48% 9,8% 16,8% 18,1% 17,4% 24% 11% 3% 21,9% 15,7% 1,8% 6,5% 14% 14% 10% 13% 3%

37% 9,3% 22,6% 16,1% 19,9% 14% 16% 2% 22,9% 19,4% 0,9% 5,2% 14% 11% 10% 13% 3%

42% 9,5% 20,0% 17,0% 18,8% 19% 14% 2% 22,4% 17,7% 1,3% 5,8% 14% 12% 10% 13% 3%

Physicians derive information to guide and justify their prescription choices mainly from medical journals, medical textbooks, proceedings of medical conferences, pharmaceutical sales representatives, guidelines and the internet. Specifically, Georgian physicians rely more on medical textbooks and guidelines (around 38%) and less on pharmaceutical representatives (14%). On the other hand, conference materials, the latter being mainly financed by pharmaceutical market and pharmaceutical representatives are preferred as an information source by 31%. Physicians are looking for information on the above sources mainly regarding the indications, recommended dose of drugs, forms, and country of production, their potential side effects, pharmaceutical characteristics, contraindications and prices.

Attitudes of physicians towards generic prescribing

Table 6 contains information regarding the responses of physicians in relation to generic drug use. It is noteworthy that more than half of surveyed doctors in Georgia find generic drugs excellent or satisfactory in terms of efficacy, safety and effectiveness (98%, 95.2% and 69.7% respectively). About 78% of Georgian Physicians find generic drugs cheaper or same price to their branded ones. However, only 16.5% of them prescribe generic drugs.

Table 6: Attitudes of physicians towards generic prescribing Tbilisi Perceived quality of generic drugs in comparison to their branded ones Excellent High quality Satisfactory Rather bad Bad Perceived safety of generic drugs in comparison to their branded ones Very Safe Safe Average Unsafe Perceived clinical effectiveness of generic drugs in comparison to their branded ones Incomparably more effective Comparably effective Equally effective Less effective Not Effective Cost of generic drugs in comparison to their branded ones More Expensive Relatively Expensive Same Price Relatively Cheep More Cheep Prescribing Practice Original Brands Generics Brand Generics 64,5% 13,4% 22,1% 55,3% 19,1% 25,5% 59,5% 16,5% 24,0% 1,9% 18,4% 9,0% 68,9% 1,9% 2,8% 20,9% 14,1% 58,3% 4,0% 2,4% 19,7% 11,8% 63,1% 3,0% 2,6% 24,9% 38,1% 34,0% 0,4% 2,7% 34,5% 35,7% 26,8% 0,3% 2,7% 30,3% 36,8% 30,0% 0,3% 3,0% 71,3% 20,9% 4,9% 3,6% 66,6% 25,0% 4,8% 3,3% 68,7% 23,2% 4,8% 6,0% 50,2% 42,7% 0,7% 0% 6,7% 54,1% 36,5% 2,7% 0% 6,4% 52,3% 39,3% 1,8% 0% Regions Total

Attitudes of physicians towards new drugs

Information regarding attitudes in relation to new drugs is presented in Table 7. The majority, 75%, of physicians in Georgia believe that a higher price imply better patient outcomes. The perceptions of 60% of physicians are that new drug more effective. Finally, regarding the sources of information about new product launches, these mainly include internet, printed marketing material, scientific articles, congresses and sales representatives and secondarily scientific medical societies.

Table 7: Attitudes of physicians towards new drugs Tbilisi High Price of new drugs as an indication of high clinical effectiveness Fully Agree Agree Partially Agree Do not Agree Strongly Disagree Perceived clinical effectiveness of new drugs Clearly more effective Rather more effective Do not differ significantly Do not differ at all Source consulted in order to get information about new drugs Medical Journals Scientific articles Medical Congresses. Conferences Pharmaceutical Sales Reps Printed Marketing Material Colleagues Professional Associations Internet 7% 16% 17% 11% 15% 2% 5% 28% 10% 15% 12% 11% 16% 1% 7% 27% 9% 15% 15% 11% 16% 1% 6% 27% 14% 46% 38% 3% 16% 45% 33% 6% 15% 45% 35% 5% 3% 16% 58% 22% 1% 3% 23% 52% 19% 3% 3% 20% 55% 20% 2% Regions Total

Attitudes of physicians towards drug safety

Finally, Table 8 presents information regarding physician attitudes towards safety issues. As indicated by the finding. Side effects appear in both countries to be a major cause of prescription choice modification, as more than 90% of doctors declare that they change their prescription patterns in cases of side effects. It is also noteworthy that the majority of doctors do not inform the authorities about their own cases of side effects. Only 1% of physicians report to Ministry of Health and 14% to the clinic administration, while 33% of physicians report directly to pharmaceutical representatives and 43% share with colleagues.
Table 7: Attitudes of Physicians towards drug safety Tbilisi Appearance of ADRs affects prescribing decision Always Sometimes 99% 1% 99% 1% 99% 1% Regions Total

Never Reaction to ADR appearance Clinic Administration Ministry of Health Pharmaceutical Representative office Manufacturer Headquarter Pharmacy that sold the drug Just inform colleagues Do not react at all

0% 8% 1% 37% 2% 1% 44% 7%

0% 20% 1% 29% 1% 2% 43% 4%

0% 14% 1% 33% 2% 2% 43% 5%

Analysis
Pharmaceutical market appears as a main financier of the physicians continuous medical education (CME) activities According to the present analysis, the largest proportion of participants has more than 20 years of practical experience, thus representing more experienced sample. More than half of Physicians upgrade their professional education by attending local or international conferences and short-term course. It is notable that the Georgian Government stopped financing of CME activities for last couple of years. The state funding is no longer available neither for participation in local or international conferences, or for short-term courses in support of physicians continuous education. The professional associations also fall short to meet member requirements; therefore these types of educational events at a lesser degree are financed privately by doctors and more frequently by Pharmaceutical companies. Thus the pharmaceutical market using their financial leverage in support of CME may potentially influence physicians prescription practices.

Georgian Physicians are computer literate and use internet as a main source of information Use of internet as a most frequently used source for CME was named by majority of surveyed physicians. Insignificant difference was observed between the physicians practicing in the capital and in the regions. About half of physicians spend more than five hours in order to obtain new information from internet.

Treatment cost effectiveness and cost of medicines rarely influence prescription decisions Absolute majority of Georgian physicians consider drug cost to be highly important and important factor to be well thought-out for prescription purposes, but only few percent of physicians take it less or more seriously into consideration when prescribing.

Georgian Physicians tend to use national and international guidelines for justification of prescription decisions The results of our study show that one third of physicians use national and international guidelines to justify their drug selection decision. The policy makers can build on this finding and foster wider use of guidelines in order to improve treatment clinical and cost effectiveness.

Patients Insurance Status does not influence prescription decisions Study revealed that in more than half of cases patients insurance status doesnt effects prescription decision. While ignorance of insurance status contributes towards increased pharmaceutical costs in general, the problem is the way the pharmaceutical benefits are designed and managed by the industry. Insurance status is considered in those cases where pharmaceutical benefit is reimbursed by the insurance company against specific formulary and/or national essential drug list. Physicians compliance with established rules of using formularies should be used as an opportunity by the policy makers, including the insurance industry.

Physicians attitude towards generic drugs is positive, but rarely prescribed It is noteworthy that more than half of surveyed doctors in Georgia find generic drugs excellent or satisfactory in terms of efficacy, safety and effectiveness and find them cheaper to their branded ones. Moreover, majority of them consider cost of medicines as an important factor for prescribing decision, but in a reality generic drugs are rarely prescribed, physicians do not prescribe generic drugs as a means to curtail expenditure. Given behavior is not influenced by the lack of knowledge and/or information and/or negative attitude, rather by the possible incentives in the market. Low generic drug use in this country can be explained through the combination of several factors. The given research was not able to detect direct incentive factors guiding such behavior, however based on the findings as well as health sector design and performance, one can name selected indirect factors such as: poorly defined government stewardship and regulatory role, namely absence of well formulated pharmaceutical policy, loosely regulated pharmaceutical sector, no restrictions for Pharmaceutical marketing, few treatment guidelines and no enforcement for utilization, diminishing role of the state in health human resource management and development, including post diploma and continuous medical education and pharmaceutical market becoming major financier of human resource development activities. Furthermore, in Georgia there are no financial incentives to motivate physicians to prescribe generics and to promote the generic market.

Physicians believe that a higher price imply better patient outcomes The study found that the majority of physicians in Georgia believe that a higher price imply better patient outcomes. The perceptions of physicians are that new drugs are more effective. In case of new drugs, pharmaceutical market appears to be the most powerful source of information. About half of

phsycians receive information about new drugs from pharmaceutical sector financed conferences, sales representatives and drug marketing materials. These data are consistent with those from other studies, where it has been also shown that pharmaceutical sales representatives are highly influential on decisions to prescribe new drugs45. No government recognized authority is considered by physicians to be responsible for drug safety and pharmacovigilance Even though adverse drug reactions may not appear very often, they do have a profound effect on a physician prescribing patterns, so doctors seek information in order to be protected and prepared. It is notable, however, that when they encounter such problems physicians rarely inform the authorities accordingly, perhaps because they either they do not know who is responsible authority or do not want to acknowledge the fact that their patients had side effects. According to the finding of the study physicians mostly inform pharmaceutical companies and share information with colleagues.

Conclusion
Although this study is based around prescribing, the results may have a wider validity and speak to a more general phenomenon, which needs to be further explored. Focusing on the issues raised around prescribing it is suggested to promote cost effective prescribing. Efforts should focus on incorporating cost-consciousness more uniformly into prescribers reasoned actions through strategies implemented by both, state and insurance industry.

Prosser H, Almond S, Walley T: Influences of GP's decision to prescribe new drugs the importance of who says what. Fam Pract 2003, 20:61-68
5

Jones M, Greenfield S, Bradley C: Prescribing new drugs: qualitative study of influences on consultants and general practitioners. BMJ 2001, 323:1-7.

FACTORS INFLUENCING OUTPATIENT PHYSICIAN PRESCRIPTION PRACTICIES IN GEORGIA

2011

Final Report

Introduction

Drug utilization research is an essential part of pharmaco-epidemiology as it describes the extent, nature and determinants of drug exposure6. The World Health Organization (WHO) in 1997 defined drug utilization as the marketing, distribution, prescription and use of drugs in a society, with special emphasis on the resulting medical, social and economic consequences7.Drug use is a complex process. In any country a large number of socio-cultural factors contribute to the ways drugs are used. The complexity of drug use means that optimal benefits of drug therapy in patient care may not be achieved because of underuse, overuse or misuse of drugs. Inappropriate drug use may also lead to increased cost of medical care, antimicrobial resistance, adverse effects and patient mortality. Essential drugs offer a cost-effective solution to many health problems8. They should be selected with due regard to disease prevalence, be affordable, with assured quality and be available in appropriate dosage forms. Prescribers can only treat patients in a rational way if they have access to an essential drug list and essential drugs are available on a regular basis9. To assess the scope for improvement in rational drug use in outpatient practice, the World Health Organization (WHO) has formulated a set of core drug indicators. The core prescribing indicators measure the performance of prescribers. Based on these indicators studies have been carried out in number of developing countries. Since no such study has been carried out in Georgia, we wanted to measure prescribing indicators in outpatient clinics to obtain data for promoting rational drug use.

Purpose of the Survey

This survey aims at studying the patterns of drug prescription and use in insurance setting, identification of problematic areas and will guide the development of the recommendations related to overall policy changes/interventions, as well about the ways the insurance industry can deal with irrational drug use and improve efficiency of pharmaceutical benefit management.

Methodology
As Georgia does not practice mandatory prescribing and there is no ay other source available to be used for assessing rational drug use, the researchers were forced to focus only on insurance industry, where physician prescriptions are required for pharmaceutical claims reimbursement.

66

Sjoqvist F, Birkett D. Drug Utilization. In: Bramley DW editor. Introduction to Drug Utilization Research. (WHO booklet) New York: WHO office of publications; 2003. P.76-84 7 WHO Expert Committee. The Selection of Essential Drugs, Technical Report Series no. 615. Geneva: World Health Organization, 1977 8 Quick JD, Hogerzeil HV, Velasquez G, Rago L. Twenty-five years of essential medicines. Bull W H O 2002; 80 : 913-914 9 International Network for Rational Use of Drugs and World Health Organization. How to investigate drug use in health facilities: Selected drug use indicators. EDM Research Series No. 7 [WHO/DAP / 9 3 . 1 ] . Geneva : World Health Organization, 1993

For this purpose, only two insurance companies, having digitalized claims information and being willing to take part in the research, were selected. The claims data from both companies have been obtained for the period of January, 2011 July2011 and claims selected using random sampling methodology. In total claims for 83,250 insurance cases were analyzed using the WHO prescription indicators (Table 1). These indicators are highly standardized, do not need national adaptation, and are recommended for inclusion in any drug use study using indicators. They do not measure all important aspects of drug utilization as this would require more intensive methodologies and more expenses and varied sources of data. Instead, the core indicators provide a simple tool for quickly and reliably assess a few critical aspects of pharmaceutical use in primary health care. Results with these indicators should point to particular drug use issues that need examination in more detail. These indicators are the minimum set of measures to be calculated during the drug use survey. Table 8: WHO Prescription Indicators
Core drug use indicators Average number of drugs per encounter Percentage of encounters with a generic prescribed Percentage of encounters with antibiotic prescribed Percentage of encounters with injection prescribed

The core prescribing indicators do not require the collection of any information on signs and symptoms. Because the samples of clinical encounters cover broad spectrum of the health problems, the core prescribing indicators measure general prescribing tendencies independent of specific diagnoses. Admittedly, many critical questions in drug use have to do with whether health care providers follow appropriate diagnostic procedures and whether they select products and dosage schedules to fit underlying health problems. However, determining the quality of diagnosis and evaluating the adequacy of drug choices is a complex undertaking in practice, and beyond the scope of the core indicators.

Study Limitation
Any drug utilization study based on WHO core drug use indicators has limitations. Determining the quality of diagnosis and evaluating the adequacy of drug choices is beyond the scope of the prescribing indicators. However the present study provides important useful baseline data which will be used for comparison when in future any such drug utilization sty will be carried out.

Results
A total of 282,398 drugs were prescribed for 83,250 encounters, giving an average of 2.9 per encounter, which is higher than internationally accepted 2.0 drugs per encounter. One drug was

prescribed in 25%, two drugs in 24% and in 52% of encounters three and more drugs were prescribed (Table 2). The range of drugs per encounter varied from 1 to 31.
Table 9: Total Number of Drugs Prescribed per Encounter
Number of Drugs Prescribed Per Encounter 1 2 3 >3 Total 23 912 23 532 20 149 28 908 % 25% 24% 21% 30%

Generic prescribing appears not to be a dominant practice (Table 3) as in 96% of encounters medicines are prescribed by brand names.
Table 10: Percentage of drugs prescribed by generic name % 96% 4%

Brand Generic

The percentage of encounters with antibiotics was 12.8%. A single antibiotic was prescribed in 80% of encounters, two antibiotics (16%) and in remaining three antibiotics (Table 4). Antibiotics are mainly prescribed by brand name (96.8%) and generic prescription was only 3.2%.
Table 11: Percentage of encounters with an antibiotic prescribed Number of encounters 23 493 4 582 1 112 % 80% 16% 4%

One antibiotic Two antibiotics Three antibiotics and more

Antibiotic prescription practices differ across the country. Highest usage has been recorded in Guria (31.8%), Shida Kartli (20.8%) and Imereti (20.2%) regions, while the lowest antibiotic prescription was recorded in Samtskhe-Javakheti region (10.2%).

Table 12: Percentage of encounters with injection drugs prescribed Number of encounters 15 038 % 5%

Injection drugs

Other drugs Injection drugs prescribed by Brand Name Injection Drugs prescribed by Generic Name

267 361 13 248 1 789

95% 88% 12%

The study revealed that injection drug use is low in insurance setting and represents only 5% of encounters (Table 5). Only 12% of injection drugs are prescribed by generic name. Injection drug use is highest in Guria (17.1%) and Samtskhe -Javakheti (11.2%) regions, while the lowest has been recorded in Tbilisi 7.4%. The analysis also shows potential financial implications of the given practice. More specifically, average price of generic medicines paid by insurance is 60% cheaper of brand name medicines and generic antibiotics 63% cheaper of their equivalent brand antibiotics (Table 5).
Table 13: Average price of Medicines Average Price per prescribed drug in GEL 15,58 6,22 23,76 8,78

Brand Generic Brand Antibiotic Generic Antibiotic

Discussion
Irrational use of drugs may lead to: 1. Ineffective & unsafe treatment 2. Exacerbation or prolongation of illness 3. Distress & harm to patient 4. Increase the cost of treatment Average number of drugs per encounter is an important index of the scope for educational intervention in prescribing practices. Our figure of 2.9 drugs per encounter is higher than the internationally recommended limit of 2.0. In this study three or more drugs were prescribed in 51% of prescriptions which increases the risk of drug interactions and of the patients not knowing the dosage schedule. Increasing generic prescribing, which is extremely low and account for only 4%, would rationalize the use and reduce the cost of drugs. Appropriate use of antibiotics is necessary to prevent emergence of drug resistant bacteria. Our figure of 12.8% prescriptions having an antibiotic is slightly higher than internationally recommended percent. Rationalization of the antibiotic prescription will result in lowering treatment costs. A need arises to reduce injection drug use to prevent healthcare associated infections and other blood borne pathogens. In the present study injection use is low and represents only 5% of encounters.

Recommendations
Regularly monitoring of drug use practices in institutions and at household level, as well as measuring the impact of interventions is an indispensable part of a national RDU strategy; Development and implementation of the National treatment guidelines and protocols can play a vital role for promotion of the rational drug use. Special attention should be devoted to designing economic strategies to improve drug use, including policies that reduce incentives for poor drug use, and increase incentives for improved drug use. Health insurance companies can assist in designing these policies. Moreover, regulating the patient demand for drugs is an essential strategy. The Insurance Industry through introduction of the tired Drug Formulary (with differentiated co-payments, coinsurance) can regulate demand and consequently rationalize expenditures on pharmaceuticals. Finally, targeted regulatory interventions may be needed to diminish the influence of promotional activities by the pharmaceutical industry. Controlling the circulation of nonessential and poor quality drugs in the country may be a difficult but unavoidable step.

2011
FACTORS INFLUENCING OUTPATIENT PHYSICIAN PRESCRIPTION PRACTICIES IN GEORGIA Rationalization of Pharmaceutical Expenditures in Georgia

Position Paper

Georgian Insurers Association

SCOPE OF THE PROBLEM

Figure 1: Structure of the Per Capita Health expenditure (2007-2010)

Health care is under reform in Georgia. Main cause of the need for changing of health system and policy has been the rapidly increasing difference between escalating health care cost and economic sustainability of health care services. The increase of pharmaceutical expenditures has outlined the growth of GDP and other health care spending. While the pace of growth of pharmaceutical expenditures was well balanced in most Western European countries it has increased in an exponentional way in Georgia. Expenditure on health for the 4.3 million inhabitants in Georgia comprised of 10% of Gross Domestic Product (GDP) in 2010. The household health expenditure increased by 59% in nominal terms over period of three years, which amounts to 16.7% annual growth per year. Health expenditures have increased at a different pace for various services. For inpatient care, the average expenditure per head of population grew by 31%, while for outpatient services the increase was 54%. The most significant increase is seen for pharmaceuticals and medical nondurables 85%, which amounts to average annual 22.7% growth year on year10. Per capita spending for pharmaceuticals increased from 105 Gel to 194 Gel in current terms (Figure 1). It is notable that treatment costs of certain diseases as shown on the Figure 2, have increased mainly on the expense of the medicines. By this time it became obvious the countrys economic growth and the improvement of the wealth of the population does not allow for such an increase in medicines expenditure.
10

194 105 30 41 39
2007 In patient Out patient Other services

34 68 29
2010 Pharmaceuticals

Source: Health expenditure and Utilization Survey, 2010

Figure 2: Changes in the cost of outpatient treatment and medicines for selected diseases (2007-2010)
Changes in the cost of outpatient treatment and medicines for selected diseases (2007-2010)
94% 78% 43% 43% 41%

35%

Source: Health expenditure and Utilization Survey, 2010

Although later fact was recognized by health government little has taken place to rationalize pharmaceutical expenditures and to create a tool, a long-term pharmaceutical policy, which helps the explicit decision making in this field. The current paper attempts to understand what contributes towards increase of pharmaceutical expenditure in Georgia and how these expenditures can be rationalized. For this purpose Three possible contributing factors have been analyzed: Changes in Consumption Price Index

Household Health expenditure and Utilization Survey, World Bank, Curatio International Foundation, 2011

Characteristics of the pharmaceutical market Characteristics of the prescription practices

This might be partly due to an unregulated and oligopolistic pharmaceutical market11, which long has concerned policy makers.

CHANGE IN CONSUMPTION PRICE INDEX CHARACTERISTICS OF PHARMACEUTICAL MARKET

The Health Expenditure and Utilisation Survey (HUES) 2010 revealed that household expenditure in current terms increased significantly over three years from 2007. The annualised growth rate of expenditure was higher compared to general inflation. Expenditure on pharmaceuticals grew at a pace of 23.7% year on year (in current terms).

As the main characteristics of the pharmaceutical market, researchers looked at: trends of the medicine costs market penetration with Original Brands (OB) and Equivalent Lowest Price Generics (LPG) Markups on pharmaceuticals

Figure 3: Consumer price indices and drug price inflation

35,0

Trends in medicine costs

Consumer Price Index

30,0 25,0 20,0 15,0 10,0 5,0 0,0 -5,0

Over the course of one year (2009-2010) medicine price change has been observed12.
Figure 4: Unit Median Price change (GEL) 2009-2010

Medicines

Overall CPI LPG 16%

Source: State Statistics, 2009

Findings of the HUES are further confirmed with Consumer Price Index published by Geostat for general consumer goods and services and for medicines (Figure 3). Geostat data shows that price increases for pharmaceuticals far outpaced price increases for general goods and services in the Georgian economy between October 2007 October 2009.

-6%

OB

-10%

-5%

0%

5%

10%

15%

20%

Source: Price, Availability and Affordability of Medicines in Georgia, 2010, WB, Curatio International Foundation

11

Chanturidze T, Ugulava T, Durn A, Ensor T and Richardson E. Georgia: Health system review. Health Systems in Transition, 2009; 11(8):1-116.p.60 12 Price, Availability and Affordability of Pharmaceuticals in Georgia, 2010, WB, Curatio International Foundation

Alongside with OB unit median price decrease by 6%, LPG median unit price increase by 16% was noted. The price decrease has not affected the studied basket of medicines equally. In OB basket price decrease was observed in only 27% medicines, while prices increased for the remaining. A same trend has been observed for the LPG basket, where prices deceased for only 21% of medicines within the basket. Price change appears to be disproportionate for both, OB and LPG across different regions of Georgia which in its term results in unequal financial access options available to the population.
Figure 5: Unit Median Price Change (GEL) by Region 20092010
19% -8% 36% -4% 79% -5% 18% -4% 60% 6% -2%
0% 20% 40% 60% 80%

Availability of LPGs and OBs differ across

Figure 6: Percentage Change in Availability of Medicines 2009-2010

LPG

33%

OB

25%

Source: Price, Availability and Affordability of Medicines in Georgia, 2010, WB, Curatio International Foundation

Imereti Kvemo Kartli Samegrelo Kakheti Batumi Tbilisi

LPG

OB

surveyed regions (Figure 6). Samegrelo region being the most underserved has been supplied by both LPGs and OBs but at different degrees in 2010, however availability of both medicines remains lower of national average. Thus the market penetration with OB and LPGs remains uneven and is mainly flooded with OB medicines.
Figure 7: Percentage Change in Availability of Medicines by regions 2009-2010
-35% 1% -9% -14% 47% 159% 4% 4% 5% -10% 8% 4% LPG OB

-12%
-20%

Source: Price, Availability and Affordability of Medicines in Georgia, 2010, WB, Curatio International Foundation

Imereti Kvemo Kartli Samegrelo

Availability of the Original Brands (OB) and Equivalent lowest price Generics (LPG)

Kakheti Batumi Tbilisi

Apart from unequal affordability vide range differences were observed in the physical availability of medicines. According to the same research availability has significantly improved for both OB and LPG (Figure 5), but again with different degrees. 33% increase in availability of LPGs ensures LPG market penetration by 36.8% only still being lower than the OBs, while OB availability country wide accounts for 57%.

Source: Price, Availability and Affordability of Medicines in Georgia, 2010, WB, Curatio International Foundation

Markups

As described above, during past year Georgia experienced drug unit median price changes.

The same study reports that the markups do not follow the price trend.
Figure 8: Drug Price Markup Change (2009-2010)
2010 2009

Georgia. The study results report that percentage of consultations where medicine was prescribed but not purchased because it was too expensive in 2010 increased to 21.7% from 16.4% in 2007. Based on these findings it is obvious that there is a room for rationing pharmaceutical expenditures by introduction of policies that promotes cost-containment through price control mechanisms, as has been experienced by most of European countries, as well as improves access and affordability to medicines.

LPG

86% 102% 74% 96%

OB

Source: Price, Availability and Affordability of Medicines in Georgia, 2010, WB, Curatio International Foundation

CHARACTERISTICS DRUG UTILIZATION

Although the markup decreasing trend is revealed by the study for both, OB and LPGs, it is noteworthy to mention that the markup for LPGs prevails of OB by about 12% in Georgian pharmaceutical market (Figure 8).
Figure 9: Comparison of Markups in Georgia to other European Countries (2009)

In order to describe characteristics of drug utilization in Georgia and assess its potential impact on the pharmaceutical expenditures, the paper explores the following areas: Levels of self treatment Prescription behaviors Behavior of the pharmaceutical market Management of pharmaceutical benefits by private insurance industry.

Georgia Itali Greece Czech Poland Hungary 49% 46% 35% 32% 27%

102%

Self Treatment

Source: Price, Availability and Affordability of Medicines in Georgia, 2010, WB, Curatio International Foundation

The same research compares markups in Georgia to other European countries. The findings show that on average markups account to 102% in Georgia, while the lowest markup been reported is 27% in Hungary (Figure 9). High prices of medicines ultimately raise a risk of affordability in the population. This has been confirmed by the Health Expenditure and Utilizations Survey (HUES) carried out in

The number of cases of self-treatment13 captured by the HUES was significantly lower in 2010 (59.3% per 1000 population) compared with 2007 (80.3 per 1000 population) and represent only small portion (6%) of population. The mean amount spent by a self-treating individual was 20.4 Gel in 2010, which is significantly higher than the amount observed in 2007 13.4 Gel (Table 1).
13

All individuals reporting, Yes on the question Did you take any medicine or treatment for this problem based only on your own knowledge and not based on consulting a health care provider in the last 30 days? were included as self-treating.

Table 14: Mean expenditure per case of self-treatment (current Gel)

2007 HUES Population Groups Urban Rural Total population Mean Per Patient 14.9 11.5 13.4 2010 HUES Mean Per Patient 21.6 19.4 20.4

(7%) physicians take it less or more seriously into consideration when prescribing14.
Figure 11: Drug Prescription Paterns
OB LPG Brand Generic

Source: Health expenditure and Utilization Survey, 2010

24% 18% 60%

The largest portion (95%) of the amount spent on self-treatment is spent on drugs and herbal remedies and the rest (5%) on medical supplies and on diagnostic tests when performed.

Prescription behaviors

Source: Factors Influencing Prescription Practices in Georgia, 2011, Georgian Insurers Association

Inappropriate prescribing reduces the quality of medical care and leads to a waste of resources. Considering the magnitude of resources that are wasted on inappropriately used drugs, many promising interventions are relatively inexpensive. This paper looked at available evidence in Georgia to uncover level of inappropriate prescription practices.
Figure 10: Price of Medicine as a factor of Drug Choice
2% 12%

It is also noteworthy that more than half of surveyed doctors in Georgia find generic drugs excellent or satisfactory in terms of efficacy, safety and effectiveness and cheaper to their branded ones. Moreover, majority (86%) of them consider cost of medicines as an important factor for prescribing decision, but in a reality generic drugs are rarely prescribed, physicians do not prescribe generic drugs as a means to curtail expenditure (Figure 11). Obviously, such behavior is not influenced by the lack of knowledge and/or information and/or negative attitude towards generic prescribing, rather by the incentives present in the market. Low generic drug prescription can be explained by the combination of several factors such as: poorly defined government stewardship and regulatory role, namely absence of well formulated pharmaceutical policy, loosely regulated pharmaceutical sector, no restrictions for Pharmaceutical marketing, few treatment guidelines and no enforcement for utilization, diminishing role of the state in health human resource management and development, including post diploma and continuous medical education and pharmaceutical market becoming major
14

55%

31%

Not at all Important

Not very Important

Improtant

Highly Important

Source: Factors Influencing Prescription Practices in Georgia, 2011, Georgian Insurers Association

Absolute majority (86%) of Georgian physicians consider drug cost to be highly important and important factor to be well thought-out for prescription purposes (Figure 10), but only few

Factors Influencing Prescription Practices in Georgia, 2011, Georgian Insurers Association

financier of human resource development activities. Furthermore, in Georgia there are no financial incentives to motivate physicians to prescribe generics. According to the present analysis, the largest proportion of participants has more than 20 years of practical experience, thus representing more experienced sample. More than half of Physicians upgrade their professional education by attending local or international conferences and short-term course. It is notable that the Georgian Government stopped financing of CME activities for last couple of years. The state funding is no longer available neither for participation in local or international conferences, or for short-term courses in support of physicians continuous medical education. The professional associations also fall short to meet members requirements; therefore these types of educational events at a lesser degree are financed privately by doctors and more frequently by Pharmaceutical companies. Thus the pharmaceutical market using their financial leverage in support of CME may have potential influence on physicians prescription practices. The study also found that the majority of physicians in Georgia believe that a higher price of medicine imply better patient outcomes. The perceptions of physicians are that new drugs are more effective. In case of new drugs, pharmaceutical market appears to be the most powerful source of information. About half of physicians receive information about new drugs from pharmaceutical sector financed conferences, sales representatives and drug marketing materials. These data are consistent with those from other international studies, where it has been also shown that pharmaceutical sales representatives are highly influential on decisions to prescribe new drugs1516.
15

Even though adverse drug reactions may not appear very often, they do have a profound effect on a physician prescribing patterns, so doctors seek information in order to be protected and prepared. It is notable, however, that when they encounter such problems physicians rarely inform the authorities accordingly, perhaps because they either do not know who responsible authority is or do not want to acknowledge the fact that their patients had side effects. According to the finding of the study Georgian physicians mostly inform pharmaceutical companies (37%) and share information with colleagues (44%). On a positive note, the results of the same study show that one third of physicians use national and international guidelines to justify their drug selection decision. The policy makers can build on this finding and foster wider use of guidelines in order to improve treatment clinical and cost effectiveness.

Behavior of Pharmaceutical Market

Estimation of pharmaceutical market behavior patterns that influences drug utilization appears to be difficult due to the limited available information and research. However, the anecdotal evidence suggests that pharmacists are not restricted to change physicians prescription by substituting prescribed medicine with alternative, thus promoting particular brand and/or locally produced medicines. Such behavior is not regulated by the legislation, however as it appears to be well established practice in the market accepted by the customers, the policymakers can capitalize on this approach and apply for the institutionalization of the generic substitution policy.

Prosser H, Almond S, Walley T: Influences of GP's decision to prescribe new drugs the importance of who says what. Fam Pract 2003, 20:61-68

16

Jones M, Greenfield S, Bradley C: Prescribing new drugs: qualitative study of influences on consultants and general practitioners. BMJ 2001, 323:1-7.

Management of pharmaceutical benefits by private insurance industry

There has been a striking increase in the proportion of the population that is covered by health insurance since 2007. Overall, some 30% of individuals are covered by health insurance, with the state financed Medical Insurance Program (MIP), representing the majority of coverage, covering some 21% of the population as a whole and remaining 9% representing mainly group insurance in 201017. The MIP did not provide pharmaceutical benefit (PB) until summer 2010, though the government may consider expansion of PB coverage in future. This paper purposefully avoids analysis of the PB management results for MIP, as the design and administration of the latter differs from the private insurance PB management and the data available for analysis at present is not sufficient to arrive to sound conclusions. Thus this paper mainly focuses on analyzing data for private group and individual insurance.
Table 15: Average pharmaceutical expenditure per member per year in GEL for group insurance
2007 Reimbursed Co-insurance Total 31,2 10,05 41,25 2008 29,6 11,42 41,02 2009 36,2 14,4 50,6 2010 39,2 15,95 55,15

The mechanism applied by insurance industry for PB management is limited to co-insurance and negotiated discounts with pharmaceutical providers only. Indeed later are some of many other mechanisms that can manage utilization of medicines, but insufficient to ensure quality outcomes with lowest cost possible. The study on pharmaceutical prescription practices revealed that patients insured status does not influence prescription decisions. Forty two percent of surveyed physicians never take into account the patients insured status and are free in their drug selection. Furthermore, medicines are reimbursed on fee for service basis (FFS) across the board18 and the market lacks the risk sharing with physicians, the latter sets perverse incentives for prescribers to apply cost consciousness in drug selection. However, when required, physicians do consider and base their decisions on the insurance companys formulary or national essential drug list (EDL). The industry should build on this positive experience and use widely the formularies in the design and management of the PB. In summary, though insurance industry manages pharmaceutical expenditures better, still has potential for further cost containment.

Source: Georgian Insurers Association

The given analysis revealed that total average expenditure per member per year increases alongside with increased co-insurance expenditures (Table 2). However, Insurance industry manages to maintain lower annualized growth rate (11%) of pharmaceutical spending in comparison to overall pharmaceutical expenditure growth rate (26%).

SUMMARY OF ANALYSIS
This chapter attempts to summarize main factors influencing the rapid growth of pharmaceutical expenditures in Georgia. Absence of price control policy influences levels of pharmaceutical expenditure. Although overall price decrease is observed, it effected mainly OBs, while price increase is detected for LPGs. Nevertheless, medicine prices in Georgia are still higher compared to other European
18

17

Health Expenditure and Utilization Survey, 2010, WB, Curatio International Foundation

Georgian Insurers Association , 2011

countries. The declining trend is reported for medicine mark-ups as well, but it still remains significantly higher than in European countries. In the absence of state regulations, market exercises free price setting behavior. After all, the price is not the whole story. Efficiency of pharmaceutical spending also depends on appropriate prescription and use of pharmaceuticals. Inappropriate prescribing practices are widely spread affecting quality and cost of treatment. Georgian physicians give preference to low generic prescribing and rarely take into account medicine prices in their prescribing decisions. Given behavior is not influenced by the lack of knowledge and/or information and/or negative attitude towards generic prescribing, rather by incentives introduced in the market. Environment appears to be conducive for brand prescribing as the market is flooded by OBs, when their generic equivalents are less available. Furthermore, the country failed to promote utilization of treatment guidelines and ensure compliance, as well as felt short to institutionalize national EDL and continue funding of the health human resource development strategy. In the state absence this niche has been preoccupied by pharmaceutical market and used for their marketing base, thus influencing utilization and prescribing patterns in the country. Furthermore, there is a lack of financial Incentives to promote cost efficient and effective treatment. Medicines are reimbursed on fee for service basis across the board. Furthermore, there are no incentives to motivate physicians to prescribe generics. Insurance industry succeeded in lower pharmaceutical expenditure growth rates by introduction of co-insurance and negotiated price discounts from the pharmaceutical market, though underutilizes other possible cost containment strategies that could further

decrease pharmaceutical spending or contain its growth.

RECOMMENDATIONS
In this paper we have recommended approaches that we feel would establish a sound, broad-based program for quality drug use leading to better quality of care and improved cost effectiveness.
Figure 12: Cost-containment to control pharmaceutical expenditures

SUPPLY SIDE POLICIES

DEMAND SIDE POLICIES

x
Price Volume

=
Pharmaceutical Expenditure

Georgia has to implement drastic policies to cut pharmaceutical spending, or at least contain its growth. The introduction of coherent generic medicine policy for health service payers in their attempt to increase value for money in pharmaceutical spending proved to be effective in some OECD countries. They have implemented policies to promote generic uptake through substitution of brand name products with its generic equivalents as well as introduced generic pricing strategies. However in some OECD countries generic markets remained underdeveloped suggesting that appropriate economic incentives for prescribers, patients and pharmacists are lacking.

Considering the OECD experience Georgia is recommended to embark on coherent generic medicine policy, the policy, which contains supply and demand policy measures (Figure 12). The following sections presents summary of policy measures recommended. SUPPLY SIDE POLICY RECOMMENDATIONS In order to keep drug price reasonable and ensure that pharmaceutical expenditures are either decreased or maintained, different countries have used direct and indirect price regulation measures. Price control mechanisms are various, though this paper recommends only selected direct and indirect price control measures for policy makers consideration. Reference pricing - the purpose of the reference pricing is to limit the raise in pharmaceutical expenditure by introduction of a limit on pharmaceuticals that the payers will fully reimburse. The reference price is set by reference to the price of other drugs in a given category. Different mechanisms are used to calculate drug reference price: it may be based on average price of drugs in a given category, on the price of the cheapest drug, on a price of the cheapest generic drug. The patient has to pay the difference between prescribed drug price and reference price if the former is priced higher. As the public financing for the pharmaceuticals is close to minimum in Georgia, recommended reference pricing can be effectively used by the insurance industry as their cost-containment measure for pharmaceutical expenditures. Profit control is an indirect means of controlling drug prices and aims at ensuring that the firm does not make excessive profits on the pharmaceutical products. Regulation of the distribution channel through introduction of fixed mark-ups/ margins of wholesalers and pharmacies is another indirect

Table 16: Summary of Supply Policy Recommendations Policy Option Direct price control Distribution controls along supply chain Considerations Reference pricing/controls for reimbursement prices Fixed mark-ups / margins (%) wholesale/distributor, retail pharmacy Regressive mark-ups / margins (motivation to dispense lower cost generics)

measure for price control and affects the retail price of the medicines. Mark-ups that include a regressive component with or without fixed fees probably lead to better outcomes that fixed percentage mark-ups through their influence on financial incentives. However, fixed fee mark-ups can dramatically increase the price of otherwise low-cost medicines. Indirect price control measures are mostly those that should be endorsed by the state. Regulation of mark-ups as part of a comprehensive price regulation strategy probably will lead to reduced medicine prices. However, regulation of mark-ups without regulation of either the manufacturers selling price or the retail selling price is unlikely to lead to reduced medicine prices.

DEMAND SIDE POLICY RECOMMENDATIONS

Essential drug lists and formularies - Access to clinically relevant up to date, user specific, objective and unbiased information is essential for appropriate medicine use and basic requirement for rational prescription practice. Furthermore, formularies may be used to drive choice to lower cost drugs by structuring a sliding scale of co-payments favoring cheaper products or those for which there is a preferential agreement with the manufacturer.

Some financiers may also categorize drugs according to their essentialness and determine the level of reimbursement the plan will provide and the portion that the patient is expected to pay. Formularies may also segment drugs into categories for which a prior authorization is needed. This is usually done to limit the use of a high cost drug or one that has potential for inappropriate use (sometimes called off-label as it involves using a product to treat conditions other than those for which its license was granted). In this circumstance a health care provider would have to seek permission to prescribe the product or the pharmacist would have to obtain permission prior to dispensing it. Generic Substitution - Generic medicines play a key role in ensuring the affordability and sustainability of healthcare systems. Encouraging competition in the pharmaceutical market through increasing the use of generic medicines both promotes cost containment and stimulates the innovation needed to provide added value products. The generic medicines industrys major contribution to healthcare involves the provision of high quality, cost-effective treatment for many of todays most common chronic illnesses and conditions, such as cancer, diabetes, depression and high blood pressure. Providing sustainable treatment for these illnesses, which are particularly prevalent in older patients, will become increasingly difficult as Georgias population ages. In fact, the rapidly ageing population, the increase in the prevalence of certain diseases and the rise in prices for original brands are creating a critical need for higher volumes of more affordable generic medicines. Introduction of generic substitution will enable pharmacists to fulfill a prescription for a branded medicine by dispensing an equivalent generic medicine. Provision will be made to allow the prescriber to opt out of substitution

where, in his clinical judgment, it is appropriate for the patient to receive a specific branded medicine. In these circumstances, the named brand must be dispensed. Provision may also be made to exclude certain categories of medicines for clinical reasons in the interests of patient safety.

Influencing Prescription Decisions Prescription decisions can be influenced through introduction, training and monitoring of adherence with the clinical guidelines, application of different incentive methodologies designed specifically for prescribers and patients. Guidelines are consensus statements developed to assist clinicians in making decisions about treatment for specific conditions. They are systematically developed on the basis of evidence and aim to promote effectiveness and efficiency of healthcare delivery. To promote the development and use of guidelines, a designated body should exist in the country and be charged with the function of monitoring the implementation of such guidelines. Incentive structures relate primarily to targeting the prescribing behavior of physicians, the dispensing patterns of pharmacists and consumer behavior. Physicians responsible for generating demand for medicines through prescribing may respond positively to the entry of generic drugs, but they are not always sensitive to price. As a result, influencing the way they prescribe can significantly influence overall generic prescribing, and can be achieved by providing them with financial or/and nonfinancial incentives. Physicians have been provided financial incentives to prescribe cheaper alternatives in different ways: they may receive per capita funding for their patients and be allowed to keep savings achieved through economic prescribing, as it was a case for some physician groups in United States or GP fund holders in

UK. They may be financially rewarded by extra payments if they reach targets of generic prescribing, as defined by Pay for Performance (P4P) schemes. Financial incentives include prescribing budgets and provide an explicit incentive to contain costs, which, in turn, encourages generic prescribing. The incentives in this case may be structured to reward physicians who under spend, or penalize those who overspend, or both. The international experience suggests that unless budgets are fixed and linked to clear and enforceable rules, they are unlikely to work. Non-financial incentives affecting physician prescribing include promotion of generic prescribing, prescription monitoring, audit, and the use of clinical guidance and IT to influence prescribing decisions. It is unclear what effect nonfinancial incentives and measures have in practice, but it is thought that unless they are vigorously implemented and monitored, their effectiveness is likely to be poor19. In order to Influence the demand from patients effective incentives should be introduced. Incentives for patients depend on out of pocket payments. The way user charges are designed is likely to influence the generic take-up when patients have a choice. Patients have a financial interest to choose cheaper drugs when the copayment is a co-insurance rate (expressed as a percentage of price), when fixed co-payments are lower for generic drugs (tired copayments). Some countries have supplemented existing incentives with higher co-insurance rate for brand named medicines for which cheaper generic substitutions are available20.

Strict Control - Policymakers can improve health care quality and reduce its costs by restricting inappropriate drug industry marketing tactics that undermine the objectivity of doctors, hospitals and other health care providers. Evidence suggests that direct-to-consumer advertising of prescription drugs increases pharmaceutical sales and both helps to avert underuse of medicines and leads to potential overuse21.

Table 4: Summary of Demand Side Policy Recommendations Policy Option Defining the market: listing systems and formularies Considerations Positive lists for reimbursements, essential drug lists Generic prescribing and substitution policies Guidelines, protocols Financial and non-financial Incentives Auditing and benchmarking Proportionality to the final price Fixed charge per prescription Annual deductible amount Drug promotion, marketing, education, sponsorship gifts to doctors.

Influencing the prescribing behavior Influencing the demand of patients e.g. cost-sharing, co-payment levels can be defined Strict Control

19

Choutet P, Crochet B, et al. The effect of RMO/medical guidelines based on a critical assessment of antibiotic drug prescription. Mdecine et maladies infectieuses 2000;30(3)Supplment:185s192s 20 Value for money in health spending, OECD Health Policy Studies, 2010.

Intense marketing increases costs because new and expensive drugs are promoted more heavily than lower cost drugs that are equally or more effective. The enduring increase in prices of prescription drugs is directly related to marketing by pharmaceutical companies in the world. The international evidence suggests that calls for a moratorium on such advertising for new drugs would represent a dramatic departure from current practices.
21

Julie M. Donohue, Ph.D., Marisa Cevasco, B.A., and Meredith B. Rosenthal, Ph.D. A Decade of Direct-to-Consumer Advertising of Prescription Drugs, N Engl J Med 2007;357:673-81.

The Policy makers can provide leadership in several ways: as large-scale purchasers of drugs, as providers of medical education in medical schools, as industry regulators, and as influential leaders in health care policy. It is now up to government to face the generics challenge head on. They can do this by implementing pro-generics policy measures particularly in the area of pricing and reimbursement, while better informing doctors, pharmacists and patients about the benefits of generic medicines.