What’s driving prescription drug expenditures down in England?

In financial year (FY) 2018/19, National Health Service England (NHSE) spent almost £8 billion on drugs prescribed by general practitioners to their patients. This level of expenditure has decreased by nearly 2.7% from FY 2017/18.

The reduction in prescription drug expenditure is driven by a combination of lower average costs and lower levels of activity. The per person per month (PPPM) costs for central nervous system, endocrine and respiratory conditions have decreased, largely driven by a reduction in the average cost per item. Cardiovascular system drugs, however, have experienced a PPPM increase driven by a 3.2% increase in cost per item.

In this paper, Milliman’s Joanne Buckle and Tanya Hayward investigate the drivers of the PPPM trend at a drug class and regional level using actuarial principles.

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