ABC analysis: a tool of effectively controlling pharmaceutical expenditure in Greek NHS hospitals

Abstract

Objectives The technical cost analysis, in order to highlight expensive medicines, is an important factor in the administration of health units. The purpose of the study is to analyse the annual pharmaceutical expenditures in NHS hospitals and to investigate the therapeutic categories requiring greater supervisory, for years 2013–2014. Methods The study was conducted at 19 public hospitals (9900 beds) and the data of annual consumption and expenditure incurred on each medicine using ATC classification were collected via observe.net web system and then arranged in descending order based on the Pareto principle. Key findings ABC analysis revealed that 21% (J, B, L) items (at ATC‐1 level) represented class A amounting for nearly 80% (91 150 641 euros) of annual NHS pharmaceutical expenditure. Furthermore, approximately 9% (30) items (at ATC‐4 level) represents class A, accounting for nearly 70% of annual pharmaceutical expenditures for year 2013, and 11% of items are responsible for nearly 80% of cumulative ADE for year 2014. Conclusions The inventory control is an effective measure for cost management of pharmaceutical expenditure by identifying the drugs requiring stringent control for rational use of funds in public hospitals.

Clinical and Financial Implications of Medicine Consumption Patterns at a Leading Referral Hospital in Kenya to Guide Future Planning of Care

“…A sample size determination was not conducted for the ABC, VEN, and TC analysis since this was an annual expenditure study, and every record was included in the analysis to obtain the most accurate expenditure and consumption data (medicine type by ATC class as opposed to utilization broken down by defined daily doses) as possible. This is in line with previous publications (Migbaru et al, 2009; Anand et al, 2013; Kumar and Chakravarty, 2015; Kastanioti et al, 2016; Mousnad et al, 2016).…”

“…Junita and Sari in Indonesia reported similarly that from 336 different medicines, 26 medicines (7.74%) consumed 70.84% of the annual drug budget (Class A), 37 medicines (11.01%) consumed 19.23% of the annual drug budget (Class B), whilst the majority of items (273 medicine types – 81.25%) accounted for only 9.93% of the drug budget (Class C) (Migbaru et al, 2009; Junita and Sari, 2012). Kastanioti et al in their study in Greece also found that approximately 9% (30 medicines types) accounting for nearly 70% of annual pharmaceutical expenditure in 2013 (Class A), whilst only 11% of items were responsible for nearly 80% of cumulative pharmaceutical expenditure in 2014 (Kastanioti et al, 2016). Similalry in the Sudan National Health Insurance Fund programme, Mousnad et al found that only a small number of medicine items ( n = 80, 16.98%) accounted for largest proportion of annual expenditure (70.19% – Class A), whereas a large number of items ( n = 288, 61.15% – Class C) accounted for only 9.92% of total annual drug expenditure (Mousnad et al, 2016).…”

“…As a consequence of this, medicines belonging to Class A require more stringent managerial control, including assessing the appropriateness of prescribing within finite budgets, which is similar to activities in Europe for new premium priced medicines (Godman et al, 2014a, 2015, 2016; Kastanioti et al, 2016; Mousnad et al, 2016; Jakupi et al, 2018), as well as accurate data to drive forecasting of future demand, building on examples in other countries (Wettermark et al, 2010; Eriksson et al, 2017). Alongside this, close and frequent checks on budgets and stock levels as well as judicious purchasing, issuing of and inspection of medicines prescribed.…”

“…Alongside this, close and frequent checks on budgets and stock levels as well as judicious purchasing, issuing of and inspection of medicines prescribed. It is with Class A medicines that the hospital can make maximum savings with its budget if pertinent with a reduction in the use of less cost-effective medicines in this category (Holloway and Green, 2003; Kastanioti et al, 2016; Mousnad et al, 2016). This may mean looking at issues of disinvestment in some categories (Parkinson et al, 2015; Brett et al, 2017; Guerra-Junior et al, 2017).…”

A systematic review of pharmaceutical price mark-up practice and its implementation

“…31 Similarly, in Canada and Greece, the wholesalers are restricted by a fixed margin, but the retailers are not tied to any format of fixed or regressive fixed fee. 32 , 33 In Canada, drug prices are regulated by federal and provincial governments. Mark-up policies were introduced under the National Prescription Drug Utilization Information System plan.…”