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Affordability and Sustainable Healthcare in Europe

As Europe’s population grows older and demands for healthcare provision increase, Europe is facing a nightmare scenario of rapidly increasing healthcare costs. Increasing the use of affordable generic medicines offers a partial solution to the problem ...

Ageing populations, rising healthcare costs

As Europe’s population grows older and demands for healthcare provision increase, Europe is facing a nightmare scenario of rapidly increasing healthcare costs.

According to studies from the EU Economic Policy Committee, on the “Budgetary challenges posed by ageing populations”(1), due to the growing number of elderly people amongst Europe’s population, the number of working age citizens contributing to social service funds is rapidly diminishing, while conversely, the number of elderly citizens is rising. It is estimated that by 2050 there will be only two working age citizens for each elderly person in the EU, instead of the current four(2). This demographic phenomenon is clearly illustrated in the following graph:

Active and Inactive Citizens in Europe (millions)
“...only two working age citizens for each elderly person.”

Source: EPC | Working age population refers to persons aged 15 to 64.
Elderly population refers to persons aged 65 and above.

“How do we pay for the young and the elderly?”

This increase in the number of beneficiaries of public healthcare services and the decrease in those contributing to its financial support is coupled with the fact that, as seen in the graph below from the Economic Policy Committee’s report, citizens aged 65 and over account for 30% to 40% of healthcare spending—far more than any other population group. And the situation is roughly similar across Europe: “... expenditures per person increase with age, and are particularly high for the oldest age groups ...” (3)

EU Healthcare Spending & Use of Medicines by Age Group
“...the budgetary impact of ageing is substantial.”

Spending rises rapidly from age 65 | Source: EPC

The report continues to warn EU policy-makers that public spending on healthcare will rise by 4% to 8% of GDP over the next few decades, and insists “...that the budgetary impact of ageing is substantial, making it more difficult for Member States to comply with the budgetary requirements of EMU.” (4)

Generics offer a solution

One readily available solution to these problems is to be found, in part, in increasing the use of generic medicines. These competitively priced therapeutic equivalents to patent expired originator pharmaceuticals have demonstrated they possess the same quality, safety, and efficacy as their originator products, and they go through the same regulatory procedures. The only difference is their price, which is typically 20% to 90% below that of brand-name originator pharmaceuticals.

(1) Economic Policy Committee (EPC), “Budgetary challenges posed by ageing populations: the impact on public spending on pensions, health and long-term care for the elderly and possible indicators of the long-term sustainability of public finances”, Brussels, 24 October, 2001 (EPC/ECFIN/630-EN final).
Available on-line.

(2) EPC., pp. 3-4.
(3) EPC, pp. 8-9.
(4) EPC, pp. 8-9.