, Volume 30, Issue 11, pp 1051–1065 | Cite as

A 3-Dimensional View of Access to Licensed and Subsidized Medicines under Single-Payer Systems in the US, the UK, Australia and New Zealand

  • Rajan Ragupathy
  • Katri Aaltonen
  • June Tordoff
  • Pauline Norris
  • David Reith
Original Research Article


Introduction: Patients’ access to medicines can be profoundly affected by the decisions made by medicine licensing bodies and public reimbursement agencies. The present study compares access to licensed and subsidized medicines under a single-payer system in each of the US, the UK, Australia and New Zealand (NZ). These systems are the US Department of Veterans Affairs National Formulary (VANF), the UK NHS for England and Wales, Australian Pharmaceutical Benefits Scheme (PBS) and NZ’s Pharmaceutical Management Agency (PHARMAC). The VANF, PBS and PHARMAC all use positive lists of medicines that are subsidized, along with pharmacoeconomic analysis and price negotiations with suppliers. The NHS uses a negative list of medicines that are not to be subsidized, along with pharmacoeconomic analysis of a small number of medicines and caps on manufacturers’ profits.

Objective: Our objective was to compare licensed and subsidized medicines in terms of the following: (i) total numbers of entities (unique Anatomical Therapeutic Chemical [ATC] codes); (ii) times since first registration (age) of the entities; and (iii) numbers of innovative entities.

Methods: This was an observational study in order to test pre-defined hypotheses. All products listed in a major prescribing reference in each country were included in the study. All products were classified by ATC code and their registration dates recorded. Products were collapsed by ATC code to determine ‘best-case’ licensing and subsidy for each entity, along with the date of first registration. Innovative entities selected for ‘fast-track’ approval by the US FDA or as a ‘breakthrough or substantial improvement’ by the Canadian Patented Medicines Prices Review Board were identified. Results were verified by a sensitivity analysis that excluded entities only available in injectable formulations (as these may not always be listed in general prescribing references), and by a parallel analysis done by active agent rather than ATC code.

Results: Of the 918 entities and 64 innovative entities licensed in the US, 505 and 20, respectively, were subsidized by the VANF. In the UK, this was 1020 and 58 (1016 and 58 NHS subsidized); in Australia, this was 879 and 49 (567 and 30 PBS subsidized); and in NZ, this was 765 and 39 (503 and 19 PHARMAC subsidized). With the exception of the UK, entities licensed in the US were newer than elsewhere. The median ages were as follows: 6607 days in the US (VANF subsidized 8203 days; p<0.001); 7319 days in the UK (NHS subsidized 7319 days; p=0.903); 7795 days in Australia (PBS subsidized 8065 days; p=0.406); and 8936 days in NZ (PHARMAC subsidized 10724 days; p < 0.001). NHS subsidized entities were newer than elsewhere. VANF and PHARMAC subsidized entities were significantly older than licensed entities in their respective countries.

Conclusion: The single-payer systems examined differ in the number and age of licensed and subsidized entities, along with access to innovative entities. The NHS subsidized the most entities, the newest entities and the most innovative entities. NZ’s PHARMAC system subsidized the fewest and oldest entities, and the fewest innovative entities. The VANF and PBS consistently fell between the other two systems in terms of the number of subsidized entities, age of subsidized entities and number of subsidized innovative entities.


Pharmaceutical Benefit Scheme Pharmaceutical Benefit Advisory Committee Pharmaceutical Price Regulation Scheme Australian Pharmaceutical Benefit Scheme Pharmaceutical Management Agency 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.



Funding used for the study and the preparation of this paper: Rajan Ragupathy completed this research as part of PhD study, during which he received an interest-free student loan from the NZ Government, a University of Otago School of Pharmacy stipend for living costs and course fees, and School of Pharmacy and Division of Health Sciences grants for attending conferences. The University of Otago receives PhD student funding from the NZ Government. Katri Aaltonen received personal research grants (for salary) from the Finnish Cultural Foundation.

The funding organizations had no role in any of the following: the design and conduct of the study; collection, management, analysis and interpretation of the data; or preparation, review and approval of the manuscript.

Relevant conflicts of interest: Innova Software provided complimentary copies of the Australian Prescription Products Guide for use in the study, but had no other involvement in the study. (The use of the Australian Prescription Products Guide as a data source was decided on in advance of the offer of complimentary copies.)

Rajan Ragupathy is employed by Waikato District Health Board (DHB), part of NZ’s health system, as a clinical trials pharmacist, a role that involves dispensing medicines for trials conducted on behalf of various pharmaceutical companies. (Waikato DHB had no involvement in this study, and the analysis doesn’t represent the position of Waikato DHB.) Katri Aaltonen received maternity leave payments from Orion Pharma in Finland (these are obligatory employer payments under collective labour agreements) and unpaid leave of absence. June Tordoff was a member of the Zenith Technology Ethics Committee (nominal remuneration) until 1 July 2010. Zenith Technology undertakes bioequivalence studies of generics versus originator brands in healthy volunteers.

The authors’ spouses, partners and children have no financial relationships that may be relevant to this work. None of the authors have non-financial interests that may be relevant to this work.

Contributors not named as authors: Larissa Young and Francis Lawes (undergraduate pharmacy students) collected licensing information in the US. Gerald Sides (research assistant) checked a 3% sample of registration dates.

Authors’ contributions: All authors jointly contributed to the development of the research hypothesis, analysis of the data and the writing of the manuscript. Rajan Ragupathy collected licensing and subsidy information for the UK, Australia and NZ, and subsidy information for the US VANF. Rajan Ragupathy and Katri Aaltonen coded products by ATC code. All authors gave final approval for the manuscript. Rajan Ragupathy is the guarantor for the overall content of this paper.


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Copyright information

© Springer International Publishing AG 2012

Authors and Affiliations

  • Rajan Ragupathy
    • 1
  • Katri Aaltonen
    • 2
  • June Tordoff
    • 1
  • Pauline Norris
    • 1
  • David Reith
    • 3
  1. 1.School of PharmacyUniversity of OtagoDunedinNew Zealand
  2. 2.Faculty of Health SciencesSchool of Pharmacy, University of Eastern FinlandKuopioFinland
  3. 3.Dunedin School of MedicineUniversity of OtagoDunedinNew Zealand

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