A Glimpse of Pricing and Reimbursement in the UAE
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1 ISPOR Arabic Network Forum United Arab Emirates Ministry of Health PROS & CONS OF PRICING AND REIMBURSEMENT SYSTEMS IN SAUDI ARABIA, EGYPT, UNITED ARAB EMIRATES, QATAR AND JORDAN A Glimpse of Pricing and Reimbursement in the UAE Dr. Ola Ghaleb Al Ahdab, PhD President, ISPOR UAE Chapter A Glimpse of Pricing and Reimbursement in the UAE Pharmaceutical Advisor, Registration and Drug Control Dept. MOH, UAE Assistant Professor of Pharmacy Practice, College of Pharmacy at Sharjah University & Ajman University of Science and Technology Visiting Post Doctoral Research Fellow, School of Pharmacy, Queens University of Belfast, NI, United Kingdom Vice-President for Pharmacy Society, Emirates Medical Association ola.ghaleb@eim.ae Outline About UAE Health care system in the UAE Pricing & Reimbursement Challenges Key Drivers Cons for pricing & reimbursement regulations Recommendations
2 Abu Dhabi Dubai UAE ISPOR Arabic Network Forum, 2-6 Jun 2012, DC, USA. United Arab Emirates: Demography Location: Middle East, Arabian Gulf region. Total area: 83,600 sq Kms, the 3rd in GCC after KSA & Oman UAE consists of seven states, termed emirates: Abu Dhabi (the capital), Dubai, Sharjah, Ajman, Umm al-quwain, Ras al- Khaimah and Fujairah Population: more than 5.5 million population at a growth level of 5.6% (2009)
3 UAE: Facts & Figures Total life expectancy 1 at birth(2007) 76.9 years (75.6 M & 78.6 F) Age structure : 0-14 years: 20.4% years: 78.7% 65 years and over: 0.9% Total GDP = $bn (2010 est= : $ bn) GDP per capita 1 : 45,361 US$ Population share in GCC= 12% & health care expenditure =20% Health expenditures: 2.8% of GDP (2009) Drug expenditure 2 (2008): $bn Drug expenditure per capita 2 (2008): 280 $ 1. WHO (BMI 2009) Health Care System in the UAE 1. Regulators: Ministry of Health & LHAs (HAAD & DHA) 2. Providers A. Governmental Sector Ministry of Health Local health authorities Abu Dhabi Health Services Company [(SEHA)/HAAD] & DHA Military & Police sector has their own clinics and hospitals Oil Companies have their own clinics and hospitals B. Private sector C. Free Medical Zones: Dubai Health Care City 3. Health Insurance 35 health insurance companies UAE Profile, ISPOR Arabic Network Forum, 2-6 Jun 2012, DC, USA
4 GCC Health Care Expenditure 2007& & 2009 Health Expenditure Landscape
5 Drugs Expenditure Share of Health Care Expenditure (2007) 22% UAE 2007 OECD 2008 BMI 2008 Facts and Trends UAE is one of the most organized and fastest growing health care markets in GCC One of the most attractive markets to pharmaceutical manufacturers for establishing regional offices and warehouses Industry is fuelled with latest technology Government operates the majority of hospitals in the UAE The UAE s MOH has mandated all facilities to achieve JCI accreditation Invited international service providers to manage its facilities and aid higher standards in service delivery i.e. (Cleveland Clinic, Johns Hopkins Medicine, Medical University of Vienna) Private sector participation has increased over the years
6 Health Insurance Abu Dhabi ( HAAD & SEHA): 2006 Mandatory health insurance for firms with more than 500 expatriate workers 2007 Law extended to all expatriates 2008 Law extended to the UAE nationals 2012: 99% coverage Dubai ( DHA): Compulsory health insurance by : 50-55% coverage Other Emirates (MOH): Compulsory health insurance proposed by 2014 Non nationals: Costs will be shared between employers and employees Nationals: Government or Government and employers Pricing UAE MOH is responsible for setting medicine prices in the UAE Current pricing criteria: Reference-based pricing Average/comparative pricing Profit Control: Wholesaler (10-20% of CIF) Pharmacy margins (16-22% of WSP) Banning bonus on pharmaceutical products MOH initiative: Price reduction New pricing Criteria (soon) CIF Unification & Dollarization at GCC level
7 Pricing & Reimbursement Process Contract between pharmacies and insurance companies with discount range from 5-10% Pharmacy could be different completely from treating facility Pharmacy claims billed separately from other visit /services invoices Cost variation in other services/ interventions between facilities Pharmacy Benefit Manager (PBM) HAAD has mandated that all health insurers in Abu Dhabi are required to implement PBM in June 2012 Qualification/ URAC Accreditation by April 2012 The PBM initiative, aims to have all pharmacies within Abu Dhabi seek an automated preapproval from insurers on prescribed medication using Shafafiya HAAD s dedicated transaction platform for health care operators and insurers
8 Major Drivers / Influencers Growing population in terms of size and life expectancy Lifestyle-related diseases are highly prevalent in the UAE Diabetes: the UAE ranks tenth globally for prevalence Obesity: Over 40% of population obese. Hypertension : 27% of the population Osteoporosis in women: high prevalence linked to severe vitamin D deficiency Key Drivers/ Influencers and Trends The health reform and compulsory insurance system Medical tourism: The UAE is the hub of GCC Regulatory enhancements by MOH accelerating the innovative products to access UAE market/ fast track MoH Health information system, Wareed (April 2011) Projects are in progress among all health care providers ( new hospitals in Ajman, RAK) and Abu Dhabi, worth USD5.7 billion
9 Challenges: Reimbursement System 80% of pharmaceuticals are imported New system & lack of expertise Automation/ E prescription IT systems modifications New regulations and mandates Local/ regional research In service training Pricing & Reimbursement Recommendations: Single patient record at national level New pricing and reimbursement Price reduction/ CIF Unification and Dollarization at GCC Value based pricing & Risk- sharing agreements Increase pharmacy profit in segments & Profession fees Standardizing process and health intervention costs Research culture In service training about Insurance regulations and claiming requirements Electronic transaction of claims (e-claims) Coding system (ICD & CPT Codes) Inclusion and exclusions Pre-authorization (approval) rules for each individual insurance company
10 United Arab Emirates Ministry of Health Thank you Ola Ghaleb Al Ahdab, PhD President, ISPOR UAE Chapter
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