The effectiveness of pharmaceutical tenders as a cost containment mechanism: analysis through the Synthetic Control Method. The case of Andalusia (Spain)

Abstract

Background: Outpatient pharmaceutical tenders are not a widespread measure. In Spain, the sub-central government of the Andalusian region is the only Spanish health administration to have applied them. Objective: This work aims to evaluate the effectiveness of this measure in reducing public pharmaceutical expenditure during the period it was in force –from June 2012 to December 2020. Methods: We use the Synthetic Control Method (SCM), which estimates a counterfactual (synthetic) value for our variable of interest (outpatient pharmaceutical expenditure per capita) based on a set of predictor variables from a combination of units from the potential control group (in this case, the rest of the regions in Spain). Results: The results of the SCM show no evidence that the pharmaceutical tender implemented in Andalusia reduced pharmaceutical spending. Statistical tests show that the null hypothesis of no differential effect of the measure on pharmaceutical spending during the period in which it was in force cannot be rejected. These results are robust to various robustness tests. Conclusions: Public tenders for outpatient pharmaceuticals in Andalusia did not prove effective as a mechanism for controlling public expenditure during the period it was in force and failed to lead to a reduction in expenditure when compared to the rest of the regions in Spain, which did not apply it.