The Pharmaceutical Market: Italy

The size of the Italian population ensures that the Italian pharmaceutical market remains the fourth largest in Europe despite the market having the lowest growth rate of all the developed economies. Whilst the overall population is declining, the ratio of those over 65 years of age has already reached 20.0% and is set to rise still further with a corresponding increase in chronic and long term medical conditions. This will inevitably increase demand for pharmaceutical products, placing additional financial strain on the working population to support those of pensionable age.

Italy's healthcare system was recently rated as the second best in the world by the World Health Organisation. However, the national health service, which is the dominant provider of care, is struggling to cope with rising costs, long waiting lists and poor management systems. A system whereby the regions are responsible for health service delivery, whilst central government remains responsible for the distribution of funds has resulted in mounting deficits in certain areas of the country.

The Italian government continues to introduce cost-containment measures in an effort to limit increases in pharmaceutical expenditure. Since 2003, a limit has been set on the proportion of SSN healthcare expenditure that may be spent on pharmaceuticals: prior to 2008, the limit was 16.0%, of which 13.0% retail pharmacy expenditure and 3.0% hospital expenditure. In the 2008 budget, the limit was set at 16.4% of total SSN healthcare expenditure including co-payments. A reference pricing system was introduced in 2001 and generic prescribing is actively encouraged.

Italy is currently in an economic recession, which is expected to last throughout much of 2009. GDP is expected to contract by 0.4% in real terms in 2008 and by a further 1.0% in 2009.