Drugs make up a major part of the amount of money spent on health care. Today, figures from across the world show that the amount spent on drugs is increasing. Spending more on drugs could mean less money for hospitals, doctors or even schools and other non-health care services. There is, therefore, pressure to control the costs of drugs while maintaining the quality of health care or avoiding the increase in the use of health services.One way for governments, non-government agencies and health insurance companies to try to control drug spending is to influence those who prescribe drugs through financial incentives. This review is about two types of financial incentives that directly affect prescribers: drug budgets and performance based payments (e.g. bonuses or fines to improve prescribing and reduce costs). We included 13 studies from the UK, Ireland and Germany that evaluated budgets, but no studies that evaluated performance based payments.
Budgets are funds that are allocated by payers to a group of or individual physicians, thereby giving them financial responsibility for the management of their own budget. Budgets provide incentives to prescribers to prescribe fewer and less expensive drugs (such as generic drugs). This review found that in these three countries drug spending (per item and per patient) and the volume of drugs prescribed decreased, with more prescribing of generic drugs. There was no clear evidence about the effects of budgets on health care utilization (such as referrals to specialists). The effects on health were not reported in the studies. Overall the evidence for the effects of budgets is weak.