Counting the savings: impact of Georgia's drug policy interventions on households

Abstract

Introduction: Access to essential medicines is crucial for achieving the Sustainable Development Goals and Universal Health Coverage. In Georgia, as in many low- and middle-income countries, out-of-pocket payments (OOPs) for medicines remain a major financial burden, particularly for low-income households. Despite the launch of Georgia's Universal Health Coverage Program in 2013, medicines still constitute the largest share of OOP health expenditures, increasing the risk of impoverishment. This study, therefore, aims to assesses the impact of three pharmaceutical policy interventions introduced between 2017 and 2023 on monthly household drug expenditures.

Methodology: The analysis utilizes pooled data from Georgia's Household Income and Expenditure Surveys (2015-2023), covering over 88,000 households. Interrupted Time Series (ITS) analysis was employed to evaluate the effects of three policy actions: the 2017 drug reimbursement plan, the 2022 introduction of parallel imports from Turkey, and the 2023 implementation of external reference pricing. Regression models accounted for seasonality and complex survey design, including weights and clustering. Monthly median drug expenditures were adjusted to January 2015 prices.

Results: Only after the introduction of external reference pricing policy in 2023 a significant reduction was observed - an immediate drop of 6.96 GEL (2.51 USD) per household (p = 0.016) and a monthly decline of 1.28 GEL (0.46 USD) (p = 0.002), representing a 29% decrease and saving Georgian households approximately 43.3 million GEL (15.59 million USD) in 2023. The 2022 parallel import policy led to an initial decrease (2.26 GEL; p = 0.39) but was followed by a significant increase over time (coefficient = 1.43, p < 0.001).

Conclusion: Addition of external reference pricing policy significantly reduced household pharmaceutical spending and shows promise as a policy tool for other low- and middle-income countries. However, sustained impact requires continued monitoring and complementary measures to ensure equitable access and long-term benefits.

Fig. 1

Evolution of drug reimbursement plan (DRSCC) budget and beneficiary population. Source: NHA, 2024

Fig. 2

Inflation Index for healthcare groups 2017–2023. Source: CIF, Inflation on healthcare with a focus on pharmaceuticals, 2024.

Fig. 3

Share of OOP spending on health care spending groups. Sources: HIES, NHA, GeoStat, 2024

Fig. 4

The influences of policy changes on the HHs median monthly expenditure on drugs over the study period