Introduction

Substantial economic resources are devoted to healthcare across Europe, but there is evidence that a large proportion of these resources do not benefit patients or society.

^{_{Around 10% of European Gross Domestic Product (GDP) is spent on healthcare (OECD, 2018) and estimates suggest that as much as one-fifth of this amount (2% of GDP) is spent on interventions that make no meaningful contribution to health outcomes (OECD, 2017b). In economic terms, these resources are used inefficiently.}}

Improving the efficiency of European healthcare is in the interest of many stakeholders: governments, payers, providers, patients, and the life sciences industry. Identifying and reallocating inefficient spending would allow for better care, greater access to innovative treatments, and superior outcomes within existing budgets. However, identifying specific inefficiencies is challenging, in part because it is usually difficult to know the ‘counterfactual’: what the costs and outcomes of an alternative strategy would have been. This challenge is magnified by the diversity of populations and health systems in Europe, from universal public systems to social or private health insurers, which makes direct cross-country comparisons difficult.

To help address the challenge of improving efficiency in European healthcare, EFPIA commissioned the Office of Health Economics (OHE) and the Institute for Health Economics (IHE) to:
• Develop a comprehensive conceptual framework to define health care inefficiencies;
• Generate actionable insights for policymakers by identifying clear examples of inefficiency;
• Estimate the scale of the potential savings and health gains that could be realised by addressing specific inefficiencies.