Cimetidine and the cost of peptic ulcer in the Netherlands

In the autumn of 1977 the first histamine H2 receptor antagonist, cimetidine, was introduced into the Netherlands. Histamine H2 receptor antagonists are powerful suppressors of the stomach's production of hydrochloric acid, which is believed to play a major role in the development of peptic ulcers. Controlled clinical trials and interview with medical experts prior to the introduction suggested that the new drug might make treatment of peptic ulcer less costly. In particular, savings in hospital treatment, the major component of medical care cost (i.e., direct cost) seemed possible. The manufacturer of cimetidine, Smith, Kline and French Laboratories SA, commissioned the Netherlands Economic Institute to estimate the impact of cimetidine on the direct (medical care) cost of peptic ulcer in the Netherlands in 1980, with special reference to hospital costs. In this study the term 'cost' refers to aggregate expenditure by sick funds, insurance companies and private individuals. It was found that hospital treatment cost at constant (1980) prices declined by 61.6 million Dutch guilders, or 49%, over the chosen reference period, 1972-1980. Multiple regression analysis showed that a linear trend factor and other factors appearing to operate from the mid-seventies (possibly including the introduction of diagnostic endoscopy and government cost containment policies) together accounted for about three quarters of the reduction of costs. The remaining one quarter, Dfl. 15.7 million, was specifically attributable, with acceptable confidence, to the availability of cimetidine. In particular, the number of vagotomy and partial gastrectomy operations significantly dropped in the three years following its introduction. The saving more than compensated for a substantial increase in the drug bill, leaving a net benefit of Dfl. 3.2 million in 1980. This is likely to be an underestimate of net benefit since the cost of cimetidine prescribed for those not at risk of hospital admission was included while any benefits from cimetidine use in general practice had to be excluded for lack of data. The decline of hospital costs, the increase of drug costs and the growth of diagnosis/consultation costs, the latter largely attributable to the introduction of endoscopy, led to a dramatic change in the cost structure of peptic ulcer treatment between 1972 and 1980.(ABSTRACT TRUNCATED AT 400 WORDS)