Assessments and recommendations

Despite noticeable improvements over the last decades, Latvia is facing a considerable public health challenge: life expectancy is low, the burden of non-communicable and infectious diseases is high, and risk factors such as smoking, alcohol consumption and obesity are highly prevalent. Latvia has the lowest life expectancy in the OECD, at 74.9 years versus the OECD average of 80.7 years, and the third highest level of treatable mortality in the EU, with more than half of it attributable to cardiovascular diseases.

Patterns of unhealthy behaviour in Latvia add to concerns about population health, both now and in the future. Tobacco consumption among Latvian women is around the OECD average (14.5% in 2014 in Latvia, when latest data is available, versus 13.9% in the OECD), but tobacco consumption among Latvian men is among the highest in the OECD with 36% of men smoking daily, compared to 22.3% on average in the OECD. Latvia has a relatively high alcohol consumption, at 12.6 litres per capita per year, compared to 8.8 litres in the OECD on average. This is equal to about two and a half bottles of wine per week, or ten pints of beer. Latvians are also more likely (59%) to report binge drinking than the OECD average (43% report drinking at least 60 grammes of pure alcohol at a single occasion in the 30 days prior).

In the face of these considerable public health challenges, the time to act is now. However, Latvia is operating within an extremely tight budget for health policies and services. Latvia has one of the lowest levels of health spending in the OECD, both in terms of per capita expenditure – USD 1 924 (adjusted for purchasing power parity, or PPP) in Latvia compared to the OECD average of USD PPP 4 170 – and as a percentage of GDP: 6.2% in Latvia, compared to the OECD average of 8.9% in 2019. The budget for prevention and health promotion is also lower than the OECD average: in 2018 Latvia spent 2.2% of the total health budget on prevention, compared to the OECD average of 2.7%.

In this context, this review identifies ways in which Latvia can strengthen its public health architecture, better tackle obesity, strengthen secondary prevention, and improve the effective use of pharmaceuticals. In each area, the review identifies scope for Latvia to improve the efficient use of existing resources, to strengthen existing policies and practices, and – if additional investment in health were made available – where the most impactful areas to direct these resources would be. Notably, across all areas covered by this report there appears to be scope for task shifting across health professionals, which would bring efficiency gains. For example, involving pharmacists in more health promotion activities such as health checks, as well as shifting regulations and incentives to ensure that the bulk of chronic disease care is done by General Practitioners (GPs) rather than hospital specialists. Taking steps to decrease the price of generics in Latvia – which are relatively high compared to peer countries – and remunerating pharmacists in a way that incentivises them to dispense the least expensive products, are areas for efficiency improvements in the pharmaceutical sector. In terms of increasing the effectiveness of existing policies, there is scope to expand procurement of healthier foods and drinks, and potential to increase cancer screening by sending invitation letters with a pre-filled appointment time. Finally, investing more in public health – on improving health literacy and on increasing GP primary and secondary prevention activities – and on reducing co-payments for outpatient pharmaceuticals is a better way to use scarce resources and may well turn out to be cost-saving in the long term by improving population health and disease management. OECD analysis already suggests that an effective food labelling scheme would, over the next 30 years, save 190 life years per year and save EUR 69 000 per year in health care costs in Latvia, and expanding such a scheme to restaurant menus could save EUR 305 000 per year in health care cost and gain 384 life years.

When it comes to the overall Latvian public health system architecture, Latvia’s Ministry of Health is clearly turning attention to prevention and promotion activities. When it comes to delivering public health interventions such as education and screening, however, GP and municipalities are expected to play a key role and both appear over-stretched and over-loaded. Latvia should consider allowing other health system actors to take on some GP tasks – such as pharmacists offering routine health checks – as well as looking to introduce more capacity in the system by giving additional support to GPs, especially tied to incentives for undertaking prevention activities. Municipalities, too, should be stronger public health actors through more strategic planning, especially in light of the instability of financing for programmes such as municipality-level group fitness classes or healthy eating education, which are currently mainly paid for with EU funding. This means using funding that is currently available to pay for training of staff in health promotion, so that the expertise in this area remains within the municipality beyond the horizon of the current programmes. There is also scope for Latvia to strengthen regulation around harmful alcohol consumption, continuing to pursue the tighter regulations on availability and marketing of alcoholic beverages planned for 2020-22.

Obesity is a large and growing public health challenge, where Latvia has already put in place a number of policies and interventions, acting at all levels of society. However, more can and should be done to halt the rise in obesity. Firstly, Latvia should expand or redesign existing policies to ensure they have maximum impact. For example, nutritional standards currently in place in schools and health and social care institutions could be expanded to other sectors, such as workplace canteens. The food labelling scheme should be redesigned so that it can support consumers in making healthier choices. Secondly, as many initiatives currently rely on project funding, it is important to ensure their long-term sustainability. This includes evaluating the effectiveness of different activities, as well as building capacity. Thirdly, the health system needs to be empowered to play its role in preventing and treating obesity. This can be done by using different routes to deliver counselling, or implementing pathways for the treatment of obesity – but it will also require changes to the reimbursement or financial incentives for prevention and treatment activities.

Secondary prevention aims to reduce the morbidity of a disease or injury that has already occurred through early detection, and putting in place actions to halt or slow the progress of the disease, while tertiary prevention manages the disease once it has occurred to prevent complications. In Latvia, there are some clear shortcomings when it comes to secondary and tertiary prevention, with low rates of cancer screening coverage, and high rates of complications from chronic diseases such as diabetes. Some improvements to vertical prevention programmes are needed, for example strengthening the cancer screening invitations system(s). Much of the potential to improve secondary and tertiary prevention lies in health system strengthening – investing in the health workforce, strengthening GP responsibilities and capacities, creating chronic disease management pathways for care delivery – and eliminating inefficiencies, in particular better aligning payment schedules with good practice patient pathways, for example by introducing gate keeping.

To strengthen Latvia’s secondary and tertiary prevention there is a clear need for patient and population education focusing on a range of topics, including screening, disease management, use of generics and antibiotics. GPs and, especially, nurses employed in GP practices, need to take a more active role in this. Cancer screening should also be strengthened, for example using text message invites, and/or pre-booked appointments for screening included in the invitation letter. At the same time, there is a need to establish clearer patient pathways for chronic conditions, for example through gatekeeping for specialist care visits, and aligning the reimbursement schedule accordingly. Ultimately, to make meaningful improvements in both early disease detection and disease management, there is a need to create more capacity in primary care, which almost certainly involves further investment in the sector. If this investment were to be made, we would encourage that it be focused on more patient education, active disease management, and possibly some further age/risk stratified health check-ups.

Finally, while Latvia has the building blocks in place for a robust and well-regulated pharmaceutical sector, there is clear scope to strengthen existing policies, iron out some inefficiencies, and increase access to essential medicines. In Latvia, the outpatient pharmaceutical sector is well established with a clear structure; the State Agency for Medicines is the national regulatory authority for pharmaceutical products and assesses quality, safety and efficacy of medicines, the Ministry defines pharmaceutical policy, while the National Health Service (NHS) makes decisions for inclusion of pharmaceutical products in Latvia’s positive list. However, the cost of pharmaceuticals to the health budget is rising – pharmaceutical expenditure accounted for 21% of current expenditure on health in 2008 and reached 27% in 2017, compared to the OECD average of 16%. At the same time, access to medicines is not improving and Latvians still bear directly the costs of more than 60% of outpatient pharmaceutical expenditure, well above the average level of 38% in OECD countries. For patients, the current flaws of the system lead to very high levels of out-of-pocket payments to access needed medicines, resulting in high rates of catastrophic spending on health. It appears that some Latvians forgo pharmaceutical care: for cardiovascular diseases, diabetes and mental health drugs Latvia has markedly low per-capita consumption compared to OECD peers and when considering the burden of these diseases in the country.

This review identifies areas where improvements on the effective use of pharmaceuticals need to be made, some at relatively low-cost. Even though the share of generics in volume is relatively high (74%), there is still scope to increase the use of generics in Latvia. This can be achieved by revising the current distribution margins that incentivise pharmacists to sell more expensive products, and by nudging doctors and pharmacists through organisational or financial incentives to prioritise the cheapest available alternative product. More patient and provider education around the efficacy and safety of generics will be a further fruitful step. There are also ways to make pharmaceuticals more accessible for patients. To improve access and patient financial protection, Latvia should consider including outpatient medicine co-payments in the calculation of the cap on out-of-pocket expenditure, and revising the outpatient medicines reimbursement arrangements, starting with an increase of the reimbursement rate of pharmaceuticals included in the lowest reimbursement category (50% of the price of the cheapest alternative). Latvia should also make new categories of populations exempted of co-payments on outpatient medicines (low income pensioners for instance).

Latvia faces a number of public health challenges – some similar to the other OECD countries, some more pressing. To start with, Latvia has the lowest life expectancy in the OECD, at 74.9 years versus the OECD average of 80.7 years (OECD, 2020[1]). However, Latvia has seen one of the greatest increases in life expectancy over the past 15 years. Between 2004 and 2019, life expectancy in Latvia increased by 4.1 years, while the OECD average increased by 3.1 years.

Like in other OECD countries, non-communicable diseases (NCDs) are the leading cause of mortality in Latvia. Cardiovascular disease is one of the main contributors to the disease burden in Latvia: in 2017, ischaemic heart disease and stroke were the first and second most common cause of both overall deaths and premature deaths (Institute for Health Metrics and Evaluation, 2017[2]). When compared to the OECD average, Latvia sees a higher proportion of mortality due to diseases of the circulatory system: 56% versus 35% on average. Other OECD countries see a relatively larger share of deaths due to cancers. However, in absolute terms, cancer mortality is higher in Latvia: 235.9 deaths per 100 000 population are due to cancer, compared to 197.6 per 100 000 in the OECD on average (OECD, 2020[1]).

Latvia has a higher than average incidence of acquired immunodeficiency syndrome (AIDS), at 5.1 cases per 100 000 population, compared to an OECD average of 1.4 per 100 000 in 2018. HIV/AIDs, as well as infectious diseases such as hepatitis B and C and tuberculosis, are a public health priority for Latvia, with HIV prevention promoted through 19 HIV prevention points providing information and counselling, rapid testing, and supplies (such as syringes, needles, condoms). Latvia also has one of the highest rates of mortality from suicide: the age-standardised rate in Latvia is 18.1 deaths per 100 000 population, compared to an OECD average of 12.1 per 100 000. However, this rate has decreased considerably over the last decade and a half, as it was 32.9 per 100 000 in 2000. In Latvia, mortality from road traffic accidents is also higher than in most OECD and EU countries. The mortality rate in Latvia is 10.9 per 100 000 population per year – which is about 50% higher than the averages for the EU28 (6.2 per 100 000) (OECD, 2020[1]).

In terms of behavioural health risks, tobacco consumption among Latvian women is around the OECD average (14.5% in Latvia in 2014, when latest data is available, versus 13.9% in the OECD for 2018), while tobacco consumption among Latvian men is among the highest in the OECD with 36% of men smoking daily, compared to 22.3% on average in the OECD (OECD, 2020[1]). Latvia has a relatively high alcohol consumption, at 12.6 litres per capita per year, compared to 8.8 litres in the OECD on average in 2018 (OECD, 2020[1]). This is equal to about two and a half bottles of wine per week, or ten pints of beer. In addition, Latvia has a high prevalence of heavy episodic or “binge” drinking (drinking at least 60 grammes of pure alcohol at a single occasion). In Latvia, 59% of the population reported binge drinking in the 30 days prior, compared to 43% on average in the OECD (World Health Organization, 2019[3]).

Latvia also has to manage the higher health needs that come with an aged population. Already 20.3% of the Latvian population is aged 65 years or older, higher than the OECD average of 17.6%. The next 30 years are set to bring an increase in the older population in Latvia, up to 28% by 2050, equal to the projected OECD average.

The Ministry of Health is the leading government authority in the health sector and is responsible for public health, health care and pharmaceutical care. The Ministry of Health plays an important role in the health system, developing national health policy, as well as coordinating and monitoring its implementation. The Ministry of Health also oversees important executive organisations, such as the NHS, the State Agency for Medicines and the CDPC. The NHS allocates state budgetary funds for health care and contracts care from providers through five territorial branches, while the Centre for Disease Prevention and Control (CDPC) implements public health policy in the areas of epidemiological safety and disease prevention, health care quality, and health promotion.

Other ministries are in charge of certain aspects of health care (Behmane et al., 2019[4]). The Ministry of Finance, through the State Treasury, is in charge of the financial flows from the state budget to the health care system. The Ministry of Welfare oversees social rehabilitation and nursing care of vulnerable, disabled and impaired individuals. The Ministry of Agriculture oversees food safety, and the Ministry of Education and Science manages several educational facilities in the health sector. The Ministry of Defence, Interior and Justice finances health services for specific population groups (e.g. armed forces, inmates).

Latvia’s 119 municipal governments are responsible for ensuring geographical accessibility of health care services, and depending on budget and local priorities, they maintain hospitals and long-term social care facilities. Local governments are also charged with local health promotion activities, including promoting healthy lifestyles, controlling alcoholism, and protecting vulnerable groups. While the municipalities are in charge of health promotion, they receive support and oversight from the Ministry and the CDPC to accomplish this task. Health promotion activities in municipalities mainly fall under the Healthy Municipalities Network (CDPC, 2019[5]). This Network, a collaboration between the Ministry of Health, the CDPC and the WHO, aims to promote the exchange of best practices, experience and ideas among local governments; to provide local governments with methodological support in dealing with various public health and health promotion issues; and to improve knowledge of municipal employees on issues of public health and health promotion.

Local governments currently play a relatively small role in health policy and governance. After Latvia regained independence, a push was made towards a decentralised system that relied more on the municipalities for managing and implementing health policy (OECD, 2016[6]). However, partially due to the small size of the municipalities and the country in general, the system shifted back to a more centralised model.

Like other areas of the Latvian health system, unstable budgets limit the capacity of municipalities to deliver public health functions. For example, programmes such as municipality-level group fitness classes or healthy eating education are often funded through EU funding, which limits the sustainability of such services over the longer term. The expectation of the central government appears to have been that municipalities would receive start-up capital from these EU funds, but then be expected to cover the ongoing costs of these programmes out of local budgets from 2023. From 2017-23 overall EU funds represented 85% of overall funding for health promotion activities in municipalities. As of 2020 the projected central budget did not include provisions to continue to support municipalities, nor was there a mechanism to ensure that municipalities continued to fund public health programmes out of their own budget. While larger or richer municipalities are able to hire dedicated staff with a background in public health, in smaller municipalities the responsibilities for health promotion fall on general staff. Half of the municipalities report that they are hindered in their activities by a lack access to expertise and professionals, which translates into a lack of knowledge about how to approach the right target groups (Gobina et al., 2019[7]).

Latvia’s health system is, in general, stretched for resources, and the public health sector is no exception. Latvia had one of the lowest levels of health spending in the OECD in 2019, both in terms of per capita expenditure – USD 1 924 (adjusted for purchasing power parity, or PPP) in Latvia compared to the OECD average of USD PPP 4 170 – and as a percentage of GDP – 6.2% in Latvia, compared to the OECD average of 8.9% (OECD, 2020[1]). As a percentage of current expenditure on health, Latvia spends less than the OECD average on prevention: in 2018 Latvia spent 2.2% of the total health budget on prevention, compared to the OECD average of 2.7% (OECD, 2020[1]).

When it comes to targeted health promotion and prevention programmes, for example national campaigns, efforts to support weight loss or increased physical activity, smoking cessation programmes, Latvia appears to be highly reliant upon funding from the EU. For example, Latvia’s Public Health Strategy for 2014-20 has been primarily funded by EU funds (OECD, 2016[8]), and EU funding which runs until 2023 has been used to pay for municipalities to develop their own local health promotion plans, overseen by the Ministry of Health. There is a risk that too much reliance on EU funding impedes building a sustainable set of health promotion and prevention programmes, if funding in priority areas cannot be assured over the longer term.

A strong, well-established primary care sector is one of the Latvian health system’s key attributes (OECD, 2016[6]). Primary care services commissioned by the NHS are provided mostly by private GPs (OECD, 2019[9]). In recent years, Latvia has worked to improve the role of primary care in prevention and public health. The Primary Health Care Development Plan 2014-16 aimed to position primary health care as the most accessible, effective and comprehensive level of care (OECD, 2016[6]). In addition to increasing the availability of primary care, this plan aimed to increase the role of primary health care in prevention, diagnostics and treatment.

As a result, GPs now play an important role in national screening programmes for cancer, health checks, and chronic disease checks. However, there are clear challenges around this approach, as pressure on GP time is reported as being acute. Latvia has fewer practicing physicians and slightly fewer General Practitioners than the OECD average, but is not amongst the countries with the fewest physicians. However, remuneration for physicians is amongst the lowest in the OECD when compared to the national average wage, in particular for GPs. These low salaries reportedly contribute to some physicians working at least part of the time in the private sector, which reduce overall availability of physician time. As of 2019 Latvian GPs earned almost exactly the average wage, compared to GPs in neighbouring countries such as Estonia, where GPs earned between 1.6 and 2.4 times the average wage, or Lithuania, where GPs earn 20% more than the average wage.

To encourage more prevention activities in primary care, practices with more than 1 800 patients are given funding for a second practice nurse, whose primary focus is supposed to be prevention (OECD, 2016[6]). In reality though, the time of the additional practice nurse is often spent on activities other than prevention due to the heavy workload that many GP practices experience.

Latvia has put in place a number of policies to address tobacco and harmful alcohol consumption. Latvia has been working to reduce the rate of smoking through a range of policies, including a tobacco tax of 80% of the retail price above the WHO guide rate of 75%, banning purchase of tobacco products for under 18s, a ban on tobacco advertising and smoking in most public places, and health warnings on 50% of all tobacco products. These policies cover nearly the entire WHO Framework on Tobacco Control, but one element that had been missing was a ban on the display of tobacco products at points of sales (WHO FCTC Implementation Database, 2018[10]). This changed on 1 October 2020, as Latvian retailers are now required to put tobacco out of view of consumers.

A comprehensive policy package is required to address harmful alcohol consumption, and Latvia already has a number of policies in place. These include taxation on alcohol products, a ban on sales to people younger than 18 years, a ban on the off-trade sale of alcoholic beverages between 10pm and 8am, educational campaigns and some advertising restrictions. However, there are important limitations to the current regulations. For example, currently beer and wine are exempt from the restrictions on television and radio advertising.

Moreover, while Latvia does have a tax on alcohol, the level of the tax has historically been low – driving alcohol tourism from nearby countries such as Finland and Estonia. The revenue from this cross-border trade means that there is a financial incentive for Latvia to keep taxes on alcohol low. When Estonia decreased the tax on alcoholic drinks by 25% in 2019, Latvia responded by reducing their tax on strong alcoholic drinks by 15% (Reuters, 2019[11]).

The Ministry of Health is in the process of exploring more extensive alcohol regulations. The National Action Plan on the Consumption of Alcoholic Beverages and Limitation of Alcoholism 2020-22 was adopted by the Cabinet of Ministers on 30 July 2020, and calls for stricter restrictions on the advertising and availability of alcoholic beverages. It includes a ban on television, radio and internet advertising of special offers (sales and discounts) for all alcohol products, and on trade promotion activities such as two-for-one sales. However, the plan does not include any changes to the tax on alcohol products, which falls under the responsibility of the Ministry of Finance.

Engagement between the Ministry of Health and representatives of industry, notably food, appears to be positive in Latvia. One example of engagement is a Nutrition Council, set up by the Ministry of Health in 2006, which convenes several times a year and includes the participation a range of industry actors.

In 2011, voluntary marketing regulations were introduced on soft drinks (WHO, 2011[12]). The Ministry of Health, the LPUF (Latvian Food Business Federation) and the LBDUA (Latvian Non-Alcoholic Beverage Entrepreneurs Association) signed a Cooperation Memorandum to reduce the advertising of soft drinks to children aged 12 or under. In the Memorandum, the industry committed to refrain from advertising soft drinks on television and in cinemas if more than 50% of the audience is children, and from targeting this age group on the internet. Mandatory advertising regulations currently only apply to energy drinks.

Latvia should encourage the industry to take a more active role in promoting healthier lifestyles and habits. Besides the voluntary marketing regulations on soft drinks there is currently no significant collaboration between the Latvian Government and industry – for example food and beverage, or alcohol producers – around promoting healthier lifestyles and habits. There is scope for stronger engagement of industry, following some of the practices found in other OECD countries. For example, in both Spain and the United Kingdom industry has been pushed to take the lead in voluntary reformulation of certain foods, to be followed by evaluations to assess whether a voluntary approach is delivering effective changes. Latvia is working on this, as the Ministry of Health is planning to sign a Memorandum of Cooperation with industry aiming to improve the composition of food products by implementing reformulation.

Moreover, regulations on the marketing of energy drinks should be expanded to other foods and drinks. Advertising restrictions are recommended by the WHO, and it notes that a comprehensive approach covering a wide range of unhealthy foods and advertising channels has the greatest potential to achieve the desired impact (World Health Organization, 2010[13]).

In Latvia, over a quarter (26%) of the population is obese: 28% of women and 23% of men have a body mass index (BMI) of 30 kg/m2 or higher – the threshold endorsed by the WHO to define overweight (World Health Organization, 2017[14]). This is just above the OECD and EU28 average of 25%. In addition, 58% of adults are overweight (BMI of 25 kg/m2 or higher), which again is similar to the OECD average. Overweight and obesity among children has increased over recent years. In 1975, only around 1% of children were obese; by 2016, this had grown to 9% of boys and 5% of girls, with over a fifth of Latvian children overweight.

Overweight and obesity are caused by an energy imbalance between energy in (calories consumed through diet) and energy out (calories burned through physical activity) (World Health Organization, 2018[15]). In Latvia, both sides of this balance contribute to the obesity epidemic. A large proportion of the Latvian population does not get physical activity through recreational activities, sports or fitness: only 40% of the population does some form of sports at least once a week. People from lower socio-economic groups are even less likely to do this type of physical activity, with 74% of people in the lowest income quintile not engaging in sports or fitness. The frequency of physical activity decreases with age. Only 21% of 15 to 17-year-olds do not do any sports or fitness activities, compared to 50% or more in people over 30. This proportion continues to increase with age, as it reaches 70% among those aged 60 to 64 and 88% for people over 85.

On the other side of the balance, calorie availability has increased in Latvia in the last two decades. In 2000, the food supply was 2 785 calories per capita, per day. In 2017 this had increased by 14% to 3 169 calories (Food and Agriculture Organization, 2019[16]). In addition to overall calorie intake, the quality of diets also contributes to health. Only 40% of Latvians eat fruit every day, and 42% eats vegetables every day. The frequency of fruit and vegetable consumption increases with income, though it drops slightly for the highest income group. Nevertheless, in every income group less than half of Latvians eat fruit or vegetables every day.

The prevalence of overweight and obesity has an impact on the population health and economy of Latvia. Using the OECD SPHeP NCD model (OECD, 2019[17]), it is calculated that, over the next 30 years, the average life expectancy in Latvia is 3.6 years lower because of overweight, if no further action is taken. This is one of the highest impacts across all countries analysed. Obesity is one of the leading risk factors contributing to the burden of non-communicable diseases (NCDs), increasing the risk of developing type 2 diabetes, cardiovascular diseases, musculoskeletal disorders, several types of cancer, and depression (WHO, 2017[18]). In Latvia, 79% of all diabetes cases can be attributed to overweight, as well as 7% of cardiovascular diseases, 4% of dementia cases and 2% of cancer cases (OECD, 2019[19]).

As a result, the prevalence of obesity contributes to an increase in health care expenditure. Over the next 30 years, Latvia will spend around 6% of its entire health care budget on treating the consequences of overweight and obesity – around EUR 91 million per year. However, compared to other countries Latvia spends relatively little. This could be due to the fact that non-obesity related conditions make up a larger part of the disease burden in Latvia, compared to other OECD countries.

While Latvia’s health care expenditure on overweight and obesity is less than in other countries, obesity still has a large impact on the economy. Combining the impact of overweight on life expectancy, demographics and labour force productivity, the gross domestic product (GDP) of Latvia is 4.5% lower the next 30 years than if there had not been any overweight. This is much greater than the expected impact on GDP on average across the OECD (3.3%), which may be due to the relatively large impact of overweight on Latvia’s life expectancy, as well as its impact on the productivity of the workforce.

The Latvian central government has produced strategies and guidelines to promote healthier behaviours. The Latvian Public Health Strategy 2014-20 identifies obesity and overweight as one of the major risk factors contributing to non-communicable diseases in Latvia, and Latvia has set national guidelines for physical activity and a healthy diet, and a national physical activity roadmap. The Ministry of Health, together with the CDPC, also runs a number of campaigns to encourage healthier diets and physical activity, for example establishing health trails in five cities throughout Latvia, along with a health promotion card that offers discounts for healthy leisure services. A number of legislative policies are also used to tackle the obesity epidemic, including nutritional standards for schools, health and social care institutions, and prisons; advertising and sales restrictions on energy drinks; and a tax on sugar-sweetened beverages.

In 2006, Latvia was one of the first OECD countries to ban the sale of unhealthy foods in school, including sodas and confectionary and salted crisps. Moreover, educational institutions, medical treatment institutions, social care and rehabilitation institutions are subject to regulation on nutritional standards.

Since 2016 so-called energy drinks (soft drink with a high content of caffeine or other stimulants like taurine and guarana) cannot be sold to children under 18 years old (FAO, 2016[20]). Moreover, they are subject to specific marketing regulations, including warnings on the negative effects of energy drink overuse on any advertising materials, a ban on advertising energy drinks in schools and public buildings, and a ban on advertising to children age under 18.

Latvia has a food labelling scheme – but its primary aim is not to encourage healthier choices or reduce obesity. The National Food Quality Scheme, run by the Ministry of Agriculture, uses labels to mark “higher quality products”. A Green Spoon label is awarded to products for which at least 75% of ingredients come from one designated country (usually Latvia). There are no nutritional criteria associated with the label, and it has been awarded to products including sausages, cakes, ice cream, white bread, cheddar cheese and beer (, 2020[21]).

Latvia has had a tax on sugar-sweetened beverages (SSBs) since 2000. Over the last two decades, the rate of taxation has increased from EUR 2.85 per 100 litre to EUR 7.40 per 100 litre. SSBs are currently taxed uniformly, without differentiation based on the sugar level in the drink. The SSB tax rate in Latvia is in line with other OECD countries, though some countries have higher rates for beverages with a higher sugar content. From 1 January 2022 an amendment to the excise tax will come into place, differentiating between beverages with different levels of sugar. Beverages with less than 8 grammes of sugar per 100 litres will have an excise tax of EUR 7.40, while those with more than 8g sugar per 100 litres will have an excise tax of EUR 14.00. Latvia has a reduced value-added tax rate for fresh vegetables, fruit and berries, and a reduction for fresh meat, fish, eggs and dairy is planned for the coming year.

A comprehensive policy package is needed to tackle obesity and its drivers. Latvia’s current policies could have a considerable impact on diet and physical activity if they were expanded upon or redesigned. In many cases, this would require little additional investment as they are low-cost interventions, or because they build on existing structures.

First, Latvia should expand the nutritional requirements for meals in schools and medical facilities to other public places, such as leisure centres, government-funded afterschool and summer programming, shelters, and vending machines on government-owned or leased property. Moreover, workplaces can be supported in their healthy food procurement efforts.

Second, a more effective food labelling scheme focused on nutritional criteria should be developed. While Latvia has a food labelling scheme in place under the Green Spoon initiative, there are no nutritional criteria associated with the label. It is important to clarify the meaning of the existing label, highlighting that it does not imply a healthier product. In addition, Latvia should consider implementing a food labelling scheme that does help consumers make healthy choices. OECD analysis suggests that an effective food labelling scheme could save 190 life years per year and save EUR 69 000 per year in health care cost in Latvia (OECD, 2019[19]). The labelling scheme should also be expanded to menus. Evidence shows that menu labelling can positively affect consumer choices, and that there is strong public support for it (Mah et al., 2013[22]; Pulos and Leng, 2010[23]; Morley et al., 2013[24]). A systematic review found that menu labelling reduced the overall energy consumed by 100 kcal on average, and that energy per order in a real-world setting decreased by 78 kcal on average (Littlewood et al., 2016[25]). In Latvia, menu labelling could save EUR 305 000 per year in health care cost and gain 384 life years (OECD, 2019[19]).

Third, Latvia should pursue food reformulation more actively. Food reformulation, where the composition of food products is changed to improve their nutritional profile, can contribute to healthier diets. Especially in Latvia, the impact of a food reformulation policy would be considerable. Compared to other countries, Latvia would see one of the largest impacts on the disease burden if calories were reduced by 20% in foods high in sugar, salt, calories and saturated fats (OECD, 2019[26]). Moreover, it would save EUR 1.3 million per year in health care cost (OECD, 2019[19]). The Ministry of Health in Latvia has already agreed with the Nutrition Council to explore ways to encourage food product reformulation (Ministry of Health, 2019[27]). One approach is a public-private partnership (PPP), as has been used in several other OECD countries. Carefully designed PPPs can be beneficial for all stakeholders, including industry, government and consumers, so long as clear objectives and accountability processes are built-in. For governments, working with the industry can mobilise additional resources and increase buy-in. There are also incentives for industry to engage with the government in creating healthier food products, which can create new market opportunities or niches.

Finally, Latvia should expand the advertising regulations that currently only apply to the marketing of energy drinks to children to a greater range of unhealthy food and drinks. Advertising restrictions are recommended by the WHO to reduce the impact of the marketing of unhealthy food and drinks on children (World Health Organization, 2010[13]), and the use of different marketing approaches targeted at children has been shown to influences food preferences, purchase requests and consumption patterns. Latvia should aim to expand mandatory regulation to other unhealthy food and beverages, to increase its impact on diet and obesity.

Latvia recognises that primary care has a vital role in prevention – as shown by the introduction of primary care nurses dedicated to prevention. Moreover, the dedicated health check programmes for non-communicable diseases aim to identify individuals with risk factors such as obesity and provide them with adequate care to prevent complications. Latvia has also introduced a scheme to allow doctors to prescribe physical activity to patients. This scheme, developed together with the Centre for Sports Management, provides GPs with a handbook to create recommendations for physical activity, taking into account the patient’s fitness level, health status and stage of behaviour change. However, the programme is not linked to payments or data collection, and it is unclear what its uptake and impact is. Secondary care also plays a role in obesity prevention and treatment. Children’s University Hospital in Riga has run a specialised two-day weight loss programme, including consultations with an endocrinologist, rehabilitatist, physiotherapist, nutritionist and psychologist, which has seen 500 children since 2014.

Despite these initiatives, the role of the health care system in preventing and treating obesity is limited. This is due to a lack of time and resources, as well as limited treatment options under the national health system. Primary care physicians as well as nurses experience a heavy workload, and prevention activities such as counselling on diet or physical activity – which are not directly reimbursed – are a lower priority. In addition, drug or surgical treatment of obesity is not covered by the national health system. Sessions with nutritionists are not covered under the national insurance either. While some people can pay out-of-pocket for drugs, nutritionist advice or bariatric surgery in private hospitals, the public health system offers few options.

While recognising the limited health budget in Latvia, the obesity epidemic cannot be controlled without the help of the health system. Doctors and other medical specialists are uniquely placed to provide counselling and advice to high-risk individuals. Moreover, they can help treat obesity and prevent further complications or the development of non-communicable diseases. There is considerable untapped potential in the health system to support the fight against obesity. For example, even though General Practitioners are the first point of contact for patients with the health system and a trusted source of information there is no direct reimbursement associated with counselling, and few physicians can afford to make the time.

Latvia should also look to other OECD countries which have introduced obesity counselling without depending on GPs. In Chile, the Vida Sana programme in Chile includes counselling as part of a broader obesity prevention package. Though the programme is run out of primary care centres to reduce the cost of delivering the intervention, medical doctors are only involved if the patient specifically requires medical attention and most sessions are with other professionals such as a physical education teacher, physical activity therapist, or kinesiologist. In Finland the Virtual Hospital 2.0 project includes the development of Health Village – an online resource with information for patients and health care professionals (Terveyskylä.fi, 2020[28]). One of the “houses” in the village is focused on weight control and includes a 12 month weight management programme, with a virtual coach to each participant with whom they have weekly or monthly interactions. Participants also have access to 160 training sessions, 60 videos and audio tutorials, a photo food journal, group chats and research questionnaires (Pietiläinen, 2020[29]). The programme is free for patients, and they can be referred to it by primary care physicians, occupational health professionals or other specialists if they have a BMI of more than 25 kg/m2 and are over 18 years old.

In addition to prevention activities, primary care physicians and specialists need to be able to treat obesity to prevent further complications. Currently there are no drugs or surgical treatments covered under the national health system for obesity. Instead, people have to pay out-of-pocket to undergo bariatric surgery privately. In addition to widening inequalities, this can also have a negative effect on recovery and patient well-being, as patients may not receive adequate nutritional education or decision guidance. One approach to encouraging better treatment of obesity is to develop guidelines. This can support doctors in delivering the care that is needed, and ensure a consistent and effective approach. However, this would need to be matched by changes in the reimbursement package.

The Healthy Municipality Network is a corner stone of Latvia’s approach to health promotion. It enables local governments to respond to the needs of their population and provide tailored interventions in the field of nutrition, physical activity and more. However, this project is strongly reliant on EU funding: around 85% of municipalities’ health promotion activities are funded by EU funds. While Latvia is currently working to secure an additional round of funding, these grants remain time limited. A considerable number of other activities and programmes in Latvia also reply on EU project-based funding. To ensure that programmes have maximum and lasting impact, they need to be sustainable without external funding.

A first step to ensuring sustainability is planning for sustainability (Shediac-Rizkallah and Bone, 1998[30]). Rather than an afterthought once funding runs out, sustainability should be a primary goal of the programme from the beginning. As such, planning for sustainability should start as soon as possible. Most of the activities under the Networks rely strongly on human capacity. Developing capacity and expertise is therefore a crucial part of ensuring sustainability (Shediac-Rizkallah and Bone, 1998[30]). In some larger or richer municipalities, the EU funding has been used to hire or train experts in health promotion. These experts will remain in place and can continue to train new hires – thereby ensuring continuation of the programme and lasting expertise. Currently this capacity is lacking in smaller municipalities, threating the sustainability of health promotion projects there. After the planned reorganisation of the municipalities, which is expected to result in fewer municipalities with presumably more resources, capacity building around health promotion should take place in each new municipality.

In addition to human capacity, municipalities should also review other resources that their programmes require. Low-cost interventions, such as outdoor running clubs or educational lectures, can be added to the programme now to test their effectiveness. In some cases, it may also be possible to explore agreements with current facilities, educators or trainers for discounted services. Volunteers can be sought to contribute to the delivery of activities. Overall, it is important to start exploring these matters now to make the programmes future-proof. Most of these elements – the effectiveness of interventions, the expertise of programme managers and the availability of local resources – will differ from one municipality to the next. Therefore, planning for sustainability will fall on the municipalities. The Ministry and the CDPC should continue to support the municipalities’ efforts by providing them with guidance materials and training sessions.

Secondary prevention aims to reduce the morbidity of a disease or injury that has already occurred through early detection, and putting in place actions to halt or slow the progress of the disease, while tertiary prevention manages the disease once it has occurred to prevent complications. Secondary prevention interventions – screening, health checks – and tertiary prevention – disease management – can reduce the disease burden and economic impact of chronic diseases. In Latvia, non-communicable disease represent a significant and growing health and economic burden, and high levels of smoking, alcohol consumption and obesity make the population particularly vulnerable to chronic disease. Already, non-communicable diseases are the leading cause of death in Latvia, with circulatory diseases and cancers accounting for the greatest number of deaths (OECD, 2020[1]). In Latvia mortality from ischemic heart diseases, cancer, and cerebrovascular diseases was significantly higher than the OECD average; mortality from ischemic heart diseases and cerebrovascular diseases in particular was more than twice the 2019 OECD average (OECD, 2020[1]). Despite the decreasing trends in mortality rates due to cardiovascular diseases (mostly ischaemic heart disease and stroke) in Latvia are amongst the highest in the EU, and well above the OECD average (OECD, 2019[9]). Mortality from cancer has increased slightly in Latvia, but remains below the OECD average.

In this context, it is especially important that diseases are detected early and controlled effectively when they occur; the resource-tight environment in Latvia makes effective secondary prevention even more important as part of preventing higher-cost treatment of advanced disease, disease complication and co-morbid conditions and also preventing premature deaths. ‘Treatable mortality’ refers to deaths that could be avoided if effective health care interventions, including screening and treatment, were in place, and Latvia has the third highest rate of treatable mortality in the EU (OECD, 2019[9]). The rate of treatable mortality in Latvia was 157 per 100 000 population, more than twice the OECD average of 75 per 100 000 population in 2016. The rate of treatable mortality in Latvia was particularly high for ischaemic heart diseases and stroke; despite falling stroke and ischaemic heart disease mortality rates there is clear room for improvement if Latvia is to catch up with EU and OECD peers.

Basic health check-ups for chronic diseases, for example taking blood pressure or cholesterol, or a screening for cardiovascular disease based on age, family history, and risk factors such as body mass index (BMI), can help diagnose persons at-risk of chronic diseases, or diagnose chronic diseases in their earlier stages when they can be managed with fewer complications.

In Latvia, the main responsibility for health checks lies with GPs who carry out preventive examinations of adults and children, cardiovascular risk assessment, as well as cancer screening checks. Latvia does not have a national programme of health checks, put does have policies to incentives some specific tests. In 2018 around one-third of Latvia adults undertook preventive examinations, although it is not possible to establish which tests were in fact undertaken. GPs’ second practice nurses are theoretically intended to focus on prevention tasks such as lifestyle advice and checks, but it is not clear that in reality second practice nurses are actually carrying out this role. GPs carry out cardiovascular screenings using a standardised tool, and diabetes screening, but with cardiovascular screening recommended every five years and diabetes screening ever three years the two are not well aligned, and take additional time for already over-stretched GPs. Latvia’s primary care pay-for-performance scheme also has some items focused on secondary prevention – for example cancer screening, LDL cholesterol monitoring – but the scheme appears to be a weak incentive for GPs, with less than 3% of GPs achieving all eight targets in 2018.

The bulk of chronic disease management is also the responsibility of General Practitioners in Latvia. For routine care, patients are expected to visit their named GP. However, it is not always clear whether GPs or specialists should be caring for patients with chronic diseases. For example, for diabetes the main burden of care for diabetes should lie with the GP, while for chronic obstructive pulmonary disorder (COPD) a patient can visit a GP, or a specialist, can be cared for in a specialist clinic. OECD data suggests that there is room for improvement in chronic disease management in Latvia; avoidable hospital admissions were above the OECD average for Asthma (93.1 admissions per 100 000 compared to the OECD average of 41.9), and just below it for COPD (148.4 compared to 183.3) in 2017.

For diabetes management, the majority of activities – patient education, nutrition advice, some medication prescribing, foot scans – should take place at the GP level. There are a few diabetes management cabinets in Latvia, run by nurses, which give lifestyle advice, education, insulin support, and advice on disease management. However, there are limits on prescribing of some pharmaceuticals by GPs, which have to be prescribed by endocrinologists in order to be reimbursed. There are no caps on the reimbursement of visits to endocrinologists for patients with a diabetes diagnosis, and patients can self-refer to endocrinologists and have this visits reimbursed if they have a diabetes diagnosis. While data tracking the extent to which stabilised diabetic patients are making repeat specialist visits is not available, this is theoretically possible and arguably a potential source of inefficient use of specialists’ time, and representing poor value-for-money. Other limits on GP prescribing, for example on medication for cardiovascular disease were also reported.

It is notable that in 2018, Latvian consumption of anti-diabetics, and cholesterol lowering drugs are the lowest and seventh lowest rates (DDD per 1 000 population) in the OECD (OECD, 2020[1]). There appear to be some gaps in reimbursement coverage for basic pharmaceuticals and medical devices for persons with chronic disease. For example, anti-coagulants are reimbursed only if a patient has previously experienced a stroke. Some pharmaceuticals for heart failure are subject to a 25% co-payment rate. Pre-diabetic drug treatment is not reimbursed.

Cancer screening stands out as an area where significant improvements should still be made in Latvia, specifically for breast and cervical screening, for which rates are amongst the lowest in the OECD despite improvement over the past decades. In Latvia, a national cancer screening programme is carried out by the National Health Service. Women between 25 and 70 years of age should receive a Papanicolaou (Pap) smear test screening for cervical cancer once every three years, women aged between 50 and 69 should receive mammography screening every second year, and the entire population between age 50 and age 74 should receive faecal immunochemical test once a year (Latvian Government/OECD, 2019[31]). Screening frequencies are well aligned with those of other European countries (Altobelli and Lattanzi, 2014[32]). While Latvia’s rates of cancer screening are low compared to OECD countries, they have increased in recent years. Rates of breast cancer screening nearly doubled from 21.1% coverage in 2009, to 42.1% in 2018. Cervical cancer screening rates increased even more significantly from 14.9% to 42.8% across the same period (data age-standardised to the OECD population) (OECD, 2020[1]). This increase is likely in part due to national efforts to increase screening across the last decade. For cervical cancer, organised screening was first implemented in 2009, before which point screening was opportunistic though encouraged (Vīberga and Poljak, 2013[33]).

It is clear that considerable efforts have been made to increase both breast and cervical screening, from public campaigns to encouraging GPs to reach out to patients directly, centralising the screening invitation information system, and making mobile mammography an option in rural or under-served areas. Sending a personalised letter and following up with an individual phone call are consistent with evidence of best practice (Segura et al., 2001[34]; European Commission, 2018[35]), and Latvia has been encouraging GPs to follow up with women in the target group who have not attended screening. However, since capacity of GPs and GP practice nurses is already clearly stretched. Latvia may wish to consider whether other health professionals, for example pharmacists, could be involved in personal follow-up calls to screening invitations. At the same time Latvia should consider including a pre-arranged screening appointment time and location in invitation letters, an approach used in Denmark, Finland, Germany, Ireland, Italy, the Netherlands, Spain, Sweden and the United Kingdom (OECD, 2019[36]). Latvia can also include a fixed appointment time either in the first screening invitation or in a follow up to persons who have not responded to the first invitation. Additionally, including additional information in languages other than Latvian, alongside the invitation letter which is legally required to be sent in Latvian, would help accessibility for the large population who are not native speakers of Latvian.

To improve outcomes for people with chronic diseases in Latvia, who represent a significant proportion of the overall disease burden, it will be critical to strengthen chronic disease management. This should include coordinated and proactive interventions for people identified as at-risk of chronic diseases, for example pre-diabetic patients, comprehensive support for disease management and self-management for controlled chronic diseases, and high responsiveness in the event of disease complications.

Improving chronic disease management should also be seen as a way of improving efficiency. Timely interventions in the pre-disease period can stop the progress of a condition and reduce a patient’s need for care. Effective chronic condition management can reduce complications which can be very costly, both in terms of more intensive specialist support including hospital stays, and increased disability which can take people out of the workforce earlier in their life course.

Latvia should look to strengthen chronic disease management in a three-step process that could be pursued simultaneously or incrementally depending on capacity, and on whether it is possible to undertake some pilot projects in the country. First, Latvia should ensure that chronic disease management pathways, or clinical guidelines, are available for all high prevalence chronic diseases. Chronic disease pathways, which could be produced in both patient-facing and clinician-facing formats, should clearly establish the professional responsibilities of health professionals at different stages of disease. For example, it does not seem necessary that stable diabetes patients regularly see specialist endocrinologists, but rather they can be managed by GPs. Having established clear chronic disease management pathways, there is a need to ensure that other levers within the system are effectively aligned with the pathway. For example, when it comes to diabetes, more limits on frequency of specialist visits, or limits to reimbursement for visits without a referral, could be introduced. Second, Latvia should accelerate the development of chronic care management programmes led by dedicated multi-disciplinary teams. For example, a disease management programme for diabetes can offer diet and exercise support to help patients control their blood glucose levels and reduce their BMI, group sessions focused on education or peer support, and regular scheduled check-ups.

Third, Latvia could move towards the development of bundled payments for chronic conditions. Bundled payments for chronic conditions have been introduced in OECD countries such as Canada and France to incentivise coordination of care for chronic conditions between providers, or provide a broader set of care (for example education, regular checks, occasional specific checks) for chronic conditions (OECD, 2020[37]; OECD, 2016[38]). Bundled payments can encourage collaboration within and across care settings, contribute to greater standardisation of care for example by requiring adherence to quality criteria, and can strengthen data availability by requiring the collection of monitoring indicators or integration of data systems across care settings, and control overall costs (OECD, 2016[38]).

Low levels of health literacy, misinformation around common medical care and pharmaceuticals, and possibly distrust of the medical system, appear to be relatively widespread in Latvia, and affect delivery of effective public health interventions across the board (OECD, 2016[8]). Low levels of health literacy appear to be affecting chronic disease management capacities too, for example reported reluctance of patients to take ‘preventive’ pharmaceuticals such as statins. In general, people with low overall health literacy who also have a chronic disease know less about their disease, which can complicating chronic disease management (Gazmararian et al., 2003[39]; Dunn and Conard, 2018[40]; van der Heide et al., 2018[41]; Moreira, 2018[42]). Health literacy amongst health professionals may also need to be improved, for example underscoring the efficacy of generic pharmaceuticals and insuring that inaccurate information is not being shared with patients.

In Latvia increasing health literacy through patient education, education for health care professionals, and making easy-to-understand health information broadly available should be a priority, and does not necessarily entail significant resource investments. Priorities would include: health literacy in school curricula; communication training – for example how to avoid medical jargon, encourage patient questions, and prioritise need-to-know information – for health professionals; and making easy-to-understand information available in written forms, for example brochures, websites or even phone text-message services. Health literacy programmes in schools have been found to represent good value for money (Mcdaid, 2016[43]). Improving general population health literacy can also have positive impacts for patients with chronic diseases can help individuals better manage their condition, including necessary treatment or control protocols and behaviour modification, and improve shared decision making with health care professionals (Dunn and Conard, 2018[40]; Poureslami et al., 2016[44]; van der Heide et al., 2018[41]).

Primary care providers, and specifically General Practitioners, are at the heart of secondary and tertiary prevention in Latvia. While some interventions are managed vertically, for instance breast and cervical cancer screening, and there are a small number of chronic disease cabinets for instance for diabetes, the bulk of screening, disease risk detection, patient contact, and chronic disease management, lies with General Practitioners. To strengthen secondary and tertiary prevention capacity, and impact, Latvia should look to increase capacity in primary care.

However, that Latvian GPs are broadly agreed to already be significantly time and resource stretched increasing secondary and tertiary prevention activities in primary care would require some further investment of resources in the sector. If such resources were available, to improve secondary and tertiary prevention the priorities for increasing capacity should be focused on patient education, comprehensive disease management, and some systematic or opportunistic screening and check-ups to detect disease. Exploring whether there are ways for other health workers – for instance nurses or pharmacists – to play a role in delivering some of these key prevention activities is a possibility for Latvia to explore.

Ensuring access to essential medicines can make an important contribution towards improving public health. In countries where access to medicines is not guaranteed, or where high out-of-pocket payments prohibit patients from accessing care for financial reasons, patients may forego or postpone filling prescriptions and purchasing medicines. In Latvia, the pharmaceutical sector has been at the centre of attention in recent years. The sector has become costly for both patients and the public payer, impairing patients’ access to needed therapeutics and generating substantial pressures on public finances.

Legislation and policies in the field of pharmaceuticals are clearly defined in Latvia. Under the authority of the pharmaceutical department of the Ministry of Health, the State Agency of Medicines (SAM) of Latvia and the NHS are the two main institutions responsible for the delivery of pharmaceutical-related policies. The SAM is the national regulatory authority for pharmaceutical products and assesses quality, safety and efficacy of human medicines. The NHS is responsible for making decisions regarding the reimbursement of pharmaceuticals and inclusion of products in the positive list.

The positive list of outpatient pharmaceutical publically covered consists of four groups. List A includes groups of interchangeable pharmaceutical products, for which the NHS reimburses one unique “reference” price. The groups consist of either products with the same active ingredient, or certain products pertaining to the same pharmacotherapeutic group. List B consists of reimbursed products that cannot be substituted or interchanged. List C is for high-cost pharmaceutical products with annual treatment costs exceeding EUR 4 300, and List M for pharmaceutical products for pregnant women, women up to 70 days postpartum and children under 24 months (Silins and Szkultecka-Dębek, 2017[45]).

All the medicines included in the positive list are classified into one of the three reimbursement categories (reimbursed at 100%, 75%, and 50%). The reimbursement category depends on the illnesses for which a particular product has been approved. Each reimbursement is made on the basis of a defined reference price.

In Latvia, prices of medicines are regulated by the national authorities. For medicines not included on the positive list, only the distribution chain margins (i.e. wholesalers and pharmacists) are regulated, which means that for each non-reimbursed medicine the pharmacy prices are the same in any community pharmacy throughout the country. For medicines part of the positive list, manufacturers’ prices are negotiated between the NHS and the market authorisation holder (via an External Price Referencing mechanism) and distribution margins are also regulated.

As of 1 April 2020, retail pharmacies must sell to patients the product with the lowest price (i.e. the reference price for the group). In case a patient refuses the medicine sold by the pharmacy and wishes to be given a different reference of the same medicine, the patient is not eligible for reimbursement and has to pay the full price for all the medicines listed in the prescription. In any case, a prescription fee of EUR 0.71 per item applies for medicines reimbursed at 100% (with an exemption for some patient groups, such as children and asylum seekers).

Pharmaceuticals have represented a growing share of health spending in Latvia for more than a decade. Pharmaceutical expenditure accounted for 21% of current expenditure on health in 2008 and peaked at 27% in 2017 (as compared to 16% on average in the OECD on that year) (OECD and European Observatory on Health Systems and Policies, 2019[46]). However, the rising expenditure on pharmaceutical has not contributed to improving access to medicines for the Latvian population. In Latvia, pharmaceutical consumption is not in line with the burden of disease. Indeed, the country has the third highest level of treatable mortality in the EU, with more than half of it attributable to cardiovascular diseases. Despite this situation, Latvia reports among the lowest levels of cardiovascular drug consumption in the OECD. A similar situation is observed for diabetes or mental health drugs, with high prevalence of these diseases and comparatively lower per-capita consumption of the corresponding treatments (OECD, 2019[47]).

The current pharmaceutical pricing and reimbursement system is not protecting patients (and more particularly vulnerable populations) from the costs of ill-health. Indeed, Latvians still bear the costs of more than 60% of outpatient pharmaceutical expenditure, much above the average level in OECD countries (38% of outpatient pharmaceutical expenditure paid out-of-pocket). The limited financial support for accessing outpatient medicines contributes to the overall high level of out-of-pocket spending in Latvia, reaching 39% of total health expenditure in 2018 (second highest level in the OECD). As a result, the incidence of catastrophic health spending is very high in Latvia (in 2013, almost 13% of the population experienced catastrophic health spending), with the costs of outpatient medicines being almost exclusively responsible (OECD and European Observatory on Health Systems and Policies, 2019[46]) (WHO Regional Office for Europe, 2018[48]).

Three key factors can explain why outpatient medicines are the most significant source of financial hardship in Latvia. First, the Latvian reimbursement system, with its percentage co-payments and absence of a cap on out-of-pocket payments, provides weak financial protection for patients. Co-payments calculated as percentage of total cost are unfair to the consumer, and ineffective for controlling health expenditure, as they shift the financial risk from the purchasing agency to the households, and expose people to any health system inefficiencies. In addition, such a system disproportionately affects vulnerable populations (e.g. persons on low-income or with chronic conditions). Strong caps on out-of-pocket payments can protect people if they are applied to all co-payments over time, rather than if they are narrowly focused on specific items or types of service. In Latvia, excluding outpatient medicines from the general calculation of the cap on out-of-pocket payments makes it less impactful since the majority of out-of-pocket payments are related to outpatient medicines.

Second, the rather limited size of the positive (reimbursement) list impairs the access to necessary therapeutics. Out of the 4 252 products registered in Latvia, 1 760 (41%) are at least partially reimbursed by the NHS (i.e. products that are part of one of the reimbursement lists). Some essential medicines such as aspirin (anticoagulant), glibenclamide (anti-diabetic), penicillin and erythromycin (antibiotics) are currently not part of the reimbursed products.

Finally, the pricing system is structured around a reference price for each molecule, which creates the possibility of an additional financial burden for patients. Patients may end up paying an extra co-payment in event the cheapest alternative is not available or if they chose not to buy it. The Ministry of Health estimates that in 2017, EUR 25 million were paid by patients because they were not provided with (or did not choose) the cheapest available alternative of a prescribed reimbursed medicine. It is expected that the reforms introduced in April 2020 will contribute to limit this issue in the near future.

Overall, a combination of the following measures should be considered in order to improve patients’ financial protection: include co-payments on medicines to the calculation of the general cap on out-of-pocket payments and lower the overall threshold of this cap to make it more protective; revise the reimbursement arrangements, starting with an increase of the reimbursement rate of pharmaceuticals included in the lowest reimbursement category (50% of the price of the cheapest alternative); make new categories of populations exempted of co-payments on outpatient medicines (low-income pensioners for instance); and revising the current positive lists (list A; B, C and M) to include some current important therapeutics not yet part of it.

Many countries view generic and biosimilar markets as an opportunity to increase efficiency in pharmaceutical spending. In Latvia, the penetration of generic medicines is quite good. Generics represented in 2017 74% of the market in volume, which is one of the highest rates in OECD countries and some 20 percentage points above the OECD average. However, in terms of value, generic medicines accounted for 43% of the total pharmaceutical market. This level is rather high when compared to countries having similar shares in volume (Canada, the Netherlands) and could be explained at least in part by Latvia’s higher relative prices of generics in comparison to all other medicines (off-patent originators and on-patent medicines).

In addition, an overall distrust of generic medicines among prescribers and patients is frequently reported in Latvia, limiting possible additional efficiency gains (Salmane Kulikovska et al., 2019[49]). There are also currently no financial incentives for doctors to prescribe more generics, nor for pharmacists to dispense cheaper alternatives, and in fact the current distribution margins nudges pharmacists to sell more expensive products.

Ultimately, improving access to critical therapeutics in Latvia requires an increase in the funds available. This is necessary in order to enlarge Latvia’s positive list and ensure better financial coverage for medicines already reimbursed.

However, efficiency gains could also meaningfully complement upfront public investment (OECD, 2017[50]). Improving the knowledge of both patients and health professionals on generic medicines can contribute to this effort. New information campaigns and further efforts around initial and continuous professional education would improve understanding and trust of generics. Several countries have carried out information campaigns to promote the use of generics, explaining their equivalence to brand name drugs, including Belgium, Denmark, France, Greece, Italy, Portugal and Spain. In parallel, physicians need to be incentivised to prescribe more generics. Physicians need to be encouraged to prescribe cheaper products, by for instance creating explicit guidelines on the prescription of the cheapest alternative as first-intention medication, or nudged by prescription software that highlights price differences for products which are therapeutically equivalent. Financial incentives can also be used to encourage generic prescription. Latvia could take inspiration from the several OECD countries already using such financial incentives to improve the efficiency of pharmaceutical spending.

Pharmacists need to be remunerated in a way that incentivises them to dispense the least expensive products. Instead of margins that encourage pharmacists to dispense more expensive drugs, fixed fees per prescription or differentiated margins (between originators and generics for instance) can lead pharmacists to be either indifferent or willing to dispense generics, respectively. Overall, starting to disconnect community pharmacists’ remuneration from the price of medicines is a critical step for Latvia. A substantial share of OECD countries have initiated reforms in this direction. In France, distribution margins represented 81% of the remuneration of community pharmacists in 2014. In 2019, with the progressive introduction of various dispensation fees they only represented 26%. Various countries have introduced distribution fees to complement the mark-up remunerations (Denmark, France), while others have in some aspects almost entirely disconnected remuneration from mark-ups (Australia, New-Zealand). Introducing a level of disconnection between medicines prices and the remuneration of community pharmacies in Latvia could facilitate the control of pharmaceutical costs while safeguarding pharmacists’ remuneration.


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