Generic medicines un­packed

un­packed Stud­ies show that generic medicines are be­com­ing more pop­u­lar. RISKSA looks at the rel­a­tive cost dif­fer­ence be­tween gener­ics and patented medicines.

RISKSA Magazine - - CONTENTS - Neesa Mood­ley- Isaacs

It is cur­rently a le­gal re­quire­ment for phar­ma­cists and doc­tors to in­form pa­tients of generic al­ter­na­tives. “The in­ten­tion is to make sure that medicines stay within the reach of the ma­jor­ity of peo­ple liv­ing in South Africa and to im­prove the ac­cess to health­care. As al­lowed by pre­scribed min­i­mum ben­e­fit ( PMB) leg­is­la­tion, schemes are en­ti­tled to make use of for­mu­la­ries to man­age the costs as­so­ci­ated with the chronic treat­ment of PMB dis­eases. Pa­tients are fully en­ti­tled to refuse gener­ics or in­for­mu­lary prod­ucts; how­ever, they will be li­able for any cost dif­fer­ences that are in­curred,” says Peter Jordan, prin­ci­pal of­fi­cer of Fed­health med­i­cal scheme. Phar­ma­ceu­ti­cal ben­e­fit man­age­ment com­pany Medis­cor PBM, re­cently re­vealed that medicine ex­pen­di­ture has con­tin­ued the down­ward trend first ex­hib­ited in 2011, when spend de­creased by 5.1 per cent. Com­ment­ing on the find­ings of the 2012 Medis­cor Medicines Re­view ( MMR), Christo Rademan, man­ag­ing di­rec­tor of Medis­cor PBM, says medicine ex­pen­di­ture has again re­flected a de­crease, al­beit by a slight 0.6 per cent. “This is good news for health­care con­sumers and the med­i­cal schemes in­dus­try, as it in­di­cates that ef­forts to con­trol medicine costs are con­tin­u­ing to pay div­i­dends,” he com­mented. Ac­cord­ing to Rademan, a num­ber of com­plex, of­ten in­ter- re­lated fac­tors have contributed to the con­tin­ued re­duc­tion in medicine ex­pen­di­ture. He notes a 0.8 per cent de­crease in the use of medicines among the ap­prox­i­mately one mil­lion med­i­cal scheme mem­bers whose medicine us­age comes un­der scru­tiny in the MMR. There was lit­tle change ob­served in the item cost of the medicines used, which in­creased by 0.2 per cent.

Gener­ics gain­ing pop­u­lar­ity

“A pos­i­tive trend in re­cent years is the fact that health­care con­sumers are in­creas­ingly us­ing less ex­pen­sive generic medicines,” says Madelein Bester, man­ager of ben­e­fit man­age­ment of Medis­cor. “The num­ber of generic items claimed in­creased to 53.4 per cent in 2012, com­pared with 52.4 per cent in 2011 and 50 per cent in 2010.” The in­crease in the use of gener­ics is con­firmed by med­i­cal aid schemes can­vassed by RISKSA. Jonathan Broomberg, the chief ex­ec­u­tive of Dis­cov­ery Health, says the use of generic medicines has in­creased con­sis­tently since 2005. “Cur­rently, 20 to 25 per cent of the medicines avail­able have generic sub­sti­tutes. Generic med­i­ca­tion is used ap­prox­i­mately 65 per cent of the time where a generic can

be used, and the over­all us­age of gener­ics at Dis­cov­ery Health ac­counts for ap­prox­i­mately 45 per cent of all medicine claims,” he says. Prof. Jac­ques Sny­man, the clin­i­cal ad­viser at Res­o­lu­tion Health Med­i­cal Scheme, agrees, say­ing that since 2004 the pri­vate health­care sec­tor has been spend­ing 14 per cent more on gener­ics an­nu­ally with an av­er­age round of 55 per cent to 65 per cent at present, op­tion de­pen­dent. Neels Baren­drecht, the chair­man of Agility Global Health So­lu­tions, says in gen­eral doc­tors and pa­tients have re­alised that gener­ics are the way to go. “The per­cep­tion that gener­ics are in­fe­rior is fast fad­ing. How­ever, one has to take re­search into ac­count and, in some in­stances, the patented medicine has to be the first- line op­tion.


Jordan says new drugs are de­vel­oped un­der patent pro­tec­tion. “The patent pro­tects the in­vest­ment – in­clud­ing re­search, de­vel­op­ment, mar­ket­ing and pro­mo­tion – by giv­ing the com­pany the sole right to sell the drug while the patent is in effect, so that the com­pany can re­coup the money it has in­vested. Af­ter the patent ex­pires, any generic man­u­fac­turer can make a generic prod­uct equiv­a­lent and sell it at a lower cost and un­der a dif­fer­ent trade name. Once generic drugs are ap­proved, com­pe­ti­tion keeps the price down,” he ex­plains. Sny­man says the av­er­age time for an ex­piry date for a patent is 20 years, but this usu­ally drops to five to 10 years once the patent has been reg­is­tered in South Africa. “This is be­cause regis­tra­tion in South Africa is usu­ally four to five years af­ter first regis­tra­tion in Europe or the US,” he ex­plains. Ju­lia Hill, of med­i­cal hu­man­i­tar­ian or­gan­i­sa­tion Médecins Sans Fron­tières, says the avail­abil­ity of more af­ford­able generic med­i­ca­tion is be­ing blocked lo­cally be­cause South Africa grants drug com­pa­nies friv­o­lous patents that pre­vent or de­lay com­pe­ti­tion. “Un­nec­es­sar­ily high drug prices drive up med­i­cal aid rates and im­pov­er­ish peo­ple with life- threat­en­ing ill­nesses,” MSF’s Hill says. “If South Africa de­vel­ops a strong le­gal frame­work for its new patent law ( which is cur­rently be­ing drafted) pa­tients could have much bet­ter ac­cess to af­ford­able life- sav­ing medicines.”

Sig­nif­i­cant sav­ings

“An in­crease in the use of gener­ics re­sults in sig­nif­i­cant sav­ings for the health­care con­sumer, as well as med­i­cal schemes,” ob­serves Bester. “The use of gener­ics is en­cour­aged through the im­ple­men­ta­tion of for­mu­la­ries, ref­er­ence pric­ing and other ben­e­fit de­sign strate­gies. The MMR in­di­cates that the cost- ef­fec­tive­ness of gener­ics is in­creas­ingly be­ing em­braced by fun­ders and or­di­nary South Africans alike.” Jordan says generic drugs may be up to 30 per cent ( and of­ten more) more cost- ef­fec­tive than the brand name drugs. “Generic drugs are less ex­pen­sive be­cause they don’t re­quire the same in­vest­ment cost re­quired for the re­search and de­vel­op­ment of a new drug, which may to­tal bil­lions of Rand. These cheaper medicines can save pa­tients and med­i­cal schemes thou­sands without com­pro­mis­ing their qual­ity of care,” he says. “Tight man­age­ment on the part of health­care fun­ders can bear fruit while af­ford­ing much­needed pro­tec­tion for hard- pressed health­care con­sumers,” says Rademan. “Medis­cor re­mains com­mit­ted to tack­ling the chal­lenges of keep­ing health­care costs to a min­i­mum, while never los­ing sight of the fact that med­i­cal schemes ex­ist be­cause of their mem­bers and that their sole rea­son for be­ing is to en­sure that mem­bers re­ceive the most ap­pro­pri­ate and cost- ef­fi­cient med­i­cal care. “We will con­tinue play­ing a piv­otal role in the in­dus­try by iden­ti­fy­ing and ac­tively man­ag­ing cost driv­ers, and by work­ing in close part­ner­ship with our clients to stem the tide of run­away medicine costs to en­sure the longterm sus­tain­abil­ity of the health­care fund­ing in­dus­try,” he con­cludes.

Ef­fi­cacy of gener­ics

Broomberg points out that all medicines, in­clud­ing gener­ics, must be reg­is­tered with the Medicines Con­trol Coun­cil of South Africa ( MCC). “This regis­tra­tion en­sures that all medicines meet the re­quired stan­dards for safety, qual­ity and ef­fi­cacy.” Jordan adds that for the greater ma­jor­ity of medicines, generic drugs of­fer the same safety and ef­fi­cacy as their more ex­pen­sive equiv­a­lents. “The MCC re­quires that a generic drug de­liv­ers the same amount of the same ac­tive in­gre­di­ent into the blood­stream at the same rate and they’re very strict about this re­quire­ment,” he says.

Med­i­cal scheme poli­cies

Broomberg says the ben­e­fit de­sign of the med­i­cal schemes un­der Dis­cov­ery Health man­age­ment en­sures that generic medicines are pref­er­en­tially funded from the acute and chronic medicines ben­e­fits. “Acute medicines are funded without a co- pay­ment in the acute en­vi­ron­ment whereas non­generic med­i­ca­tion at­tracts a co- pay­ment of up to 25 per cent. In the chronic ben­e­fit, the chronic dis­ease medicine list pref­er­en­tially in­cludes gener­ics over their brand in­no­va­tor com­para­tors be­cause gener­ics of­fer a sig­nif­i­cant price ad­van­tage,” he says.

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