Use of expensive new drugs on the rise
CAPE TOWN — The use of expensive new drugs called biologics by medical schemes members is on the rise, putting medical schemes under pressure, medicines benefit management company Mediscor said on Friday as it launched its annual medicines review.
Mediscor’s comments add to growing concern expressed by medical schemes as they face increasing demand from their members for drugs such as Herceptin and Gleevec, used to treat breast cancer and leukaemia respectively. While the number of patients who are being prescribed these drugs by their doctors remains small, their high cost means schemes and their administrators have to tread a fine line between balancing the needs of individual members and the financial health of the collective.
Medical schemes are nonprofit organisations that are essentially managed as a trust that pays for their members’ medical bills.
“There is definitely an increase in the use of biologics and expensive cancer drugs. Volumes are still low, but the high costs are having an impact on schemes. If the utilisation continues to increase, it will have big knock on schemes,” said Mediscor’s manager of benefit management, Madelein Bester.
Mediscor manages the medicines claims for 32 medical schemes and five
Volumes are still low, but the high costs are having an impact on schemes. If utilisation continues to increase, it will have big knock
insurance products. Only the medical schemes were included in its analysis for last year, which showed that while overall expenditure on medicines fell 5% to just more than R2bn, schemes’ expenditure on state-of-the-art drugs launched in SA after 2007 increased 29,7% from 2010 to last year.
“Pharmaceutical companies put a great deal of money into drug development and it is understandable that they need to make a return on recently developed medicines while they still have the patent on them,” Mediscor medical adviser Elsa Badenhorst said. “This means, however, that many new chemical entities are relatively expensive and there is a concern … they are placing an increasing cost burden on medical schemes, which are often under a great deal of pressure to pay for such treatments.”
A class of cancer medicines called cytostatics, which includes some biologics, accounted for 6,7% of medical scheme expenditure last year, but only 0,3% of the items claimed.
The top five drugs by total expenditure (which gauged costs and utilisation) were Lantus for diabetes, Nexium for acid reflux, and Prexum for hypertension, and Gleevec and Herceptin. Patients on Gleevec cost schemes on average R266 862 a year, while those on Herceptin cost R182 348: these drugs were used by only a small number of patients but made it into the top five because they are so expensive.
Last month, SA’s biggest medical scheme, Discovery Health, said it had spent R600m, 12,5% of its total drug expenditure of R4,8bn, on biologics in 2010, and warned that the medicines
These drugs were used by only a small number of patients but made it into the top five because they are so expensive
were driving up its medicines bill.
Biologics are made from live organisms which target processes in the body that have gone awry and cause diseases such as cancer, multiple sclerosis and rheumatoid arthritis. As the drugs are relatively new, there are few generics, so there is limited competition and prices remain high.
Two weeks ago, Liberty Medical Scheme said it was concerned about the mounting costs of these products, which it said were “steadily pushing up” its medicines bill.
The scheme’s principal officer, Andrew Edwards, said part of the problem facing the industry was the fact that there was no consistency between schemes in their approach to these products.
“Adopting a collective approach to reviewing the clinical literature, establishing clinical benefit and ultimately negotiating acquisition price may be a Utopian ideal, but would be a progressive step to ensuring appropriate access for those patients most likely to benefit from expensive interventions,” he said.