How medical schemes will manage the cost of pharmaceuticals in 2010
The 13.2% increase in the Single Exit Price of medicines awarded by the Minister of Health on December 24th 2008, caused a knock on effect of between 8 and 10 percent on the price of private healthcare between January and October 2009, according to Mathew Dijkstra, Clinical Operations Director of Medikredit.
‘The 13.2% increase was awarded long after medical schemes are required to submit proposed increases in premiums to the Council for Medical Schemes, which is the end of September,’ said Graham Anderson, Principal Officer of Profmed Medical Scheme. ‘While we would have made provision for a 6% increase or so, the 13.2% took everyone by surprise.’
Anderson said that Profmed had experienced price and utilization trends in line with other medical schemes.
The cost to medical schemes of acute medicines increased by more than 17% between January and the end of October, and the cost of chronic and prescribed minimum benefit medicines increased by 15% over the same period. These costs were a function of both utilization and price increases, attributed largely to the early and prolonged flu epidemic, compounded by the H1N1 virus.
‘2009 was a heavy year in terms of pharmaceutical spend and consumption for medical schemes,’ said Dijkstra.
Looking to 2010, Dijkstra said that medical schemes would have to find innovative ways of managing increasing costs of pharmaceuticals. These included increased use of generic medicines as well as greater use of cheaper medicines in the same therapeutic groups. He said that the use of generic medicines had increased patients’ choice of pharmaceuticals, resulting in an increase in generic utilization from 20% of total chronic drugs dispensed in 2002 to 44% in 2009.
Drugs in the same therapeutic groups work towards achieving the same objectives, for example lowering blood pressure, but may contain different underlying ingredients. There is a wide price range of drugs within therapeutic groups. In general terms, the older groups of drugs are suitable for most people while the newer drugs have been developed for people who develop side effects or who have co-morbidities.
‘We will be presenting our members with more pharmaceutical-related choices in our benefit design next year. ‘Reference pricing’, a broad term which allows medical schemes to contain costs by favouring cost effective choices, encourages members to be active participants in their health management. From a scheme management point of view, it allows for cost containment, while giving members choice of the medicine they prefer to use,’ said Anderson.
