Medicine costs weigh on healthcare industry
July 6, 2009
Johannesburg - Medicines remain one of the largest factors influencing health care costs in the medical schemes environment, pharmaceutical benefit management company Mediscor PBM said on Monday.
According to the annual Mediscor Medicines Review (MMR), medicine expenditure in the South African private health care industry had increased by 26 percent between 2006 and 2008.
Commenting on the findings, Mediscor PBM managing director Christo Rademan said the average cost per beneficiary per annum, in terms of medication expenditure, had shown a sharp rise from R1 792 in 2006 to R2 258 in 2008.
"The 2008 MMR saw the average gross cost per item rise by 11.5 percent between 2006 and 2007 and by a further 9.5 percent between 2007 and 2008.
"This increase was the driving force behind the overall increase in medicine expenditure in 2007 and 2008," he said.
According to the 2008 MMR the Single Exit Price (SEP), which increased by 8.3 percent between January 2006 and December 2008, was a major contributing factor in driving medicine costs.
"Over the counter medicines, in particular, reflect an extremely high 13.6 percent increase between January 2006 and December 2008," said Madelein Bester of the company's benefit management sector.
She added that medicines registered with the Medicines Control Council prior to 2004 were responsible for a 9.7 percent increase in average gross item cost between 2006 and 2007 and again for a 7.6 percent increase between 2007 and 2008.
New chemical entities (registered after 2003) resulted in an item cost increase of 1.8 percent and 1.9 percent for 2007 versus 2006, and 2008 versus 2007 respectively, the MMR found.
"Although they contribute less to the total expenditure increase, new chemical entities are responsible for 4.1 percent of the total medicine expenditure, but represent only 1.2 percent of the total volume of medicines.:
She added that on a positive note the generic utilisation rate had shown a steady increase between 2006 and 2008, from 45.5 percent in 2006 to 47.4 percent in 2008.
She attributed this mainly to the fact that more generic alternatives were now available on the market while managed care initiatives, driving generic utilisation, were having the desired effect.
"The introduction of reference pricing and formularies promoting generic utilisation, greater public awareness and mandatory generic substitution at pharmacy level are also playing a vital role in driving generic utilisation." - Sapa
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