The latest report by pharmaceutical benefits management (PBM) organisation, Mediscor shows a significant increase in the use of generics in South Africa with the utilisation rate of generic equivalents claimed by members of medical schemes in 2018, increasing to 62.4%, up from 59.9% in the previous year and 58.9% in 2017.

A key trend shown in the 17th edition of the Mediscor Medicines Review is that medicine expenditure per beneficiary increased by 2.8% from 2017 to 2018. This is significantly lower than the increases of more than 6% in the previous two years.  This increase was mainly due to a 3.2% increase in item cost, while utilisation decreased by 0.4%.  The figures are based on the claims data of more than 900 000 medical scheme members.

The cost of a basket of medicines, including all medicine schedules, increased by 1.3% from 2017 to 2018. Unscheduled and schedule 0 medicines, constituted 5.4% of the basket, and experienced a 5.1% increase from 2017, while schedule 1 to 8 medicines increased by 1%. An important contributing factor to the increase in item cost in 2018, is the increase in VAT, from 14% to 15% on 1 April 2018, the report noted.

Top therapeutic groups

The top 25 therapeutic groups for 2018 were responsible for 71.5% of overall expenditure and 64.8% of the volume of items. The groups included in the top five remained the same with antidiabetic agents and cytostatic agents switching positions two and three, and antiviral agents and gastric acid-reducing agents exchanging positions four and five. Antidepressants were sixth on the list.

 Top products

The top 50 products according to expenditure (amounting to 17.2% of expenditure and 10.7% of the item volume) included 19 generic equivalents, four originator products with generic equivalents, and 27 originator products with no generic equivalents.  The top products on this list were the insulin NovoMix® that remained in the top position for 2018, while two generic ARVs, Atroiza® and Tribuss® were in second and third position respectively.  The cytostatic agents MabThera® (500mg vial) and Herceptin® (600mg/5ml subcutaneous injection) were in 4th and 5th position respectively. Other products in top positions on this list are the Optisulin® pen (6th position), Avamys® nasal spray (7)  and the PPI, Altosec® (10).

The five most costly conditions on a per patient per annum basis amounted to 7.7% of expenditure and included haemophilia (R433 849), multiple sclerosis (R71 304), chronic renal disease (R19 938), Crohn disease (R15 327) and diabetes insipidus (R15 225).

Generic utilisation

The report emphasises the impact of generics in bringing down healthcare costs. It notes that the average item cost for generic equivalents was R119, compared to R153 for originals with expired patents and R287 for originals with valid patents. In 2018, originals with expired patents were, on average, 28% more expensive than generic equivalents, and originals with valid patents were 141% more expensive.

In 2018, generic equivalents accounted for 46% of overall expenditure, while originals with expired patents made up 14.4% and originals with valid patents 39.6%. For 2018, 77.7% of all products claimed were genericised items (i.e. items for which the patent had expired as well as their generic equivalents). In 80.4% of instances where a generic equivalent was available, the generic medicine was used. The generic utilisation rate was again highest for chronic benefit categories such as non-PMB chronic, HIV/AIDS and PMB benefits.

The highest generic uptake was again for HIV/AIDS medicines (94.9%), oncology (87.1%) and non-PMB chronic (84.5%). The lowest generic uptake was seen for OTC (75.6%) and PMB (78.2%).

Who is dispensing?

Of the paid medicine claims in 2018, 91.8% originated from pharmacies, of which 84.6% were from retail pharmacies, and 7.2% from courier pharmacies. Approximately 8% of claims were submitted by dispensing GPs, while 0.2% of claims were submitted by other providers, mainly oncologists. GPs have the lowest average item cost (R54), which can be explained by the high percentage of acute medicines they dispense (92.6%) and their high utilisation of generic equivalents. The GPs’ generic utilisation rate was 77.6% and their generic uptake 93.1%.

PMB spending up

The report also shows that expenditure on acute medicines decreased, while the expenditure and volume of medications prescribed for medicines for prescribed minimum benefit conditions continued to increase. These changes could be indicative of members electing to “buy down” to options with less day-to-day benefits, while still utilising the PMB benefits for their chronic conditions, the report noted.

Source: 2018 Mediscor Medicines Review