15th Edition of Mediscor Medicines Review released

Author: Mediscor   Published: 2017-08-10

Source: 2016 Mediscor Medicines Review

MEDISCOR Pharmacy Benefit Management has launched the 15th edition of the Mediscor Medicines Review. Data gained from claims submitted by pharmacies, doctors and scheme members in 2015 and 2016 has been collated, compared and analysed. The data set included only fee-for-service medical schemes for which services were rendered for the entire period under review, representing approximately one million beneficiaries.

Key Trends for 2016

The medicine expenditure increase, measured as cost per beneficiary per annum, equates to 6.4 percent in 2016 compared with 5.9 percent in 2015. The increased expenditure is the result of a 5.1 percent rise in item cost, compounded by a 1.3 percent escalation in utilisation over the same period. The factor which most influences the change in the average item cost of medicine, is the annual single exit price adjustment (SEPA). The maximum SEPA allowed for 2016, was gazetted on 13 January 2016 and allowed for a maximum increase of 4.8 percent. An additional 2.9 percent hike, in the form of an interim adjustment, was awarded in September 2016. This compares with a SEPA of 7.5 percent for 2015.

The balance of the annual change in item cost relates to changes in factors such as, dispensing fees, the number of units dispensed, and changes in the mix of medicines used, for example, new chemical entities versus existing or generic medicines. New chemical entities (NCEs) are novel or innovator medicines that were launched in the South African healthcare market during the past five years (2012 to 2016). These newly launched entities accounted for 0.5 percent of the overall increase in medicine expenditure from 2015 to 2016, due to their high average cost. The average cost per item for existing medicines was R148, compared with R604 for these recently launched agents. The potential impact of NCEs on expenditure was mitigated since they only made up 0.4 percent of items dispensed.

It is encouraging to note that medical scheme members are realising the savings and advantages offered by the utilisation of generic medicine. The generic utilisation rate increased to 58.9 percent from 56.2 percent in 2015 and 55.6 percent in 2014. The generic uptake, or percentage of instances where the generic equivalent was available and used, increased to 78.6 percent from 76.5 percent in 2015 and 74.6 percent in 2014. For the period under review, the average cost per item for generic equivalents was R109, compared with R138 for originals with expired patents and R254 for originals with valid patents. General practitioners (GPs) had the highest generic utilisation rate of 72 percent with courier pharmacies placed second with 70.4 percent.

The Chronic Disease List

The funding of medicines used to treat the Chronic Disease List (CDL) conditions has had a significant impact on schemes’ financial reserves. For this reason, Mediscor has maintained a critical analysis on CDL spend. The top five CDL conditions by total expenditure, hypertension, diabetes mellitus type 2, HIV/AIDS, hyperlipidaemia and asthma, have remained stable from 2015, with no change in position. These conditions were responsible for 65.7 percent of the total amount spent on CDL conditions and 72.2 percent of the item volume in 2016.

Adherence to long-term therapy is defined by the World Health Organisation (WHO), as the “extent to which a person’s behaviour - taking medication, following a diet, and/or executing lifestyle changes corresponds with agreed recommendations from a healthcare provider”. Some members adhere better compared with others and one method of measuring the extent of adherence is to make use of a medicine claims database.

The analysis interrogated the medicine claims of 87 220 patients registered collectively for 149 421 chronic conditions over a 24-month period (January 2015 to December 2016). An adherence rate of 80 percent was reached by 61.0 percent of patients claiming for CDL conditions. Of the top five CDL conditions, the highest adherence rate of 77.3 percent was for HIV/AIDS, followed by 67.4 percent for diabetes mellitus type 2, and hypertension at 63.9 percent. Asthma had the lowest level of adherence at 25.0 percent.

Speciality Medicines

Despite numerous definitions of what speciality medicines are, they all have something in common, namely that they are costly. From 2015 to 2016, the expenditure on speciality medicines increased by 12.5 percent. Speciality medicines accounted for 10.3 percent of total medicine expenditure in 2016, with an average annual cost per patient of R88 357. As the understanding of the impact of speciality medicines expands, the healthcare industry continues to implement strategies to ensure their appropriate use. Current interventions include the application of medicine protocols, pre-authorisation procedures, formulary inclusion, speciality benefit design, and innovations to close loops existing in the access to treatment.

The Patient Experience

Within the competitive medical scheme environment, member satisfaction is key in retaining members. When implementing benefit design measures, risk can be transferred to members in the form of co-payments. The overall co-payment per item decreased from R16.16 in 2015 to R14.60 in 2016. Further good news is that the difference between the claimed and approved amounts (ie the amount charged above scheme rate) has shown a consistent downward trend, to 1.8 percent in 2016, from two percent in 2015 and 2.4 percent in 2014.

Source: 2016 Mediscor Medicines Review

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