Is Medication Really That Expensive In South Africa?

In their September 2009 press release (Press release 7 of 2009); The CMS (Council for Medical Schemes) stated that a gross of R64.9 Billion had been paid by medical aids, in terms of benefits. Of this, medicines dispensed by pharmacists and other providers amounted to R11.2 billion accounting for 17.3% of scheme benefits paid out in 2008. In March 2007, the US House Oversight and Government Reform Committee heard evidence to the effect that prescription drugs constituted only 10% of the total costs of the US health care system. Similar statistics are reported by other countries.

The truth of the matter is that much of the money expended by any one country on its health care system is non – drug related and utilised on hospital care and physician and clinical services, not to mention administration costs. So why has the health care system become fixated on the cost of drugs? Several reasons come to the fore - the myth of marginal cost pricing and market power; limited time recovery of R&D costs; pharmaceutical research as a winner take most competition; interest group and academic opposition to intellectual property and last but not least, incentive structures of third-party payers and governments.

South Africa is unique in the sense that it does not as yet have a national health system, resulting in a dichotomy of health care funded by both state and private sectors. While State battles to come to grips with the vexing problems of manpower, management, remuneration, superannuated facilities and corruption – private healthcare funders face problems such as market share, inflation, administration and general cost containment. Both sectors, however, seem to have taken the easy route out and for that matter the one of least resistance, the cost of medication! Those of us that receive chronic medication from private healthcare are familiar with being subjected to a co-payment which in a nutshell equates to “use the generic or pay more at your own expense!” State, because it is driven by volume, purchases the generic version of any one particular drug purely because it makes economic sense. Sometimes, neither the original nor the generic are purchased by government, purely on grounds of cost. These instances of cost containment are detrimental to the sufferer of a particular disease.

The use of Biologics in the field of rheumatology immediately springs to mind. Both government and private health care funders are frightened by the cost of this class of drug and the erroneous assumption that they would have to file for bankruptcy should full access to the drug class be allowed by changing the arthritis PMBs on the Chronic Disease List (CDL) from Lupus and RA to include all Inflammatory arthropathies. Notwithstanding, both public and private health care funders have failed to take cognisance of the economic burden of cost of disease viz. repetitive physician, clinical and hospitalisation costs, the loss of man hours worked and the general cost to the economy resulting from a progressively degenerative disease which could otherwise be prevented by not using expense as an excuse. Certain funders fail to recognise the strict parameters regulating the prescription of a biologic. For instance, a biologic may only be prescribed by a rheumatologist after failure of the “usual suspects” (the classical DMARDS) and its use for any particular patient has to be SAARA (South African Arthritis and Rheumatalogical Association) approved. It is therefore safe to say that biologics is not a class of drug which is open to unrestrained use and a potential cause of catastrophic financial failure within the medical aid industry.

.Both American and European studies have shown that the use of a biologic within six months of diagnosis of an inflammatory arthropathy can in many instances, prevent or deter further progression of disease thereby preventing and/or limiting all ancillary costs. A study of the balance sheets within the South African medical aid industry indicates that relatively few medical schemes are in a position of comfortable sustainability. Certainly not because the funds are being thrown away on the costs of sorely needed life changing medication!


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