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Reducing the costs of medicine by dispensing generic medicine 25 September 2013

Reducing the costs of medicine by dispensing generic medicine 25 September 2013. Presented by: Christo Rademan – Managing Director. Where does the data come from? Legislation regarding generic substitution Generic utilisation trends in Namibia

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Reducing the costs of medicine by dispensing generic medicine 25 September 2013

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  1. Reducing the costs of medicine by dispensing generic medicine 25 September 2013 Presented by: Christo Rademan – Managing Director

  2. Where does the data come from? Legislation regarding generic substitution Generic utilisation trends in Namibia Factors that drive generic utilisation Measures to promote generic utilisation Contents

  3. Mediscor PBM • Pharmaceutical Benefit Management Company • Experienced – was established in 1989 and has been in business for more than 24 years • An independent company with 119 staff members • 85 Clients: medical schemes, insurance products, sick funds, price files • More than 1.6 million lives • Namibia: 4 open & closed schemes

  4. Legislation: Mandatory generic substitution • Medicines and Related substances control Act, 2003 (Act 13 of 2003) • Came into effect August 2008 • “A pharmacist must inform all members of the public of the benefits of substituting the requested medicine with an interchangeable multi-source medicine” • “And may dispense an interchangeable multi-source medicine instead of the medicine on the prescription”

  5. Generic utilisation rate (2013) • Namibia 31-45% • RSA 53% • USA 70%+

  6. Generic utilisation trends

  7. Generic utilisation trends South Africa 73.2% 57.0% 53.4% 43.0% 26.8% 27.7% 19.8% 15.3%

  8. Generic utilisation – SA vs. Namibia

  9. Generic utilisation trends Namibia 61.9% 61.1% Legislation had no impact 47.5% 44.9%

  10. Generic utilisation trends Namibia 61.9% 61.1% 47.5% 44.9% 38.1% 38.9% 16.2% 14.7%

  11. Generic utilisation 2013 % Expenditure % Volume

  12. Generic utilisation Per benefit category (2013)

  13. Generic medicines as a source of affordable health care Originals - valid patent Originals - expired patent Generic equivalents Based on 2013 data

  14. Cost per item – SA vs. Namibia R2.52 N$1.72 N$1.51 R1.39 N$1.00 R1.00

  15. Current dispensing fee structure – SA vs. Namibia NB: Namibian fee structure rewards dispensing expensive products

  16. SA maximum legislated dispensing fee Government Gazette, 19 November 2010

  17. Impact of SA max legislated dispensing fee on Namibia Data: Namibian Medical Scheme

  18. Factors that drive / influence generic utilisation • Availability of generic alternatives • Mandatory generic substitution • Prescriber and provider education / attitudes • Provider incentives • Procurement behaviour of providers • Consumer education • Funder rules / benefit design • Generic reference pricing • Formularies

  19. Measures to promote generic utilisation

  20. Success is achieved by engaging all the role players

  21. Promoting generic utilisation - funders Active pharmacy management Engaging roll players to promote generic utilisation Provider engagement – actively monitor pharmacy performance • Applying management tools (Patient Experience Monitor) • Monitoring co-payments at the point of service • Engaging with pharmacy to change dispensing behaviour • Specifying acceptable, cost-effective products during chronic authorisation

  22. Promoting generic utilisation - funders Member engagement – inform member of cost-effective generic alternatives • Promote high-performing pharmacies by area • Communicating these pharmacies via the authorization process • SMS messaging to members regarding co-payments • Communicating quarterly with pharmacies

  23. Tools to measure and model pharmacy behaviour

  24. Mediscor Pharmacy Management Objectives: • To actively work with Pharmacy to optimize dispensing behaviour • To reduce member co-payments, driving the concept of a ‘wallet-free’ experience • To drive generic substitution towards the use of Mediscor reference price (MRP) products • To drive members towards network pharmacies Ensures cost-effective delivery of benefits

  25. Value of PEM – Optimizes the experience • Measures the ideal behaviour per line • That can be rolled up by Option, Pharmacy, Group, etc. • Very powerful • Enables meaningful engagement at Pharmacy level • Enables network contracting and management Provides the ability to form preferred partnerships

  26. Tools to measure and model pharmacy behaviour

  27. Generic efficiency

  28. Conclusion • Generic utilisation decreased over the past 4 years • 16% of volume is from brands with patent expired • Multiple factors influence generic utilisation • Legislation had no impact! • Behaviour change needs to be driven by: • Rewards & incentives • Education • Provider engagement • Misalignment of provider and funder interests to be resolved

  29. Thank you! Any Questions?

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