been a lot of hype recently around new high-cost biologicals (pharmaceuticals
derived from living organisms), and increasing debate as to whether the general
public will be able to afford them.
to an article on centerwatch.com,
currently less than 10% of the top listed pharmaceutical companies’ marketed
products are biologic drugs, but these products nevertheless comprise 40% of
these companies’ drug pipelines. Most of these pipeline biologicals focus on
the treatment of cancer, infection and central nervous system diseases.
Jordan, Principal Officer of Fedhealth, says it is interesting to note that new
biologicals are not the only drugs which will lead to an increase in medicine
costs. In 2012, 39 new drugs were approved by the FDA. These are some of them.
The top 5 on this list are not biological drugs.
Of the nine
new listed cancer treatments approved by the FDA last year, only two were
biological – Erivedge, completely new in its class for the treatment of
advanced skin cancer (basal-cell cancer), and Zaltrap, used in the
treatment of advanced colorectal cancer.
schemes it is always a major challenge to try and justify the cost of these new
drugs compared against the patient benefit. Looking more closely at Zaltrap as
an example - results from a main study showed that use of the drug came
with a significant increase in problem side effects and more than double the
number of patients in the Zaltrap trial actually dropped out of the study when
compared to the patients only on standard therapy. By today’s exchange rate,
the cost of Zaltrap is R101 880,00 per month ($11 000), for an average
additional survival advantage of 1.44 months compared to standard chemotherapy.
hundreds of other drugs in the pipeline which will have similarly high price
tags,” he says.
So how are
medical schemes dealing with the high cost of treatment? “While Fedhealth
embraces true innovation, we agree with sentiments expressed by a group of
cancer experts in a recent article in global publication, Blood. We believe
drug prices should reflect objective measures of benefit, but should also not
exceed values that harm our patients and societies,” says Jordan
managed care protocols are developed after extensive research is done involving
careful analysis of trial data and consideration of international and local
funding and clinical recommendations. “Critical questions asked when appraising
a new drug include how much value it adds. This includes whether the new drug
provides significant advances over existing therapies already funded or whether
it offers advantages in terms of safety (fewer side-effects). If there
are no appreciable advantages to the members being treated, or their families,
the principles of cost-minimisation are applied i.e. the alternative therapy is
this, actuarial analysis is done to determine the impact that funding of a new
drug may have on contributions and how best to manage access by
means of benefit design.
the scheme is engaging with doctor networks in partnering to make decisions
about the appropriate use of these expensive drugs. Where a new drug is funded
by Fedhealth, managed health care programmes monitor whether the drug is used
in the correct setting, as indicated, and conduct regular reviews to determine
ongoing response. Where a new drug is not funded, or only funded by Fedhealth
in restricted settings, engagement with the pharmaceutical companies has led,
in some instances, to reductions in the South African single exit price,”
in healthcare spend on new drugs is inevitable, but, says Jordan, Fedhealth
will continue to base funding decisions on scientific assessment of benefit
versus harms, “while considering affordability, of course. We will also exert
pressure, where possible, to strive toward value-based pricing of drugs,” he