Updated 06 March 2013

Biologics not a cure-all, says scheme

One of the biggest challenges associated with expensive, niched medicines is managing the false perception that they represent a panacea.


One of the biggest challenges associated with expensive, niched medicines, including drugs developed through biological origins (biologics), is managing the false perception that they represent a panacea, says Liberty Medical Scheme (LMS) Executive Principal Officer, Andrew Edwards.

“Management of this misperception is most important to ensure these products are used judiciously, in the most appropriate patient subgroups where robust published clinical trials have demonstrated clinically meaningful benefits,” Edwards argues.

Experiencing a growing demand for these specialised medicines, LMS, like some counterparts, is  concerned about the mounting cost of these products (for a minority of beneficiaries) which is steadily pushing up the medicine bill.

For example, Herceptin treatment for a person with HER2 positive breast cancer costs as much as R90 000 for nine weeks and R390 000 for 12 months, while the cost of Gleevec (for Philadelphia chromosome positive chronic myeloid leukaemia) is R360 000 per year and continues as long as the patient responds, which could be several years. In instances of resistant disease, the cost could be as much as R720 000 per year. 

Challenges private health care faces

These challenges affect the private healthcare industry as a whole, Edwards points out. “However, for various reasons, the industry is fragmented in its approach to managing access to these agents. Adopting a collective approach to reviewing the clinical literature, establishing clinical benefit and ultimately negotiating acquisition price may be a Utopian ideal, but would be a progressive step to ensuring appropriate access for those patients most likely to benefit from expensive interventions,” he reckons.

Moreover, the pipeline in the arena of expensive specialised medicines is reported to be extensive. “It appears that much of the R&D focus of many multinational drug companies is directed at the development of niche products intended for managing catastrophic diseases that afflict a relatively small number of people (as compared with other chronic diseases such as hyperlipidaemia or hypertension)”.  

“Added to this pipeline is the expansion of indications for currently registered products – for example a product originally indicated only for cancer, can now be used for rheumatoid arthritis as well”. Despite this broadening of indications, pricing strategy in many instances is unsympathetic to the commensurate expansion of people qualifying to use medicines such as these. Demand is therefore influenced not only by the new products developed, but also by those that are already available, but studied in different disease processes.  

At LMS, we believe this pressure will be experienced to a greater extent in the non-oncology arena and is exacerbated by PMB legislation. “Our experience is that more than 50% of expenditure relating to these specialised medicines is associated with multiple sclerosis, a CDL condition forming part of the PMB legislation. There is also an increased demand for these agents in diseases such as Crohn’s disease, ulcerative colitis, rheumatoid arthritis and systemic lupus erythematosus. We also note a demand to use some products in off-label (unregistered) indications as well, all of which add significantly to our medicine bill.”

Specialised medicines cost to be managed

Edwards says risk sharing agreements are one way of managing costs associated with the growing demand for these specialised medicines; however, such agreements are currently contrary to South Africa’s medicine pricing regulations. On the other hand, the potential to overlook critical clinical evidence in terms of the drug’s absolute benefit may be limited by such an arrangement, he cautions and explains.

“Much of the problem with these specialised medicines is that, while some patients experience clinically significant benefit, many patients don’t, leaving a large unmet need in terms of managing the conditions for which these agents are registered. This implies that even in optimal conditions patients may only demonstrate moderate responses, at best. Therefore, the ongoing employment of a rigorous evidence-based medicine approach is important to cost-efficient resource allocation and to ensure that therapy and funding are targeted at those patients most likely to benefit from such an intervention.”

(Press release, Liberty Medical Scheme, July 2012)   


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