The Single Exit Price regulations, which came into effect in 2005 and govern the pricing of prescribed medicines (Schedules 1-7 drugs), have had a massive impact on the medical scheme industry. The regulations dictate that prices can only increase once a year and only up to a maximum percentage as published by the Minister of Health in the Government Gazette.
The reference price is a limit to the financial benefit available for your medication (drug). If the cost of the drug that you are using is greater than the applicable reference price, then you will be required to pay the difference between the cost of your drug and the reference price at the point of sale.
Profmed applies a generic reference pricing model to acute medicines, and both generic and therapeutic reference pricing to medicines used in the management of chronic conditions.
Refer to the MediKredit website at www.medikredit.co.za for a list of the categories to which MMAP®applies and the limits applicable.
A generic drug is a copy of the original drug that may be sold once a company’s patent on a brand-name drug has expired. Generic drugs have the same active ingredient(s), strength and dosage form as the original drug. Generic drugs are typically cheaper than the original or brand-name drug as they don’t carry the research and development costs that are incurred by the originating company. Furthermore, raw materials become more widely available on world markets. Generic pharmaceutical companies compete with each other thus driving down the costs of medicines.
Generic drugs may have a different name and look or taste different because of the choice of the inactive ingredients such as colouring, binding and flavouring. By law the active ingredient(s) in the generic and brand-name products must be exactly the same.
The drug regulatory authority of each country, in the case of South Africa, the Medicines Control Council (MCC), has strict criteria that must be applied before a generic drug is registered. No drugs may be sold without this approval. All pharmaceutical manufacturers must comply with ‘Good Manufacturing Practices’ as prescribed by the MCC and they are regularly inspected.
All generic products are however not interchangeable with brand-name products. The MCC has drawn up a specific list of “Non-substitutable Medicines” that should not be interchanged. These are excluded from MMAP® consideration.
In May 2003, the law regarding substitution of an original drug with a generic equivalent changed. By law, your pharmacist should advise you on the availability and benefits of a generic equivalent drug. He or she should dispense a generic equivalent drug unless:
Generic substitution can reduce the price of your medication and assist you in managing your medication benefit to ensure that you maximise the value of your medical scheme benefits. This helps to contain total medicine expenditure, which in turn limits annual contribution increases.
Profmed applies therapeutic reference pricing to all registered chronic conditions, therefore if you or one of your dependents are registered with a chronic condition, you will be affected by reference pricing limits. A therapeutic reference price applies to drugs that fall in the same drug class or have a similar action on the body, and is not limited to drugs with generic equivalents.
The therapeutic reference price will differ from one option to another. For example: the reference price for ProPinnacle will be higher than that for ProActive. Therefore your co-payment due to reference pricing may be lower or even not applicable if you are a member of ProPinnacle compared to ProActive. The reference price is determined and maintained by a team of clinical experts who monitor changes in therapy and apply cost-effective medicine management. It is important to note that there are always drugs available that are below the reference price for a therapeutic class (drugs with similar ingredients).
The first step is to always ask your pharmacist or healthcare provider for a generic alternative. This is the same ingredient, strength and dosage form as the original product but manufactured or marketed by a different manufacturer. This will in many cases result in no co-payment or reduce any potential co-payments by you.
Secondly, if you prefer not to pay a co-payment then your doctor can advise you what your therapeutic alternatives are that will be below the reference price. Your doctor can contact Swift Online on 0800 132 345 to discuss possible alternatives with the clinical consultant, and will need to supply you with an amended prescription if he/she agrees to change your medication to a drug that is below the reference price. Please refer to the list of medication (called a formulary) which will assist you in making an informed decision regarding the product you wish to use in order to avoid a co-payment.