Potential savings from generic prescribing and generic substitution in South Africa.
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Generic prescribing and generic substitution are mechanisms for reducing the cost of drugs. The purpose of this study was to assess the extent to which generic prescribing by private medical practitioners and generic substitution by private pharmacists is practised in South Africa and to estimate the potential savings from these two practices. Prescriptions from 10 pharmacists were collected on four randomly selected days. Computer printouts of all the prescriptions dispensed on these four days together with the original doctor's prescription were priced using a commercially available pharmacy dispensing computer package. A total of 1570 prescriptions with a total number of 4086 items were reviewed. Of the total prescriptions, 45.7% had at least one item for which there was a generic equivalent. Of the 961 drugs which had generic equivalents, 202 (21 %) were prescribed using the generic name of the drug. Only 0.3% of prescribers prohibited generic substitution. The cost of the prescription as dispensed was 1.4% (mean cost: R116.19 vs R117.84) below that of the original doctor's prescriptions, indicating the marginal benefit from the current low substitution rate of 13.9% by pharmacists. About 6.8% of the cost of the original doctor's prescriptions (mean cost: R117.84) could have been saved if total generic substitution (mean cost: R109.65) was practised. The cost of the prescriptions with only brand name items (mean cost: R120.49) would have been 9.9% higher than if generic drugs were used. Current restrictive prescribing and dispensing practices result in marginal cost savings from generic prescribing and generic substitution. Both these practices have a potential to reduce drug costs, if actively encouraged and practised to maximum capacity. It is noteworthy, however, that the potential savings from generic prescribing and substitution are at most 9.9% in the absence of any changes in types of drugs prescribed. (+info)
Considerations in pharmaceutical conversion: focus on antihistamines.
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The practice of pharmaceutical conversion, which encompasses three types of drug interchange (generic, brand, and therapeutic substitution), is increasing in managed care settings. Pharmaceutical conversion has numerous implications for managed care organizations, their healthcare providers, and their customers. Although drug cost may be a driving consideration in pharmaceutical conversion, a number of other considerations are of equal or greater importance in the decision-making process may affect the overall cost of patient care. Among these considerations are clinical, psychosocial, and safety issues; patient adherence; patient satisfaction; and legal implications of pharmaceutical conversion. Patient-centered care must always remain central to decisions about pharmaceutical conversion. This article discusses the issues related to, and implications of, pharmaceutical conversion utilizing the antihistamines class of drugs as the case situation. (+info)
Generic drug product equivalence: current status.
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This activity is designed for healthcare professionals involved in the selection of multisource drug products. GOAL: To understand the basis for approval of generic drug products by the Food and Drug Administration. OBJECTIVES: 1. Identify the criteria employed by the Food and Drug Administration to approve generic drug products. 2. Discuss controversial issues that have been raised relative to generic drug products. 3. Identify narrow therapeutic index drugs. 4. Describe the different types of bioequivalence studies that are required by the Food and Drug Administration. 5. Discuss the responsibilities underlying the selection of multisource drug products by healthcare professionals. (+info)
Essential drugs for cancer therapy: a World Health Organization consultation.
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The WHO has previously produced recommendations on the essential drugs required for cancer therapy. Over the last five years several new anti cancer drugs have been aggressively marketed. Most of these are costly and produce only limited benefits. We have divided currently available anti-cancer drugs into three priority groups. Curable cancers and those cancers where the cost-benefit ratio clearly favours drug treatment can be managed appropriately with regimens based on only 17 drugs. All of these are available, at relatively low cost, as generic preparations. The wide availability of these drugs should be the first priority. The second group of drugs may have some advantages in certain clinical situations. Based on current evidence, drugs in the third group are judged as currently not essential for the effective delivery of cancer care. Adequate supportive care programmes with the widespread availability of effective drugs for pain control are of considerably greater importance. The adoption of these priorities will help to optimise the effectiveness and efficiency of chemotherapy and ensure equitable access to essential drugs especially in low resource environments. Clearly this paper represents the views of its contributors. The WHO welcomes feedback from all oncologists so that the advice it gives to governments in prioritising the procurement of anti cancer drugs can be as comprehensive as possible. (+info)
The effect of a copay increase on pharmaceutical utilization, expenditures, and treatment continuation.
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OBJECTIVE: No research has evaluated the impact of an increase to a copay that is reflective of today's healthcare market. This study examined the effect of an increase from a $10 to $15 copay for brand drugs on key pharmaceutical utilization measures, including participation rates, treatment continuation, and expenditures, in an adult population. STUDY DESIGN: A quasi-experimental, pre-post design with control group was used. PATIENTS AND METHODS: Two different employer plans implemented an increase from $10 to $15 for brand copays in January of 1997. The utilization and expenditures of these plans were compared with those of a control group with a constant brand copay of $10 for 6 months preceding and 6 months following the copay increase. RESULTS: When other predictor variables were controlled for, the copay increase was not associated with a statistically significant difference in overall utilization compared with the control group, although brand utilization was significantly lower in the copay group. Savings to the payer were substantial, and resulted primarily from cost-shifting, reduction in brand utilization, and an increase in the generic fill rate. The rates of continuation with chronic medications in the 6 months following the copay increase were not reduced in the copay group compared with the control group. CONCLUSION: A copay increase can provide substantial savings to a payer without being a major deterrent to overall utilization or resulting in discontinuation of chronic medications. (+info)
Effect of multiple-source entry on price competition after patent expiration in the pharmaceutical industry.
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OBJECTIVE: To analyze the effect of multiple-source drug entry on price competition after patent expiration in the pharmaceutical industry. DATA SOURCES: Originators and their multiple-source drugs selected from the 35 chemical entities whose patents expired from 1984 through 1987. Data were obtained from various primary and secondary sources for the patents' expiration dates, sales volume and units sold, and characteristics of drugs in the sample markets. STUDY DESIGN: The study was designed to determine significant factors using the study model developed under the assumption that the off-patented market is an imperfectly segmented market. PRINCIPAL FINDINGS: After patent expiration, the originators' prices continued to increase, while the price of multiple-source drugs decreased significantly over time. By the fourth year after patent expiration, originators' sales had decreased 12 percent in dollars and 30 percent in quantity. Multiple-source drugs increased their sales twofold in dollars and threefold in quantity, and possessed about one-fourth (in dollars) and half (in quantity) of the total market three years after entry. CONCLUSION: After patent expiration, multiple-source drugs compete largely with other multiple-source drugs in the price-sensitive sector, but indirectly with the originator in the price-insensitive sector. Originators have first-mover advantages, and therefore have a market that is less price sensitive after multiple-source drugs enter. On the other hand, multiple-source drugs target the price-sensitive sector, using their lower-priced drugs. This trend may indicate that the off-patented market is imperfectly segmented between the price-sensitive and insensitive sector. Consumers as a whole can gain from the entry of multiple-source drugs because the average price of the market continually declines after patent expiration. (+info)
Managing drug costs: the perception of managed care pharmacy directors.
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OBJECTIVE: To examine the perceptions of health plan pharmacy directors about drug costs and utilization drivers, interventions the plans use to control drug expenditures, and strategies considered necessary to permit continued provision of a comprehensive drug benefit. STUDY DESIGN/METHODS: A multipart survey developed and mailed to 500 pharmacy directors of managed care organizations across the country. RESULTS: The survey respondents (response rate = 18%) represented managed care health plans in the following percentages: 49% of respondents were from network/independent practice associations; mixed-model health maintenance organizations (HMOs), 20%; group HMOs, 15%; and staff-model HMOs and network/preferred provider organizations, 8% each. Drug mix and utilization were reported to be the primary drivers of drug expenditures. Half the respondents rated inflation as a somewhat strong cost driver. Interventions the health plans use to control drug expenditures include formularies, generic substitution, preauthorization, manufacturers' rebates, drug benefit design, physician profiling, target drug programs, academic detailing, and tiered copays. With the exception of formulary use, generic substitution, and manufacturers' rebates, which all the plans have instituted, the types of interventions used by the different model types vary widely. More than half the pharmacy directors reported generic substitution, drug benefit design, and differential copays as very effective interventions used to control drug costs. CONCLUSIONS: The majority of pharmacy directors predict continued double-digit increases in drug expenditures over both the short term and the long term. Of the respondents, 91% reported that additional limits and/or exclusions to the benefit design would be necessary to control these increases. To continue providing a comprehensive drug benefit, 54% indicated that they would have to achieve sufficient cost savings in other areas to offset increases in drug costs. (+info)
Cost effectiveness of rabeprazole versus generic ranitidine for symptom resolution in patients with erosive esophagitis.
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OBJECTIVE: To compare the cost effectiveness of rabeprazole (RAB) and ranitidine (RAN) in acute and maintenance therapy for erosive esophagitis using symptom response, rather than endoscopic healing, as the clinical outcome. STUDY DESIGN: Decision analysis was used to model the cost effectiveness of competing therapies based on the results of clinical trials of RAB versus RAN and estimates from the medical literature. METHODS: The model's base case scenario compared brand-name RAB (estimated average wholesale price) with generic RAN (25% of the average wholesale price of brand-name RAN). Medical costs for hospitalizations, procedures, and office visits reflected 1998 Medicare payments. The 1-year maintenance model accounted for drug-class switching and symptomatic, rather than endoscopic, recurrences. Effectiveness was reported as the percentage of patients in whom a symptomatic recurrence was prevented. The cost per symptomatic recurrence prevented was reported as an average and an incremental cost-effectiveness ratio. RESULTS: The per-patient cost of RAB therapy was higher than that of RAN therapy ($2020 vs $1917); RAB therapy, however, was more effective than RAN therapy in preventing symptomatic recurrences (74% vs 41%). The average cost-effectiveness ratio was lower for RAB therapy than for RAN therapy ($2748 per symptomatic recurrence prevented vs $4719 per symptomatic recurrence prevented). The cost of preventing one additional symptomatic recurrence with RAB rather than RAN was $313 (incremental cost-effectiveness ratio). Sensitivity analysis conducted on key clinical and cost variables supported the robustness of the decision model. CONCLUSION: This analysis demonstrates that management of esophagitis with RAB is more effective, and may be more cost effective, than management with generic RAN, despite RAB's higher per-unit cost. (+info)