Health Technology Assessment Anban Pillay Acting Cluster Manager: Health Economics and Financing National Department of Health

Outline Dispensing fee International Benchmarking Draft Guidelines on the Submission of Economic Analysis Health Technology

DISPENSING FEE

Dispensing definition 3 activities: Evaluation of script (advice for OTC) Preparation of medicine Advising patient Excludes: Compounding & admixing Delivery to patient – separate, transparent fee so patient can decide (but does include transport for emergency stock access)

Principles Appropriate: Affordability and availability Viability: cover costs and fair return on investment (ROI) but appropriate volume (2,300 pm – pharmacist & assistant) Closely approximate a professional fee (most flat rate) Encourage appropriate incentives

Costing ‘Normative’ model/zero-based estimate: key informant interviews, supplier data 100% dispensary only costs (fridge, etc.) 43% of space related (rent, electricity, etc.) 70% other costs (stationery, etc.) ROI of 10% on R450,000 (NHRPL precedent) Cross-check with stakeholder data R21-R22 VAT exclusive

Estimating income Estimate average dispensing fee per item – target of costs + ROI SEP bands critical: Medical schemes (90% of market) PSSA ‘mega-sample’ of pharmacies Key issue: 95% of volume have SEP< R250

Recommended dispensing fee (VAT exclusive) SEP band (VAT inclusive) Fixed Rand value % < R75 R4 33% R75 to <R250 R25 6% R250 to <R1,000 R33 3% R1,000+ R50 1.5%

Average dispensing fee

Response after Promulgation of the Dispensing fee PSSA prevented the implementation of the fee MoH agreed provided that case is heard on urgent basis Exchange of papers between parties No date for court hearing

International Benchmarking

Process Invitation for proposals on methodology Review of proposals Finalisation of draft methodology Publication for comment Review of comments Finalisation of methodology Implementation

Methodology Originator medicines Generic Medicines

Combination Drugs Assessed based on individual active ingredients TOTAL SEP = SUM OF COMPONENTS Dual methodology may apply

Different Trade Names Same Manufacturer Same actives Lowest SEP applicable

OTHER ISSUES “Temporary” price reductions Pharmacy administration fee – inappropriate Price changes and new product price introductions

Risk Sharing Proposals Pharmaceutical industry has come up with a range of risk sharing Proposals are related to rare diseases where therapy is expensive Usually limited clinical evidence to support use of the therapy Pricing committee needs to give approve such proposals

Billing for Anaesthetic gases Manufacturers of gases sell gases in ml or mg Patients cannot be billed for gases in minutes Low flow delivery available at private hospitals Hospital groups have been informed that their billing systems are inappropriate

Draft Guidelines on the Submission of Economic Analysis

Key Areas Details of the proposed drug and its proposed use Data from comparative randomised trials Modelled economic evaluation for main indication Estimated extent of use and financial implications

HEALTH TECHNOLOGY

Health Technology Assessment Quality Safety Efficacy Cost Cost Benefit / Cost Effectiveness

Health Technology - Quality Assessment of the quality of health technology Components of the devices Stds for the component/s Assessment of each component Assessment of all components operating as unit

Health Technology - Safety Assessment of the safety of health technology Safety to the patient Safety to the operator/ administrator Safety of the environment

Health Technology - efficacy Assessment of the efficacy of health technology Does the health technology do what is claimed? How well does it do this? How well does the technology work compare to the technology that we currently have?

Health Technology cost effectiveness/ cost benefit Comparative effectiveness of the new technology compared to technology currently available Comparative cost of the new technology compared to technology currently available

Clinical and Health Technology Guidelines Is there a need for separate public and private sector guidelines

GUIDELINES Both clinical guidelines and health technology assessment guidelines are based on evidence based medicine. Reasonable for the industry to adopt the public sector guidelines.

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