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

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

3. DISPENSING FEE

4. 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)

5. 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

6. 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

7. 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

8. 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%

9. Average dispensing fee

10. 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

11. International Benchmarking

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

13. Methodology
Originator medicines
Generic Medicines

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

15. Different Trade Names Same Manufacturer Same actives
Lowest SEP applicable

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

17. 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

18. 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

19. Draft Guidelines on the Submission of Economic Analysis

20. 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

21. HEALTH TECHNOLOGY

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

23. 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

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

25. 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?

26. 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

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

28. 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.

29. THANK YOU