Potential cost savings from generic medicines—protecting the Prescribed Minimum Benefits

Abstract

Background: South Africa has followed a pro-generic policy since the introduction of the National Drug Policy in 1996. The selection processes in the public and private sectors have, however, remained largely disconnected, and at times contradictory. Medicines provided outside of hospitals accounted for 17% of medical aid spend in 2006, up 8.8% from the previous year. Of particular concern to funders has been the expenditure on the 27 chronic conditions listed as Prescribed Minimum Benefits. The Medical Schemes Act (No 131 of 1998) provides for the definition of Prescribed Minimum Benefits, which stipulate a package of services or care a medical scheme must provide for in its benefit design. There is pressure to reconsider these requirements in order to increase the affordability of medical scheme coverage. This study assessed the potential savings that would be achievable by substituting generics for brand name (originator) medicines listed in the chronic disease algorithms set out by the Council for Medical Schemes (CMS).