Dispensing definition

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

• International Benchmarking

• Draft Guidelines on the Submission of Economic

• Health Technology
     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)

• 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

• ‘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        Fixed Rand
(VAT inclusive)       value     %

< R75                 R4       33%

R75 to <R250         R25       6%

R250 to <R1,000      R33       3%

R1,000+              R50       1.5%
                                       Average dispensing fee


Average dispensing fee per item





                                       0-24 25-49 50-74 75-99   100-   150-   200-   250-   300-   350-   400-   450-   500-   550-   600-   650-
                                                                150    200    250    300    350    400    450    500    550    600    650    700


                                                                                 4 tier         26%/R26
 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
• Invitation for proposals on methodology
• Review of proposals
• Finalisation of draft methodology
• Publication for comment
• Review of comments
• Finalisation of methodology
• Implementation
• Originator medicines

• Generic Medicines
            Combination Drugs

• Assessed based on individual active ingredients


• Dual methodology may apply
        Different Trade Names
• Same Manufacturer
• Same actives
• Different trade names
• Lowest SEP applicable
              OTHER ISSUES
• “Temporary” price reductions

• Pharmacy administration fee – inappropriate

• Price changes and new product price
           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
     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 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

• Comparative cost of the new technology
  compared to technology currently available
Clinical and Health Technology
  Is there a need for separate public
      and private sector 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.