Influence of a new reference-based pricing system in South Africa on the prevalence and cost of antidiabetic medicine: a pilot study

Abstract

Objective: To determine the influence of the implementation of the new reference-based pricing system (single exit price or SEP) in South Africa on the prescribing prevalence and cost of antidiabetic medicine. Setting: Private healthcare sector of South Africa (national medicine claims processing company). Method: A retrospective drug utilisation study and basic cost analysis were conducted on antidiabetic medicine usage data. Data were extracted from a national medicine claims processing company's database for the period January 1, to December 31, 2004, and analysed according to three study periods: January 1 to April 31, 2004 (pre-SEP period). May 1 to August 31, 2004 (interim period) and September 1 to December 31, 2004 (post-SEP period). Key findings: The study population consisted of the total number of prescriptions claimed (n = 2 595 254) during the 1-year period. The total number of medicine items prescribed were 5 305 882, at a total cost of R661 223 146.00 ($102 375 382.80). Antidiabetics represented 2.7% (n = 143 447) of these, at a cost of R29 734 655.19 ($4 603 735.86) (4.5%). The average cost of insulin on the database for the year 2004 decreased by approximately R188.26 ($29.15) from the pre-SEP period to the post-SEP period, and that of oral antidiabetic products by approximately R47 ($7.28). The average cost of antidiabetic medicine products in general showed a decrease from the pre-SEP period to the post-SEP period - with a reduction in average cost of approximately R73 ($11.30) or 29.6%. Conclusion: The reduction in average cost of antidiabetic medicine products observed in this study could possibly be attributed to the implementation of new pricing regulations in South Africa in 2004. It is recommended that further investigations on the impact of the implementation of the new reference-based pricing structure in South Africa be done. © 2007 The Authors.