Experience of a medicines reference-pricing model

To measure the impact of a medicines reference-pricing programme covering items for which appropriate generic equivalents are available.

The list of covered items was continuously monitored and updated by clinicians and pharmacists employed by Medscheme, and was published as the Medscheme Price List (MPL). Prospective and retrospective analyses of prices of medicines covered by the MPL were carried out and the effect of the programme on expenditure by medical schemes was measured.

The programme had an immediate effect on the rate of medicines inflation after implementation as a result of switching from original or branded products to generic medicines or switching from higher-priced to lower-priced generic equivalents.

Over the past few years Managed Care has focused on strategies aimed at reducing utilisation of health care services and/or benefits by members of medical schemes. These strategies have largely been directed at members and health care providers, with little attention paid to suppliers (e.g. the pharmaceutical industry). This study has shown that a supplier-directed strategy has merit and is capable of substantially reducing expenditure on medicines.