Biologics' sickening cost

26 January 2015 - 09:30 By Katharine Child
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Jonathan Broomberg. File photo.
Jonathan Broomberg. File photo.
Image: Robbie Tshabalala

How much does a life cost?

New drugs called Biologics offer life saving hope to many individuals but threaten to drive up health spending to unsustainable levels – leaving medical aids with exorbitant costs and individuals unable to afford them.

There are about 250 such drugs, according to pharmaceutical consultant Val Beaumont helping 350 million people worldwide.

She said new funding mechanisms will need to be designed to pay for these as medical aids cannot keep up with the costs.

The newest biologic on the market released on Thursday in South Africa for stage 4 Melanoma  gives dying patients  about 25% of surviving. Last week, Discovery Health received its first request for the drug,  Ipilimumab,   at a cost of R2.1 million for the member. It's oncology advisory board is reviewing the request.

Liberty Medical Scheme spends about  15% percent of its pharmaceutical budget on biologics drugs for only 275 members. 

In 2013, Discovery Health Medical Scheme spent R1-billion out of its R7-billion on drugs on these biologics for about one percent of members.

Discovery Health CEO Jonathan Broomberg said: "In 2013 there were 25,000 members claiming for high cost speciality medicines, up from 12,000 in 2008".

Biologic medicines include Herceptin for a particular breast cancer tumour, and chronic medicines for rheumatoid arthritis and inflammatory bowel disease.

Broomberg said: “The annual average cost per member for speciality medicines is approximately 10 times higher than the cost of a member taking non biologic chronic medicine”.

Currently Durban resident 22-month-old  baby Brooklyn Rex has a rare  a rare disease called  Hemophagocytic Lymphohistiocytosis. Her parents  import a biologic drug to keep her alive and prevent her from suffering from juvenile arthritis. As the biologic  is not yet available in South African medical aids are not legally obliged to pay for it leaving the family raising more than R21 000 a month to keep their daughter alive.

Liberty Medical Scheme Principal Officer Andrew Edwards said besides high prices and increasing use, another problem with the medicines is they didn’t always work.

“One of the biggest challenges is managing the false perception that they represent a panacea.

“Much of the problem with these specialised medicines is that, while some patients experience clinically significant benefit, many patients do not.”

Many more such drugs coming to market.

Broomberg said: “According to IMS, a health research consultancy, biologics make up 36% of the late-stage pipeline medicines and 45% of the late stage oncology pipeline. IMS believes  global spending on all cancer drugs, will  reach about $100 billion in 2018, up from $65 billion in 2013”.

Beaumont explained that low number of patients, huge investment and the way the drugs are manufactured push up the prices. 

Biologics, are often a copy of a particular protein or molecule from the body. The protein is grown in living cells in a lab in a process that could take months.

If a batch of drugs goes wrong, it can take months before a new batch is ready. 

Fedhealth Principal Officer Peter Jordan said: “Medical aids are tasked with managing their funds in order to provide necessary coverage to all their members. They often have to rely on the principle of providing as much as possible to as many as possible of their members. Unfortunately, as the scheme funds are limited in order to keep member contributions affordable, some treatments and technologies have to be excluded from funding, or their funding may be limited. Fedhealth considers the overall scheme affordability, cost-effectiveness and medical evidence for new treatments when deciding on if and how these should be funded.”

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