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Pharma Market Access under a South African National Health Insurance system

Pharmaceutical market access will look very different under a South African national health insurance system.

A national health insurance system would result in an integrated healthcare system founded on the principles of solidarity and redistribution of healthcare resources. Every South African would contribute to funding the national health insurance system and in return receive “free” healthcare services when needed. 

Others have said much about national health insurance. For instance:

  • The Solidarity Research Institute believes that national health insurance will collapse the healthcare system.
  • The Free Market Foundation believes the national health insurance will be a gateway for corruption.
  • An academic at the Wits University School of Governance thinks national health insurance will deteriorate both the public and private healthcare systems. 

A patient’s access to innovations from a pharma market access perspective

In all this debate, a key question is how a national health insurance system impacts a patient’s access to innovations from a pharma market access perspective? The question is so fundamental because pharmaceuticals and medical devices are one of the most important interventions to reduce mortality and morbidity in healthcare systems.

To appreciate the importance of pharmaceuticals and medical devices, imagine for a moment a world without pharmaceuticals and medical devices? Access to innovations has over the decades been a major driver in reducing the burden of disease and prolonging life. The South African national health insurance system will include access to essential medicines but how likely is the government to buy new healthcare technologies for the national health insurance system? 

Insights from the Global Competitiveness Report

An indicator may help us predict the ability of the South African government to increase pharmaceutical market access, including medical devices. The Global Competitiveness Report 2018 by the World Economic Forum measured the “future orientation of government” in 140 countries and South Africa ranked 102. 

There were four questions in this category:

  1. How fast is the legal framework of your country in adapting to digital business models (e.g., e-commerce, sharing economy, fintech, etc.)? 
  2. To what extent does the government ensure a stable policy environment for doing business?; 
  3. To what extent does the government respond effectively to change (e.g., technological changes, societal and demographic trends, security and economic challenges)?; 
  4. To what extent does the government have a long-term vision in place? 

The questions are not related directly to pharmaceutical market access under a South African national health insurance system. However, they provide an important clue on how the government will consider new technologies, the policy framework and its flexibility, and the extent the government can think ahead.

South Africa’s low ranking on the Global Competitiveness Report suggests an uncertain future for government funding of new healthcare technologies. It ranked slightly better than Haiti and Zimbabwe but worse than Mali and Burkina Faso. Patients covered by the national health insurance system are unlikely to benefit from new medicines and medical devices available in the private and international market. 

Figure 1: Pharma Market Access under a South African National Health Insurance system

The advantages and disadvantages of a South African national health insurance system

The success of NHI depends on the final national health insurance model and how national health insurance will work in practical terms. It also depends on how national health insurance policy will impact the health needs of a very diverse patient population.

For instance, national health insurance for senior citizens, for families, for government employees, and regulating national health insurance for foreigners. It also depends on the ability of pharma market access staff and their companies to address the advantages and disadvantages of a South African national health insurance system

We’ve compiled a list of the advantages and disadvantages related to national health insurance. The list is not exhaustive, there’s a lot more that we could add, but the purpose is to encourage a balanced and critical approach.

The advantages of a South African national health insurance system

  • Financial risk protection. No person should be rendered poor because of unexpected healthcare expenditure.
  • Reduction in out-of-pocket payments. To access healthcare services many South Africans must pay at the point of service.
  • Improved affordability and access to health care services. With national health insurance, healthcare services outside of the reach of the poor and vulnerable members of the community, will now be within reach.
  • Earlier healthcare interventions: patients that delayed seeking healthcare services may now act earlier.
  • Sustainable care: patients with chronic conditions are less likely to interrupt medicine consumption or healthcare services due to financial constraints.
  • Improved social cohesion: national health insurance covers all members of society, including the rich and the poor, the young and the old, women and men, and employed and unemployed.
  • Risk pooling: by including everyone under the national health insurance system, it spread the risk of adverse health events across a large group of people.
  • Improved benefit transparency: a well-designed and communicated benefits package may improve the transparency of entitlements for everyone covered under the national health insurance system.
  • Improve the quality of life. Through access to essential health care services and financial risk protection, the overall quality of life of those covered by the national health insurance system will improve.

The disadvantages of a South African national health insurance system

  • NHI depends on a strong economy: South Africa’s slow economic growth and increasing emerging-market financial risk reduce the amount of resources available for the national health insurance system.
  • Inefficiencies in state-run agencies. The poor track record of state-run agencies in managing public resources, such as Eskom and SAA,  may provide a glimpse into future obstacles faced by a national health insurance system.
  • NHI requires investments in equipment and infrastructure: the quality of South Africa’s public healthcare infrastructure is weak as evidenced by the Office of Health Standards Compliance.
  • Human resources for NHI. Evidence suggests there are insufficient healthcare workers in the public sector to manage the future demand. Providers in the private healthcare system will hesitate to join the national health insurance system.
  • NHI depends on strong service delivery. Poor service delivery by government-run hospitals results in significant harm to patients. This is evidenced severe harm caused to patients in Gauteng’s hospitals and growing medico-legal expenses at all levels of the healthcare delivery system.
  • Strong governance facilitates NHI. The poor management of access and funding for trastuzumab (indicated for HER2-positive breast cancer patients) in the public sector, may be the canary in the coal mine. In demonstrates how the national health insurance system may enable access to new healthcare services and technologies.
  • Improvements in quality-of-care boost the success of NHI. South Africa’s public health care system has not implemented meaningful processes that lead to improvements in quality of care, eroding the confidence in a national health insurance system.
  • Transparent and strategic purchasing strengthen the NHI system. South Africa faces serious corruption problems as evidenced by the Transparency International Corruption Perceptions Index. It suggests that the national health insurance system will encounter bribery, nepotism, tender entrepreneurship, and inappropriate use of public resources for private purposes.
Figure 2: Pharma Market Access under a South African National Health Insurance system

We analyze the impact on pharma market access of changing health policies. 

Solidarity and redistribution of healthcare resources under a South African national health insurance system is an important objective. However, so is a patient’s access to innovations and reducing morbidity and mortality. 

The future of government funding new healthcare technologies is uncertain. Patients covered by the national health insurance system are unlikely to benefit from new medicines and medical devices available in the private and international market. 

We analyze the impact on pharma market access of national health insurance systems, among other changing health policies.

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