Generics are 50% cheaper than branded medicines

South Africans are increasingly opting generics over branded medication because they are cheaper and the results of treatment are often the same. It found that generics are used in 91% of all treatment for HIV/AIDS and 86% of oncology treatment.

In their most recent Medicines Review, Mediscor, a pharmaceutical benefit manager, states that the utilization of generics has risen to 56.3%, demonstrating a steady increase over a five year period.

In addition, on a basket of 200 of the most prescribed medicines within the private health sector, and across two million lives, a Mediscor study indicates that the difference in price between an original medicine and the average generic medicine is 45.2% while a comparison between the originator drug and the least expensive generic is a whopping 55.9%.

Generics are created once patents on their branded equivalents expire. They are effectively copies of brand-name drugs, containing the same active ingredient but costing much less.

That’s not to say that there are any cutbacks in quality. “Generics are subject to the same rigorous registration process as branded medicines but are substantially less costly”, commented Vivian Frittelli, CEO of NAPM, the organisation which represents generic manufacturers in South Africa.

The rising prevalence of South Africans suffering from chronic diseases means a growth in the use of medicines. Despite this, medicine costs in the private sector have increased by just 7.09% since 2014 compared to specialist costs which increased by 10.9% and hospitals which increased by 9.36%.  This is a result of the combination of the Single Exit Price (SEP) - which regulates the cost of medicines - and the increasing use of generics.

According to IMS Health, a global organisation which tracks data at sales level, generic medicines currently make up 38% of the prescribed medicines market by value and 65% by volume, while patented medicines make up just 38% of the volume but close to 60% of the market value.  This is demonstrative of the saving efficiencies realised through the use of generics.

However, there is still some way to go before generics are used more widely. The lowest usage was observed in over the counter (OTC) medication and medicines dispensed for prescribed minimum benefits (PMB).

South Africans also still trail behind their counterparts in the USA where generic utilisation is 83%.  The IMS data shows that South Africans could be enjoying substantially greater savings if more generics were used.  According to IMS, every 1% increase in the use generics would result in a saving of R176 million, substantially decreasing healthcare costs.

“The fact that a greater number of consumers are choosing generics over more costly branded equivalents bodes well for both health insurers and government who has publically supported the use of generics as a step towards affordable and accessible healthcare for South Africans”, concluded Frittelli.