The DA’s alternative health plan for South Africa: Yes or No?

By Di Caelers

There’s no arguing that South Africans, especially the poorest of the poor, have a Constitutional right to access healthcare services. Whether it should be free for everyone at the point of care, as is proposed by the government’s National Health Insurance project, is however up for debate in a country grappling with a health system badly in need of some treatment of its own.

The Democratic Alliance says it has the answer, offering in its Our Health Plan for Universal Health Coverage an alternative to the National Health Insurance (NHI), which it says it can deliver in just five to eight years.

In the case of the NHI, the national health department published its latest policy proposals in the Government Gazette on December 10 2015, and the comments and representations on the White Paper continue to roll in. But estimates are that it could take as long as 15 years to implement.

The DA argues for its plan with a stance with which it’s difficult to disagree; that for too many years South Africans’ circumstances of birth have determined access to life-saving healthcare. Everyone will also likely agree the status quo entrenches inequality and skews access to quality healthcare.

But the truth is that rhetoric won’t take the country any closer to actually achieving desperately needed equity in the healthcare arena.

The DA’s plan is well-researched and rich in detail; the common complaint across the board has been that the opposite is true of the NHI, even at this later stage in its road to implementation.

DA health spokesman Dr Wilmot James says his party’s plan is affordable for South Africa, and can be implemented within the existing health budget. There would be no new taxes; to free up resources, he said, they proposed realising an additional R6billion to boost the health budget by bringing the current medical aid tax credit of R17bn on budget. The remainder (R9.43bn) would go towards helping reduce medical aid costs, by subsidising, and so reducing, members’ monthly contributions.

“This would mean that medical contributions would no longer be tax deductible,” James explained.

Predictions for the NHI, on the other hand, are for costs as high as R256bn by 2025, according the White Paper estimates. News reports in July this year also had several commentators warning these estimates were done with an optimistic assumption of 3.5 percent annual economic growth. In addition, while a number of funding options for NHI have been proposed, these lack detail, and many questions about where the money will come from remain unanswered.

James added: “By bringing the medical aid tax credit on budget, and allocating some of it to build better services in the public health sector, those with medical aid are cross-subsidising those without.” He called it an “act of health justice”.

Sounds fine. But going on to hold up the Western Cape as an example of how it’s all going to work out should probably raise some red flags.

It’s true that healthcare in the Western Cape is amongst the best in the country. It’s true that that province boasts a maternal mortality rate which, at 84 deaths per 100 000 live births, is almost half the comparative rate for the country.

But that certainly doesn’t mean everyone in the Western Cape is enjoying equitable healthcare across the board, or that facilities can necessarily withstand scrutiny.

Just last month Business Day revealed data from the Office of Health Standards Compliance, obtained via a Promotion of Access to Information Act (PAIA) application, which pointed to serious problems at public hospitals and clinics, including in the Western Cape.

That paper said just two of the 149 clinics evaluated in the Western Cape, “generally considered to have a well-run health administration”, scored more than 70 percent in the most recent inspection.

Also last month, unions and health professionals in that province warned that a jobs freeze in the health sector meant a crisis was inevitable.

Junior Doctors Association of South Africa chairman Dr Zahid Badroodien said in the Cape Argus: “We foresee a worrying trend developing in which our health system will be void of senior expertise needed to train and mentor doctors in developing their skills in order to best serve patients.”

The DA plan focuses heavily on training, including an extra R1-billion in conditional grants to the Health Education and Training Platform, but staff retention is obviously of paramount importance to ensure there will always be teachers to teach the newcomers.

Admittedly, however, the Western Cape’s health service emerged head and shoulders above other provinces in almost all indicators in the Health Systems Trust’s South African Health Review 2016. So there is clearly plenty that is also being done right.

So what does the DA’s health plan foresee?

James said it essentially ensured a comprehensive package of quality services within the public health system. It would be free at the point of access to everyone, while retaining and reforming the medical aid system.

For those without medical aid, the promise is improved service at clinics and hospitals, better maternal and childcare provision, and free, efficient access at the point of service to emergency services in urban and rural areas.

But that could well be easier said than done, many might argue. Even the DA concedes in its plan that efficient delivery of services in the public sector is compromised, and has been for the past 20 years, and that the primary healthcare system is “simply inadequate”.

Those with medical aid are promised reduced medical aid costs, and access to more efficient ambulance services, free at the point of service.

On the financial front, the plan would provide :

  • An added R1-billion a year to train medical, nursing and health professional staff.
  • An added R2-billion a year for expanded maternal and child health programmes, for which qualifying clinics and hospitals would compete.
  • An added R1-billion for a single number national public-private emergency service governed by an independent board.

James added that medical scheme reform, in terms of the DA plan, would see schemes compete on the cost and quality of health services they cover, rather than on the risk groups they target.

There would no longer be a situation where schemes were disadvantaged by, for example, an over-supply of older, sicker members. So a scheme with only young members would consequently transfer funds to such a disadvantaged scheme, so ensuring each scheme could price its benefits according to the same demographic profile.

Medical aids are big business in South Africa, and whatever plans the DA has for them, they’re unlikely to fall into line without any fuss – especially if they deem the plan doesn’t benefit them.

Although it’ll almost certainly be more palatable that the NHI system, which will, as it stands, allow them to provide only complementary or top-up cover once the project is fully implemented.

Schemes collect R140-billion a year in contributions, even though fewer than 20 percent of South Africans actually have medical cover.

A final obvious red flag is that the proposed system makes no provision for healthcare for the hundreds of thousands of refugees and asylum seekers whose permanent status in South Africa is pending.

The report offers a universal subsidy only to “every South African citizen and legal resident”, irrespective of whether or not they’re covered by the public or private health system.

It’s a concern that’s been argued by human rights activists and advocates for years, but excluding this group from any future health plan for the country is very short-sighted.

What we do know if that free universal healthcare is possible, even in so-called third world countries.

The Cuban health system is recognised worldwide for its excellence and efficiency. Even in the face of extremely limited resources and economic sanctions by the United States, it has guaranteed access for all, and obtained similar health results to those of the most developed nations.

Closer to home, Botswana’s successful health system is dominated by the public health sector, which operates 98 percent of health facilities.

That country’s delivery system is based on the primary health care model, which the DA health plan and the NHI also favour.

Whether the DA will get the chance to implement its plan nationally obviously depends on the voters. But whether South Africans support the NHI ideal, or the alternative offering from the opposition, what’s clear is that the health system as it stands isn’t working as it should, and that an overhaul is absolutely essential.

 

Di Caelers is an experience health journalist and was commissioned by Spotlight to write this article. If you would like to offer a response, please write to thom@section27.org.za

 

A new dawn for medicines regulation in South Africa

The Medicines Control Council (MCC) regulates medicines in South Africa. Without the council’s permission, medicines may not be marketed and clinical trials may not be conducted. The MCC plays a critical role in protecting both the broader public and study-participants against the dangers of unproven medicines.

The MCC will soon be replaced by the South African Health Products Authority (SAHPRA). Spotlight asked MCC registrar Dr Joey Gouws and MCC chairperson Professor Helen Rees about changes at South Africa’s medicines regulator.

Spotlight: What still needs to happen before the MCC becomes SAHPRA? And, when is this change expected to happen – is the April 1 2017 date that has been quoted in the media realistic?

Gouws: On 24 December 2015, the State President, signed The Medicines and Related Substances Amendment Act, 2015 (Act 14 of 2015) into law. However, the said Act has not yet been proclaimed by the President as a number of administrative transitional arrangements require implementation prior to the date MCC would cease to exist and SAHPRA be established. The MCC is working towards the 1 April 2017 date for SAHPRA to be established.

Spotlight: By how much have staff levels at the MCC increased in recent years and how much will they increase further once the SAHPRA is fully in place?

Gouws: The staff component at the MCC has been increased by 52 staff over the last 24 months with the view to employ another 30 staff members once SAHPRA is fully in place.

Spotlight: What is being done to ensure new molecular entities (NMEs) are more quickly registered in South Africa? Can you share any evidence that registration times are being reduced? Is the MCC working toward a target time for registering NMEs?

Gouws: Registration timelines for a medicine depends on the submission by the pharmaceutical industry of a quality dossier, with the Regulator having available sufficient resources, with appropriate expertise, to conduct a review of the dossier. Over the last 24 months, additional staff have been appointed at the Regulator and staff have been exposed to various training sessions on regulatory matters. In addition, workshops have been conducted with the industry to explain the requirements for a quality dossier. Registration timelines are still being worked on.

Yes, the MCC is working towards a target time for registration of new molecular entities of 36 months.

Spotlight: Can you share more detail on what is being done to ensure generic medicines are more quickly registered in South Africa? Again, if you can share evidence of reduced registration times it would be appreciated. An idea of a target registration time for generic medicines would also be useful.

Gouws: See the response as per point three, with registration timelines for a generic application of 24 months.

Spotlight: At the moment it is relatively difficult to find information regarding the registration status of medicines in South Africa (certainly compared to the FDA). Are there any plans to make registration information, including assessments of the evidence and reasons for decisions, more readily accessible to the South African public?

Gouws: Medicine is registered by the MCC at each of their six weekly meetings. Following the MCC meeting, the medicines registered are published in the Government Gazette and on the MCC website, www.mccza.com With the view of the MCC transferring to SAHPRA, systems are under investigation to allow for greater transparency in the decision making process of the Regulator. However, the MCC must take into consideration the provisions of Section 34 of the Medicines Act, dealing with confidentiality.

Spotlight: The MCC responded very quickly in relation to ReGenesis in the Free State and other specific cases in recent years. However, quackery and the unlawful marketing of health products remains widespread in South Africa. What is being done to ensure that the MCC has sufficient capacity to clamp down on unlawful marketing of health products, including complementary and alternative medicines and supplements?

Gouws: Complementary medicines have been called up in 2014, with certain pharmacological categories of medicines making therapeutic claims to treat a disease asked/instructed to submit applications to the MCC for registration over a period until 2019, based on disease risk.

In addition, the  maximum levels of certain vitamins and minerals allowed in complementary medicines without requiring the product to be submitted to Council as a high-risk product, have been published. These products require the submission of a so-called orthodox application, which requires safety, clinical, efficacy and quality data before they can be sold.

Finally, legislation requiring the label of the product to include a disclaimer that the MCC has not evaluated the medicine for safety, quality and efficacy, has been implemented since 2014. By the implementation of these measures, the public can make an informed decision on the use of these medicines.

In July 2016, proposed legislation has been published to address the definition of health supplements, which will allow MCC to have regulatory oversight over this category of medicines, once enacted.

The marketing and sale of unregistered medicine is an illegal activity, which is a matter for the police and the courts and not that of the MCC. The Council’s mandate is the evaluation of a dossier submitted, and the registration of the said medicine, if the information evaluated supports safety, quality and efficacy of the medicine under review.

Spotlight: Some commentators and advocates are alarmed by what they see as a lowering of regulatory standards through initiatives like the 21st Century Cures Act in the United States and the Adaptive Pathways pilots in the EU. Can you reassure the South African public that regulatory standards will remain robust in South Africa?

Gouws: Measures such as the 21st Century Cures Act and Adaptive licensing are means to allow, in a limited way, access to specific medicines in a controlled matter, without lowering standards but to increase pharmacovigilance monitoring within the space of ethics versus science.

The regulatory standards in South Africa have been robust, thorough and in line with international best practices. In addition, regulatory standards and requirements are published on the MCC website for scrutiny and comment by all stakeholders prior to implementation.

Spotlight: To what extent and in what ways is the MCC sharing information and cooperating with other regulatory agencies such as the FDA and EMA?

Gouws: The MCC is a member of various international medicines initiatives that include the FDA and EMA. This includes but is not limited to:

  • PIC/S – Pharmaceutical Inspection Co-operation Scheme: allows the exchange of medicine manufacturing site inspection reports amongst/between regulators to allow/facilitate work-sharing and to harmonise technical guidelines on inspections.
  • ICMRA – International Coalition of Medicines Regulatory Authorities: supports training activities, regulatory cooperation, sharing of regulatory information and concerted strategic leadership.
  • IGDRP – International Generic Drug Regulator’s Programme: supports work-sharing on active substances, mutual reliance in assessment of active ingredients and application of biowaivers.
  • WHO – World Health Organisation: supports medical devices and medicines with respect to quality assurance, safety, medicine access and rational use.
  • EDQM – European Directorate for the Quality of Medicines and HealthCare: supports certification of suitability of active ingredients to the monographs of the European Pharmacopoiea (MCC observer status).

In addition, the MCC has signed a Memorandum of Understanding with the FDA and SwissMedic (Switzerland) to allow exchange of information.

We are keen to increase the transparency of the work of the MCC including giving more feedback to applicants about decisions made, more opportunities for pre-application discussions with applicants for issues that are unusual and/or of critical public health interest, and more transparency to the broader community about the workings and decisions of Council.’ – Professor Helen Rees, MCC chairperson.

Ten patents on two TB drugs

An online tool launched last week sheds light on what patents have been granted for which medicines in a number of developing countries. While the tool is still a work in progress, it is a massive step forward for the transparency of patent status information in South Africa relating to medicines for HIV, tuberculosis (TB) and hepatitis.

The tool called MedsPaL was developed by the Geneva-based Medicines Patent Pool. It can be accessed at www.medspal.org

TB kills 1.8 million people per year and is currently the infectious disease that kills most people on the planet. After 50 years of stagnation, two new TB drugs – bedaquiline and delamanid – have recently been developed. While trials to determine their optimal use are still ongoing, they seem set to revolutionise the way TB is treated, especially drug-resistant forms of TB (DR-TB).

Bedaquiline patents in SA

A search on MedsPaL shows that South Africa has granted five different patents on bedaquiline. The base patent was granted in 2005 and will expire in 2025.

Two so-called ‘new use’ patents were granted in 2006 (for treatment of DR-TB) and 2007 (for treatment of latent TB). South Africa currently grants patents for mere new uses of existing medicines, even though this is not a requirement under international law and these two patents would not have been granted in a number of other countries.

A process patent (2007) and a new formulation patent (2009) were also granted – the latter expiring in 2029, four years after the base patent. New formulation patents are mere reformulations of existing drugs and contains no new active pharmaceutical ingredient. Argentina, for example, does not grant such new formulation patents. India only grants them when they provide a therapeutic benefit.

Delamanid patents in SA

MedsPaL also finds five patents on delamanid in South Africa. We see a similar pattern as with bedaquiline. A base patent was granted in 2005. The base patent was followed by a new use patent (for the treatment of TB) in 2006. There then follows what appears to be two new formulation patents – delamanid in combination with other TB drugs (2008) and delamanid compositions (2007).

As with bedaquiline, South Africa is under no obligation in international law to grant these new use and new formulation patents. Should we wish, we could change our laws to prohibit such secondary patents.

The fifth patent, granted for ‘delamanid intermediate compounds’, only expires in 2032 – more than seven years after the base patent.

Secondary patents like these eight patents on bedaquiline and delamanid often delay generic competition. Due to this lack of competition the prices of medicines in South Africa are often higher than prices for the same medicines in countries with laws that restrict secondary patenting.

Won the battle, lost the war

By Marcus Low & Lotti Rutter

In the early days of the AIDS epidemic, the high price of antiretroviral medicines meant many lives were unnecessarily lost. While the global AIDS movement managed to force lower prices for key ARVs, the wider battle has not yet been won. Today, many people with hepatitis C, various cancers, drug-resistant tuberculosis and other conditions still cannot get the medicines they need to survive. This article explains the how inequality extends to drug development.

There are two broad problems with the way society currently pays for medicines.

The first, the innovation problem, is that we are not investing enough money and energy into finding treatments for diseases mostly affecting poor people. This is why most of our tuberculosis (TB) treatments today are more than fifty years old and not very good.

The second, the price problem, is that many of the medicines that are developed are sold at such high prices that people cannot afford them. This is why many people with hepatitis C cannot afford the highly effective new hepatitis C cures on the market. For these people the new cures might as well not exist.

The innovation problem

Last year, tuberculosis killed more people than any other infectious disease on the planet, including HIV. At 1.5 million deaths, it far outstripped headline-making outbreaks like Ebola (11,315 deaths in 21 months). Yet, in 2014 humanity invested less than US$700 million in TB research – only about a third of the two billion a year that the World Health Organisation estimates is required to bring an end to TB. Of this US$700 million, less than US$100 million was invested by the pharmaceutical industry. In fact, a number of large pharmaceutical companies have stopped doing TB research altogether.

The first part of this problem is simple. Since most people needing TB treatment are poor, pharmaceutical companies see little potential profit in developing new TB treatments. Companies choose rather to invest in researching medicines that will sell in rich countries – medicines for diabetes, heart disease, or erectile dysfunction.

The second part of the problem is more puzzling: given that industry does not invest, one would expect governments to step in to fill the gap. However, with the exception of the United States, governments do not. While the BRICS countries (Brazil, Russia, India, China and South Africa) have over 40% of the global TB burden, they contribute less than 4% of global investment in TB research.

The price problem

When the patent system does deliver important new medicines, as it sometimes does, those medicines are often priced out of reach for many of the people who need it. So, for example, the breakthrough hepatitis C drug sofosbuvir is priced at US$84 000 for an 84-day course. Similarly, high prices mean that women in South Africa who need the breast cancer drug trastuzumab often can’t afford its R500 000 price tag.

Companies argue that they have to ask these high prices to recoup their investment in developing the drugs and to fund their investment in developing new medicines. In recent years this argument has begun to wear very thin.

Companies argue that they have to ask these high prices to recoup their investment in developing the drugs and to fund their investment in developing new medicines
Companies argue that they have to ask these high prices to recoup their investment in developing the drugs and to fund their investment in developing new medicines

A United States senate investigation in 2014 found that the pricing of sofosbuvir had nothing to do with how much it costs to develop the drug. Rather than basing prices on the investments made into a drug, companies are typically setting prices at levels that maximise profits – even if that means many people can’t access the drug in question.

At a more fundamental level, high prices charged by pharmaceutical companies have brought into question the basic social contract between the public and the pharmaceutical industry.

The thinking is that the people, through our governments, grant patent monopolies to companies in return for investment in new medicines. However, enforcement of this social contract is very one-sided. While companies almost always get and maintain their patent monopolies, there is no enforcement of the expectation on companies to invest in research. Typically, companies invest only between 8 and 18% of revenue in research and development (R&D), while they typically spend double on marketing and advertising. In addition, the way in which companies spend their R&D funds is completely non-transparent.

All the available evidence suggests that we are not getting much bang for our buck in the current system where there is no obligation on industry to reciprocate high prices with high investment in R&D.

We have other options

Various solutions to these problems have been under discussion at the World Health Organisation (WHO) over the last decade – with very little progress to show for it. In addition, in 2015 the Secretary General of the United Nations, Ban Ki-moon, convened a High Level Panel to look at exactly these problems. Even if the HLP comes up with strong recommendations, it will be up to governments to make those recommendations a reality.

Some possible solutions include:

An R&D agreement or treaty

Given that industry is failing to invest in diseases that have an impact on poor people, governments have a responsibility to step in and fill that investment gap. One solution is an R&D treaty or agreement. Countries would all contribute to a central fund. Money in this fund would then be used to fund research in neglected areas like TB. This is a simple and workable solution. The only thing that is lacking is political will. Even if rich countries like the United States and Germany oppose such a treaty or agreement, there is nothing preventing other countries from going ahead without them.

Delinkage

When governments invest in research, they often do so in a way that allows companies to patent the products of that research. In this way, governments end up paying twice – once through research grants and again when paying high prices for patented medicines. If governments invest in a delinked way, they will not allow this double-payment to happen. In such a case, governments will fund research through grants and prizes and then ensure that all the research is paid for up front and that the research cost is “delinked” from the sale price of the eventual product. The so-called 3P Project (see our previous issue) is an example of a delinked model.

Bring balance to the system

International law allows for steps to be taken to balance the worst excesses or exploitation of patent monopolies. These balancing measures are commonly referred to as TRIPS flexibilities (Trade-Related Aspects of Intellectual Property Rights) and they include allowances for: compulsory licenses (overriding patents); only granting patents for truly innovative products and not for reformulations or new uses of old drugs; and for the public to file oppositions to the granting of specific patents.

The problem is that due to trade pressure from the United States Trade Representative, many countries have not written these TRIPS flexibilities into their national law – and if they have, they are often afraid to use them.

Doing away with pharmaceutical patents altogether

One of the remarkable things about the history of patents and medicines is that there is no evidence that providing increased patent protection around the world has led to greater medical advances. In fact, in the golden age of medical discovery from the 1940s to 1970s, much of the world did not offer any patent protection on medicines. There was also no increase in innovation following the TRIPS agreement in 1995, which compelled all World Trade Organisation member countries to provide for at least 20 years of patent protection.

It would of course not make sense to simply remove the patent system and not replace it with anything else. The world, after all, is in desperate need of new medicines. Governments would have to redirect the money they would have spent on purchasing patented medicines to providing research grants and sponsoring prize funds for the development of new medicines. All indications are that such a transition would in fact see R&D spending increase dramatically – given how little industry currently spends on R&D as a percentage of revenue.

Lotti Rutter is a Senior Researcher for Treatment Action Campaign

Marcus Low is an editor of Spotlight

 

QUOTES:

You are aware of the exploding prevalence of cancer around the world and in our own country. We have just moved in a circle. Just as the price of ARVs were unaffordable then, cancer drugs are devilishly unaffordable today. If no drastic action is taken today, we are going to be counting body bags like we are at war.”

Dr Aaron Motsoaledi, Health Minister of South Africa, 2016 budget vote speech.
“Rationing is the ultimate consequence of high drug prices. Unsurprisingly, this is unpopular and is causing a backlash. In a number of US states, politicians are seeking to pass legislation forcing drug companies to disclose more information about the cost of producing their high-priced remedies. There is even talk of capping prices. The industry argues that such caps would drive capital out of the industry, cutting innovation and ultimately harming patients. But that is a hard argument to sustain when companies such as Gilead and Vertex are earning gross margins of 90 per cent and share prices are sky high. Pharmaceutical innovation has been one of the great successes of the past century, improving the lives of people immeasurably round the globe. But if the current dispensation is to continue, the industry must learn to price with greater restraint.”

Financial Times, August 16, 2016.

 

The patent system is expensive. A decade-old study reckons that in 2005, without the temporary monopoly patents bestow, America might have saved three-quarters of its $210-billion bill for prescription drugs. The expense would be worth it if patents brought innovation and prosperity. They don’t.”

The Economist, August 8, 2015.