The maximum medical aid price programme. A review of the concept and of its ability to reduce expenditure on medicines

Abstract

Medicine prices in South Africa have increased significantly in recent years. Furthermore, a consideration of expenditure on medicines by medical schemes shows that this component of health care costs had grown to 26.1% in 1988, which is high by comparison with other Western economies. The use of generic medicines offers one possible solution to rising expenditure. For savings to be optimised, however, generics need to be used on a planned and structured basis. The maximum medical aid price (MMAP) system of the Pharmaceutical Society of South Africa provides such a programme. MMAP is a programme through which certain medical schemes elect to pay only a specified maximum price for off-patent products that have generic equivalents. Although MMAP does not require substitution by generic medicines, it does have the effect of encouraging their use. Two case studies measuring the savings that can be achieved through adoption of MMAP by medical schemes are reviewed. Although they differ in their respective methodologies, their results are consistent and show that savings of about 9.3% were possible in 1989. Medical schemes with higher proportions of older members tend to show greater savings. The studies also show that the potential for achieving savings through the use of MMAP increases with the passage of time.