Full funding for arthritis biologics now possible
Full funding of biologic drugs for medical scheme members with severe rheumatoid arthritis (RA) is now a reality.
In a surprising about turn, Discovery recently retracted their second appeal against two earlier rulings by the Council for Medical Schemes, which ordered them to fund their member, Sylvia Erasmus, in full for the use of the anti-rheumatic biologic, Enbrel, after previous treatment with a fully funded biologic had failed.
Described by rheumatologists as ‘miracle drugs’, anti-rheumatic biologics have been shown to halt the inflammatory process and to prevent further disease activity and joint damage in RA patients who have not responded to standard drugs and who are literally crippled by the condition. The downside is price, with the cost for anti-rheumatic biologics being in the region of R100 000 per annum.
“The reinstatement of the first appeal ruling in the Erasmus case is significant for RA sufferers because it interprets the current treatment algorithm for RA to include biologics as a Disease Modifying Anti-Rheumatic Drug (DMARD) of last resort,” says attorney Lisa Metzer who represented Erasmus on behalf of The SA Rheumatism & Arthritis Association (SARAA).
“This makes it illegal,” Metzer stresses, “for a medical scheme to levy a co-payment on an anti-rheumatic biologic if it is used by an RA patient after all other standard DMARDs, or fully funded biologics, have failed.” 
A further push for full funding of anti TNF agents as PMB drugs of last resort has been given by their inclusion in the third draft of the algorithm for Rheumatoid Arthritis just published in the PMB consultation document on the Council for Medical Schemes website.
This year, Discovery is funding the biologics Revellex, Humira and MabThera in full. They will, however, continue to levy a 10% co-payment on members using Wyeth’s more expensive biologic Enbrel. The reason according to Discovery’s legal advisor, Elton Krawitz, is that “It is not cost-effective at its current price.”
“Unfortunately, there are still many barriers preventing medical scheme members in a critical condition from accessing biologics,” says Mike Boddy, CEO of The Arthritis Foundation. “Generally, they have to be on a comprehensive plan in order to apply for a biologic. Some medical schemes continue to levy co-payments on all biologics making them unaffordable. Many medical schemes also put an annual price limit on biologics. “
“Only 1 500 SA patients require anti-rheumatic biologics in the private sector, “says Dr Beverley Traub, chairman of SARAA. “Of these, approximately 800 have RA. The others have Juvenile Idiopathic Arthritis, Ankylosing Spondylitis or Psoriatic Arthritis.
“Anti-rheumatic biologics can only be prescribed for patients who meet the criteria specified by SARAA. These patients are recorded on an official registry controlled by SARAA, with their numbers therefore being strictly controlled,” stresses Dr Traub.
“Getting medical schemes to fund anti-rheumatic biologics for treatment resistant patients has been a long, tough battle since 2005,” says Arthritis Foundation CEO, Mike Boddy. “However, there are now approximately 95 medical schemes funding biologics as drugs of last resort for members with RA, many without co-payments.
“The central issue with biologics has always been price and the pharmaceutical companies have cooperated since 2006 by dropping or restricting their prices on biologics.”
Putting the price of biologic drugs into context, health economist, Professor Tienie Stander says that in 2006 only R8.7 billion, or 16.9% of total medical scheme contributions in South Africa were paid for medication. This equated to R104 per beneficiary per month, with merely R1.50 per beneficiary per month being for anti-cancer biologics, and 64 cents per beneficiary for anti-rheumatic biologics.
Notes to the editor
 Sylvia Erasmus’s Case Study
Now 52, Sylvia Erasmus developed RA at age 27 in multiple joints. She became bed ridden and crippled with many deformities, and subsequently had both knees and an elbow replaced twice in a series of seven operations. She also needed a full time caregiver to bathe, feed and dress her.
Sylvia unfortunately had an allergic reaction to the biologic Revellex (which is fully funded by Discovery), but responded well to Enbrel. She went into remission and was able to walk again and manage all her daily functions and activities unaided.
After Discovery implemented the co-payment for Enbrel, she had to stop biologic treatment as she was unable to work and relied solely on her husband’s income. She relapsed and after two months was in such agony that she had to be admitted for emergency physical and psychiatric treatment.
Her rheumatologist intervened and lodged two appeals with the CMS who ruled in Erasmus’s favour both times. Discovery lodged a second appeal against the first appeal ruling, but withdrew this appeal in February, 2009.
2 The Medical Schemes Act
According to Regulation 15I of the Medical Schemes Act, a medical scheme is obliged to provide an appropriate substitution drug to a patient, without any financial penalty to that beneficiary, when formulary drugs have been ineffective.
Should a patient’s treatment fail on formulary drugs that are fully funded and the beneficiary supplies the necessary evidence to support such a claim, the scheme is obliged to fund an alternative and proven drug in full. Most medical schemes require that members follow their appeals process in these instances.
Anti-rheumatic biologics – a definition
Described by rheumatologists as ‘miracle’ drugs, biologics target individual molecules called cytokines which are involved in the complicated process of inflammation, thereby either halting, or turning off the underlying disease process.
International data on RA patients taking biologics within three to six months of the onset of RA show that 50% went into remission after using biologics for 12 months compared with only 28% of patients on standard drugs.
The impact of co-payments
A co-payment for biologics is unaffordable for most medical members, particularly when they have to pay a few thousand Rands per month for a comprehensive plan in order to be eligible for this benefit.
In May 2007, 17 rheumatologists attending a rheumatology meeting did a dipstick survey on the extent to which co-payments were affecting their patients. (There were 43 practising rheumatologists in SA at the time.)
* Collectively, the 17 rheumatologists present reported that they had 108 patients who had been adversely affected by co-payments, but who were still managing with difficulty to fund their treatment.
* 48 patients had stopped taking biologics because of the co-payment to the detriment of their health.
* The number of patients in a critical condition requiring biologics, but not able to start treatment due to a co-payment, was 73.
CMS rulings on the usage of anti-rheumatic biologics
Four grievances concerning the funding of biologics have been lodged thus far with the CMS against Pro Sano, Resolution Health, Medshield and Discovery. All rulings were made in favour of the members.
In the first three cases, patients had been denied access to biologics by their medical schemes. Referring to Regulation 15(H) of the Medical Schemes Act, the CMS ruled in all three instances that the member was entitled to have access to an alternative and proven drug after all other drugs listed on the treatment algorithm for RA or medical scheme formulary had failed.
The fourth case against Discovery was the first to deal with the issue of co-payments.
Pricing of biologics
Pharmaceutical companies stress that it is difficult to reduce the price of biologics due to the complex manufacturing process required for these genetically engineered drugs. The prices of biologics used for RA on the SA market have nevertheless decreased, or been contained, since 2006.
The price of Revellex was reduced by 17.5% in November, 2006. In addition, a waste management programme was implemented, resulting in additional savings of between 7 and 23% being offered to medical schemes. No price increases have taken place since the introduction of SEP.
According to Schering Plough, the median weight of a South African patient is 75kg. Three vials would be required per treatment costing R14 760. Eight infusions are required in the first year, costing R118 091. This drops to 6.5 infusions in successive years costing R94 940 per year.
Patients have to be hospitalised for three hours for each infusion and this costs between R300 – R500 per visit.
The price of Revellex varies, however, depending on the weight of the patient and whether vial sharing can be used. In the above example, vial sharing would bring the cost of the induction year down to R98 409.
The price of Humira has been R8 511 (incl. VAT) per month since August, 2006. As the drug is administered every second week by injection, the annual cost is R110 643 (incl. VAT).
The price of Enbrel was reduced by 11% in early 2008. However, the price was increased again this year by 13.2% in line with the statutory price increase permitted for drugs in 2009. The average adult would require treatment costing R9 678.94 per month (incl. VAT). Thirteen treatments are needed per annum, adding up to R125 826 (incl. VAT).
Attorney, Lisa Metzer, can be contacted on Cell: 083 692 4791. Email: firstname.lastname@example.org
Patient, Sylvia Erasmus, can be contacted on: Tel: (011) 447 0846
Advocacy director of The Arthritis Foundation, Aletta van der Watt, can be contacted on Tel: (021) 852 5530, or Cell: 083 270 4842, Email: email@example.com
Mike Boddy, CEO of The Arthritis Foundation of SA. Tel: (021) 425 2344. Cell: 073 205 1349. Email: firstname.lastname@example.org
Dr Beverley Traub now resides in Germany and can be contacted on. Email: email@example.com
Professor Tienie Stander can be contacted on Tel: (011) 655 7191.
News release compiled by Linda Trump of Cat Communications for The Arthritis Foundation of
SA and SARAA. Tel: (011) 485 2406. Cell: 082 341 7128. Email: firstname.lastname@example.org.