Chemists in a fix as insurers only pay for generic drugs

Sunday March 31 2019

pharmacy

Since November last year the drug prices have risen by 6.3 per cent, going as high as 10 per cent for some drugs, which is wrecking havoc in the Rwandan market. PHOTO | Cyril NDEGEYA  

By MOSES K. GAHIGI
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The move by insurance companies to only pay for generic drugs is affecting pharmacists in the country, with some facing losses from stocks of brand-name drugs.

Generic drugs have the same chemical composition as brand-name medicines but are cheaper.

Insurance companies in Rwanda used to only pay for brand-name drugs, but switched to cheaper generic medicine a few years ago, most of which are manufactured in Kenya and India.

“The shift to generic drugs by insurance companies has reduced our profit margins because some of the brandname drugs are expiring on the shelves,” said Serge Abayo, a co-proprietor and pharmacist at Sabans Pharmacy.

“Some customers complain about generic drugs even though there is no empirical evidence against these medicines,” he added.

“When insurance companies turn to cheaper generic drugs, it discourages importation of some brand-name medicines, which are still needed in the market. There are some brand-name drugs not available in generic form,” a pharmacist who preferred anonymity.

Brand-name drugs are usually patented and protected for the first 20 years in the market, after which other companies can replicate their chemical composition to create a cheaper version.

Vermox, a brand-name drug from Europe is sold for Rwf2,900, while its generic version manufactured in Kenya is sold for Rwf500. Coatem a brand-name drug from France made by Novartis costs Rwf3,600, while its generic version from India is sold for Rwf3,000.

Daprofen-Ibuprofen from Europe is sold for Rwf5,100, while its Kenyan replica costs Rwf600.

Blaise Uhagaze, the president of Rwanda Health Insurance Association, said insurance companies are following the government policy of prioritising affordability of medicing by opting for generic drugs.

“In order to achieve universal health coverage, affordability is key and we are following the government policy. However, companies that import drugs into the country do so expecting them to be sold,” said Mr Uhagaze.

Regarding concerns about the effectiveness of some generic drugs, which affects their sale, Mr Uhagaze said they will only take action if the food and drug regulatory authority conducts a survey and declares that they are not effective.

He added that every year, insurance firms add to the number of brand-name drugs they pay for.

The prices of medicine have been increasing over the past few years, affecting out-of pocket buyers, insurance companies, as well as big drug buyers like the Rwanda Social Security Board.

RSSB which runs its insurance plan (RAMA) alongside the community-based health insurance scheme — Mutuelle de Santé — had projected to spend Rwf95 billion for the fiscal year ending June 30, and about Rwf47 billion in the six-month period, however half-year expenses have already amounted to Rwf54.2 billion.

This is partly due to a rise in drug prices. Pharmacies also faulted insurance companies for taking a long time to pay them, which affects their operations. Some insurance companies take as long as a year to pay pharmacies.

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