National Department of Health

Under South Africa’s decentralized system, the National Department of Health (NDoH) and nine Provincial Departments of Health share responsibility for health services. The NDoH is responsible for overall normative guidance, and provinces take specific budget and implementation decisions given their substantial financial autonomy.

Program streams within the NDoH are responsible for governance and policy development in their respective areas (e.g., the NHI program; tertiary services allocations). National programs may issue disease-specific guidelines; however, the NDoH has little control over provincial implementation except in instances where programs are funded by conditional grants from the national budget (e.g., Antiretroviral Treatment Program). Conditional grants represent additional funding to provincial health departments for a specific package of services.

National level regulation and coordination of public sector procurement and maintenance strategies for medical devices and equipment has evolved over time but is still characterized by inequities and inefficiencies.

National Treasury

The National Treasury of South Africa has repeatedly called for improved HTA capacity in the health sector, as it frequently receives large budget bids from the NDoH for additional funding for new technologies or programs, without robust assessment of effectiveness, affordability, and cost-effectiveness.

Due to these deficiencies, the Treasury has undertaken substantial modeling in areas such as childhood vaccination and HIV/AIDS, relying on internal capacity with external expert inputs where required, and using various analytical approaches adapted to the particular intervention or program. Initial work has also been done on benefit design for NHI.

National Health Laboratory Service

The National Health Laboratory Service (NHLS) provides diagnostic pathology services across all public sector healthcare facilities. NHLS investment decisions can have substantial impact on public sector spending. This influences the availability of diagnostic, prognostic, and predictive tests and therefore the clinical care delivered. The NHLS has been engaging with the EDP with the updating of the PHC ELL.

The NHLS HTA process is in nascent stages and could potentially be strengthened and coordinated with other decision-making bodies in the health system (Reference Moodliar and Basu13).

Provincial Departments of Health

Provincial Departments of Health have multiple structures responsible for procurement and management of health technologies, including Central Medical Depots, Pharmacy Services, Supply Chain Management, and Health Technology Directorates.

NDoH Pricing Committee

The NDoH Pricing Committee (PC) is an independent statutory committee that makes recommendations to the Minister of Health regarding the pricing of medicines in South Africa’s private sector. As part of a legislated transparent pricing system, pharmaceutical companies may only charge a single exit price (SEP) for medicines in the private sector, regardless of the volume procured. The SEP is the factory gate price (in South African Rand [ZAR]) and includes the logistics fee paid to wholesalers and distributors. The Minister of Health sets a maximum annual increase as well as maximum dispensing fees to be charged by pharmacists and other licensed dispensing practitioners. In addition, the Medicines and Related Substances Act (Act 101 of 1965) prohibits any form of bonusing, sampling, or discounting in the supply of medicines.

Although pharmaceutical companies may provide HTAs to support these private sector prices, use of the guidelines for pharmacoeconomic submissions published in 2012 (15) remains optional. Importantly, the launch SEP for a newly marketed medicine is not subjected to any pharmacoeconomic evaluation and is at the sole discretion of the manufacturer/importer. Under current regulations, the Director-General of Health may request a pharmacoeconomic analysis to justify the launch SEP, but this mechanism has not been used to date.

In contrast to the process used to set the SEP for medicines in the private sector, the price of EML medicines/consumables available in the public sector is the result of the national tender process, reference pricing, and price negotiations with manufacturers/suppliers. National pharmaceutical tenders are managed by the NDoH Affordable Medicines Directorate, with input from provincial representatives, academic leads and NEMLC members, and employing set criteria.

Council for Medical Schemes

There are currently seventy-six medical insurance schemes registered in South Africa, serving 8.89 million beneficiaries (4). A medical scheme is a form of voluntary health insurance which is a mutual, not-for-profit entity, governed by a board of trustees. Medical schemes are frequently provided partially or wholly within employment packages, with a dedicated scheme for government employees and dependents. Members contribute monthly premiums (in ZAR) toward a pooled fund in exchange for the scheme taking financial liability for costs associated with relevant private healthcare services, in accordance with a predefined set of scheme rules (16).

Medical schemes are regulated by the Council for Medical Schemes (CMS), a statutory body established by the Medical Schemes Act (Act 131 of 1998). The CMS maintains the Prescribed Minimum Benefits (PMBs), which is a set of defined benefits all medical insurers are mandated to cover (i.e., costs relating to diagnosis, treatment, and care) for all members regardless of the benefit option they selected (17). For twenty-five diagnoses on the Chronic Disease List (CDL), the CMS also provides treatment algorithms defining which medicines must be covered as PMBs. In relation to HIV care, medical schemes are required to offer at least the treatment and prevention options provided in the public sector. To some extent, albeit without clear legislative backing, the public sector EML/STGs establish a standard of care that is applied by the CMS in PMB definition, especially when there is no specific CDL algorithm for a specific condition. This link between the EML/STGs and the PMBs has been highlighted as a point of concern in that it might perversely incentivize manufacturers of technologies to seek the listing of technologies on the EML/ELL (at acquisition prices achieved through the national tendering process) with the aim of increasing private sector sales (at legislated SEPs that are usually higher than public sector prices).

Existing legislation explicitly requires that medical schemes apply evidence-based medicine principles in the development of healthcare programs and funding policies, taking into consideration cost-effectiveness and affordability (16). In the past, there was no formal HTA process applied to the determination of PMB conditions, but the CMS is incorporating some HTA principles in the current PMB review process (18). Multiple stakeholders provide input to the development of benefit definition guidelines.

Medical Scheme Administrators and Managed Care Organizations

Medical scheme administrators and managed care organizations (MCOs) are for-profit entities that are subject to registration and accreditation by the CMS under the Medical Schemes Act (1998). While some medical schemes have in-house administration functions, others contract administrators for functions including benefit design and data management. MCOs, which can either be independent business entities or subsidiaries/divisions of medical scheme administrators, are tasked to perform the functions of “clinical and financial risk assessment and management of healthcare, with a view to facilitating appropriateness and cost-effectiveness of relevant health services within the constraints of what is affordable, through the use of rules-based and clinical management-based programmes” (16). In so doing, medical schemes use HTA and forms of stakeholder engagement to inform benefit definitions and risk management strategies.

Manufacturers or suppliers usually initiate the HTA process by submitting clinical and economic evidence dossiers using the templates provided by the assessing organization. These submissions are subject to reviews of the published clinical data, followed by assessments of the financial implications of introducing the technologies. Clinical effectiveness, affordability, and the impact of introducing an intervention on medical scheme premiums are important decision-making criteria, with training requirements, organizational impact, and acceptability also considered. End-user preferences and input can be submitted as part of the evidence submissions and applicants may appeal negative decisions under certain circumstances.

The approach to HTA within the medical scheme environment is fragmented. Several HTA processes are in existence within the various administrators/MCOs, and many are reported to be well developed. However, these forums are convened independently of each other. This is in part due to concerns surrounding the potential for collusion amongst MCOs, as well as the inclusion of large amounts of “commercial in confidence” information which limits the opportunity for external peer review. Given the different member profiles and differences in financial status of the medical schemes, the decisions made are not applied consistently across the privately insured population (between schemes as well as within schemes for different scheme options). The performance of managed care interventions, in particular, forms the basis for competition between administrators and is therefore not openly reported.

Academic Units

Academic units in South Africa routinely publish cost-effectiveness analyses and provide technical and/or clinical expertise that directly inform decisions on health technologies. Many academics also hold formal positions on decision-making bodies, such as NEMLC and the PC. Despite their core role in supporting HTA in South Africa, there is no central coordination, prioritization, or funding of HTA-related research, meaning that research is likely to be driven by individual research interests and funding priorities from predominantly international funders.

There are many institutions in South Africa offering courses or degree programs that support HTA capacity, frequently housed in Schools of Public Health, Science Councils, or Health Sciences Faculties/Colleges. Research for the award of postgraduate degrees has been aligned to HTA policy questions to provide additional analytical capacity for existing processes.

Clinical Societies and Associations

Many clinical societies and/or associations produce clinical guidelines (Reference Wilkinson, Wilkinson and Kredo19), but the methodological rigor and impact of the guidelines varies significantly (Reference Kredo, Wiseman and Gray20). Health economic evidence is usually not considered in the production of these guidelines. These guidelines often guide clinical practice in the private sector but also impact on the provision of clinical care in the public sector, albeit indirectly.

Clinical societies also develop and introduce clinical coding guidance and norms which facilitates the introduction and reimbursement of new technologies.

Industry

The pharmaceutical, medical device, and in vitro diagnostic industries utilize in-house teams as well as private consultancies to produce clinical and costing evidence required for reimbursement consideration. In addition, pharmaceutical companies can also provide HTAs to support private sector price applications to the PC. As many of these analyses contain proprietary information, there are limited examples in the public domain, which increases risk of duplication and unwarranted methodological variation.

Private Consultancies

There are multiple consulting organizations and individuals providing analytical services to inform health technology funding decisions. These services are mainly focused on the private sector but could potentially be utilized for public sector HTA activities under coordinated governance and commissioning mechanisms.

Hospital Groups

Private hospital groups are conducting HTAs to inform equipment and other medical device procurement decisions. Hospital-based HTA processes have been evolving over the last few years but tend to operate in isolation from the other institutions involved in HTA activities.

Principles for HTA under NHI in South Africa

HTA in support of NHI is anchored in ideals of UHC and contributes to defined policy objectives such as improving health outcomes, addressing inequalities in access to effective health technologies, and achieving value for money. Equity is a central theme and motivating factor for NHI implementation—to address persistent historical inequities in access to and financing of healthcare in South Africa.

Governance is a critical requirement of a successful HTA system. HTA processes in South Africa will need to incorporate strong leadership, management, transparency, accountability, and sustainable funding.

Barriers and Risks to the use of HTA in the Current Environment

The opportunities, challenges, and potential solutions to elements of HTA and NHI policy reform have been reported extensively (Reference Siegfried, Wilkinson, Hofman, Padarath and Barron9;Reference Blecher, Daven, Harrison, Moeti and Padarath21) and agencies like the National Institute of Health and Care Excellence in the United Kingdom and the Health Intervention Technology Assessment Program in Thailand have provided a potential vision for local policy makers. However, delays in implementation of various aspects of NHI have frustrated progress. Weak coordination and harnessing of valuable HTA skills risk South Africa falling behind middle-income country peers in developing HTA institutions, well-considered benefit packages, and a robust and consistent approach to economic evaluation.

The lack of consolidation and coordination of HTA and a dedicated funding plan at the national level remains the central barrier to HTA in South Africa. NHI will require integration of many of the processes detailed in this paper, notably the established EML/STG process with other guideline-producing units. Although there are international examples of clinical guideline production operating separately to individual technology funding decisions, this may not be an efficient use of current limited capacity. Institutional notions of ownership of particular HTA functions will need to be relaxed to enable a common, open, and multi-institutional approach to the delivery of the HTA process.

There is a very small pool of HTA analytical, procedural, and project management capacity in South Africa. This creates a risk that individual interests, piecemeal funding, or poor-quality analysis can drive HTA decisions. Major initiatives such as dedicated HTA commissioning budgets and mandated requirements for HTA from the industry will increase demand. A coordinated and long-term capacity strengthening approach involving NHI planning stakeholders, academic organizations, public sector units, and the private industry will be needed to proactively address supply.

The limited inclusion of patient and public stakeholders in existing HTA processes in South Africa creates a risk that the voices of those that the HTA process is intended to serve are not incorporated (Reference Cannon22). The mechanism for wider stakeholder engagement in HTA will need to be tailored to South Africa’s unique social and cultural context.