Prices of Pharmaceuticals to the South African Public - Will They Drop?

We have reported previously on Section 15 C of the Medicines and Related Substances Act No. 101 of 1965 which allows the Health Minister to prescribe conditions for the supply of more affordable medicines in certain circumstances so as to protect the health of the public in South Africa. Section 15 C provides, in particular, for the parallel importation of medicines.

The regulations enabling the provisions of Section 15 C to come into effect were promulgated last April. Despite this, the intense public interest which surrounded the bringing into effect of Section 15 C and the Court action which it gave rise to, the parallel importation provisions of Section 15 C do not seem to have been utilised to any material extent, thus far. Whilst Section 15 C may not be achieving cheaper pharmaceuticals, it is pleasing to note that companies which own patents on anti-retrovirals have come a long way during the past year towards meeting the needs and wishes of the South Africa Government and public. Licences have been granted for the manufacture and sale of generic anti-retrovirals in South Africa. Anti-retrovirals are now available to large sectors of the South African public at far lower prices.

Draft regulations have recently been published which could have an even more significant effect on the pricing and cost of pharmaceuticals to the South African public. These draft regulations, published in terms of Section 22 G of Act 101 of 1965, seek to control the pricing of pharmaceuticals in South Africa. This is achieved by controlling the mark-up which persons in the supply chain, for example a wholesaler and distributor, are allowed and by controlling dispensing fees of pharmacists. The regulations control further the annual increases which a manufacturer or importer of a pharmaceutical may wish to apply. Such increases are to be determined by the Minister of Health after consultation with the Pricing Committee, already appointed. Increases greater than that determined by the Minister may be allowed, but only in exceptional circumstances.

The Government expects the regulations to have a significant effect on the cost of medicines to the South African public. Whether or not this will be achieved in practice remains to be seen, particularly as the pharmaceutical industry has still to comment on the draft regulations. Amendment to the regulations is still possible.

Anthony Hooper

Spoor & Fisher

Date published: 2004/01/01
Author: Anthony Hooper

Tags: pharmaceutical prices south africa