Medicine prices to be slashed
Candace Freeman
16 January 2004
Health Minister Manto Tshabalala-Msimang has announced the implementation of a set of draft regulations that will see the prices of medicines in South Africa drop by between 40% and 70%.
In terms of the draft regulations, distributors and wholesalers can only charge a fee of up to 15% of the manufacturer's exit price for a medicine that costs less than R40. Where the price is R40 or more, the maximum fee should not exceed R6.
This means that where the exit price is R40, distributors and wholesalers can only add a fee of R6 or less, so the consumer will pay not more than R46.
The single exit price includes all costs associated with the manufacturing and sale of medicines or scheduled substances.
A pharmacist can charge a dispensing fee to the maximum of 24% of any medicines with an exit price of less than R100. Where the single exit price is R100 or more, the dispensing fee should not exceed R24.
Any other person who is
licensed to dispense medicines can charge a fee of not more than 16% of a single exit price of less than R100, and R16 for medicines that cost more than R100.
In light of the current gap between the Manufacturer Net Price (MNP) and the actual price, the regulations stipulate that the single exit price should be set no higher than 50% of the present MNP.
"In general, medicines with the lowest prices will have small percentage reductions, and those with the highest prices will have greater reductions," Tshabalala-Msimang said.
The supply of medicines through incentive schemes will also be prohibited as of 2 May, when section 18A of the Medicines Amendment Act comes into effect.
"Our research has indicated that formally listed Manufacturer Net Price of medicines has been inflated to allow for the impact of a complex system of bonuses, rebates and other incentive schemes within the pharmaceutical industry", the minister said.
This incentive system allows
hospital groups, pharmacy groups and other major outlets to obtain medicines at prices about 50% below the listed MNP.
"Due to complex mark-ups in the distribution chain, the consumer seldom benefits from these incentive schemes, and furthermore, not all outlets are eligible for the bonuses and rebates," Tshabalala-Msimang said.
The new regulations are to be implemented on 2 May, giving members of the public three months within which to comment or make representations on the proposed regulations.
Source: BuaNews
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