Challenges In Regulating The Pricing Of Medicines In South Africa 2003 – 2008
Date
2011-11-10
Authors
Rathupetsane, Phatudi Justice
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Abstract
The pricing of medicines has been unregulated in South Africa until the recent
past. The pharmaceutical industry was the sole determinant of medicines
pricing, resulting in high medicine prices acting as barriers to access to
medicines and therefore quality healthcare for many South Africans. This
phenomenon is not only true for developing countries like South Africa, but also
an international dilemma affecting the developed countries of the world. The
adoption of the National Drug Policy in 1996 and subsequent legislative changes
including the introduction of regulations for the pricing of medicines in 2003
generated high interest. The new medicine pricing regulatory environment would
see the setting of a single exit price for medicines, elimination of a mark-up
system and perverse incentives, and the imposition of limits to professional fees
(e.g. dispensing fees) charged on medicines. It was considered a crucial
intervention intended, inter alia, to lower the cost of medicines, promote cost
effective and rational use of medicines.
A qualitative research methodology was used to collect data by interviewing
participants (i.e. mainly retail pharmacists and consumers) in urban and semi
urban environments in the Limpopo province. In addition, key national
government officials responsible for the medicines pricing policy and
representatives of pharmacy professionals’ associations were interviewed. A
quantitative dimension was also selectively pursued to further elaborate
emerging patterns. Information such as lists of newly opened or closed retail
pharmacies, amongst others in addition to descriptive records were requested for
analysis following qualitative interviews.
The study found implementation process was characterized by conflict between
stakeholders and government. Several different stakeholders at different stages
argued or contested certain legislative aspects citing poor consultation and
negative effects for the industry in general.
III
In respect of retail pharmacy, the ongoing difference is around the formula to
determine appropriate dispensing fees. Early signs of unintended outcomes were
detected like the closure of independent pharmacies versus opening of new
pharmacies by big retail industry players. In addition, the prolonged difference
with the retail pharmacy industry sustains in certain areas high medicines prices,
somehow violating the socioeconomic rights of citizens, and therefore
unconstitutional. Interestingly, following the implementation of the Medicines
Amendment Act in 2003, medicines have become affordable, though this benefit
has not been fully transferred to the South African Public.
Access to medicines remains an elusive concept in semi-rural and rural
environments requiring some government intervention to create access. A
flexible framework for dispensing fees is therefore proposed for the retail
pharmacy industry amongst other government interventions to derive maximum
benefit for the South African public from this policy intervention. In addition,
government should consider public private partnerships amongst other
interventions to address access to medicines in rural areas.
Description
MM thesis - P&DM
Keywords
Price control, Regulation of medicines, Pricing of medicines