A Comparison of Tender Prices and Single-Exit Prices for Medicines in South Africa for the Period 2018–2022

Abstract

Background: Medicine affordability is a critical concern in South Africa's dual public/private healthcare system, where distinct pricing mechanisms (public tenders, private Single Exit Price (SEP)) aim to lower costs for equitable access. Despite these efforts, significant price differentials persist, with higher private sector prices posing an affordability barrier. This study compares public and private sector medicine prices from 2018-2022, a period strategically chosen to capture the evolving landscape shaped by National Health Insurance (NHI) progression and the COVID-19 pandemic's impact. Method: A retrospective quantitative analysis was conducted on public tender prices and private Single Exit Prices from 2018-2022. A basket of 31 essential medicines, adapted from WHO/HAI methodology to include South African Essential Medicines Listed drugs selected. Medicines were matched by active ingredient, formulation, and strength, then grouped into acute, anti-infective, anti-retroviral, and chronic categories. Prices were standardised to a per-unit basis. Analysis involved descriptive statistics, trend plots, and annual percentage changes, using public median prices and private median/minimum prices. Quantity-weighted price changes were assessed using Laspeyres, Paasche, and Fisher Price indices providing comprehensive insights into pricing dynamics. Results: Medicine prices generally increased in both sectors from 2018-2022. Private sector prices were consistently and substantially higher than public sector prices for most medicines, with the private sector median for the total basket averaging 312.2% greater than the public sector median. The public sector's quantity-weighted Fisher index surged in 2021 (from 109.05 to 124.23), indicating notable expenditure escalation, while the private sector's quantity-weighted prices remained remarkably stable relative to its 2018 base. Conclusion: This study highlights a persistent and concerning disparity in medicine affordability between South Africa's public and private sectors. While both tender prices and SEPs increased, the significant rise in public sector quantity-weighted prices raises public health expenditure concerns, and consistently higher private sector prices continue to impede equitable access to essential medicines. Policymakers are urged to consider strategic interventions to address this price disparity and ensure affordable, equitable access for all South Africans.