[People cite the benefits of this socialist price-fixing. But we may see many other problems arising out of this including people getting discounts, etc. Let’s see if the benefits are what they predict them to be. Experience with the ANC is that their laws always leave devastation in their wake and the expected benefits are unlikely to materialise. Jan]

Pharmacists around the country are expected to lose R580-million in revenue as new medicine pricing regulations come into effect over the next four months.

Research conducted by Discovery Health into the impact of the pricing regulations contained in the Medicines and Related Substances Act found that pharmacists and dispensing doctors stand to lose a combined R1-billion after all these regulations become law.

But consumers, who now find themselves paying more for their medication, could see a drop in prices as early as next month.

Medical aids also stand to gain through the implementation of the regulations.

The regulations are aimed at reducing the overall cost of medication by removing perverse incentives. The increased transparency makes provisions for the outlawing of the acts of bonusing, discounting and rebating.

The regulations also stipulate that a professional fee for dispensing services – capped at 26 percent for prescription medicines under R100 and R26 for medicines over R100 – must replace the mark-up on products; and that a single exit price (SEP) for each product must be set by the manufacturer and be printed on the pack.

The study found that in the past, pharmacists marked up their products by an average of 33 percent. Pharmacists would also dispense higher priced drugs to their customers, as their remuneration would be higher.

But this will no longer happen as pharmacists will only be allowed to add their dispensing fee to the SEP set by the manufacturer.

Pharmacists have expressed their dissatisfaction over a number of issues relating to the legislation, but are adamant that with their dispensing fees being capped, three-quarters of South Africa’s pharmacies would close down because they would become unsustainable.

According to the analysis, the cost of medicines in hospitals should drop by an estimated 20 percent, while some out-of-hospital medicines could drop even further.

However, Discovery’s Hylton Kallner believes that the Health Department’s estimates of savings of up to 30 percent on the price of medicines is unrealistic.

The department believes that the introduction of an SEP will bring a saving of up to 15 percent on branded products and up to 30 percent on generic medicines.

The Health Department was due to meet the Pharmaceutical Society of South Africa and the National Association of Pharmaceutical Wholesalers on Friday to discuss the matter.

This article was originally published on page 3 of The Star on May 07, 2004

Source: Independent Online (IOL)
URL: http://www.iol.co.za/index.php?index.php?clic…/p>