She dodged the threat of legal action by Aids activists, and then had to deal with apparent threats from drug firms to pull out of the country. All in all, it was a torrid week for Minister of Health Manto Tshabalala-Msimang.
This week a furore involving multinational pharmaceutical companies erupted after two stakeholder panels were held in Johannesburg to discuss the implications of the Department of Health’s draft regulations for a transparent pricing system, which aims to cut the costs of medicine up to 70%.
The Ministry of Health also had to defuse the threat of legal action by the Treatment Action Campaign (TAC) to force it to implement an interim plan to procure anti-retroviral drugs before the full, scheduled roll-out in June that the government has promised.
The controversy over whether pharmaceutical giants will leave the country began when Paul Stewart, Boehringer Ingelheim’s CEO, said during Tuesday’s panel discussion that his company is considering pulling out of the country if the draft regulations are adopted. All industry stakeholders have until April 16 to make submissions to the health department.
The draft regulations say manufacturers must set a ”single exit price” at which a medicine will be sold, and stipulate that this price be set no higher than 50% of the present ”listed” price.
On Thursday the minister slammed Boehringer Ingelheim for what she called its ”bullying tactics” in undermining the efforts of the department to make medicines more affordable.
She also said the company operates in other countries with similar pricing regulations but doesn’t threaten these governments. But Boehringer Ingelheim spokesperson Kevin McKenna told the Mail & Guardian on Thursday that Stewart’s comment needed to be placed into context of how much the company has contributed to the country’s economy since the 1960s.
”We noted the minister’s comments but our record shows that, as a company in South Africa, we do not deserve the term ‘bullying tactics’.
He said if the discount of 50% is accepted, then, like any business, the company will have to review its investment in the country. ”I am assured that he [Stewart] did not threaten to pull out.”
However, industry experts say that the department and pricing committee should not ignore these concerns — because the regulations could result in job losses, multinational drug firms pulling out of the country, and essential medicines being discontinued.
The concerns of multinational corporations are legitimate because the regulations are poorly designed and ”blunt,” said Andy Gray, senior lecturer in the department of pharmacology at the University of KwaZulu-Natal.
”The 50% cut in manufacturer net price is untenable for many parts of the distribution chain, not just the multinationals.
”I think the multinationals are legitimately using the threat of pull-out as leverage. That does not, however, mean that they’ll need to get everything they ask for if they stay,” said Gray.
Leon Louw of the Free Market Foundation said the drug giants have been trying to appease the government ”in a vain attempt to ameliorate the relentless assault on them by saying they aren’t divesting”. He believes drug firms are pulling out — ”everyone should know they are like any other business”.
On Wednesday the minister responded to the TAC’s legal threat on interim anti-retrovirals by appearing to give in.
But Jonathan Berger, attorney at the Aids Law Project, said that while the project welcomes the overture by the minister, it still remains cautious as no time frames have been set.
In a responding letter, the project has asked the minister to meet with the TAC and also respond to a list of questions on time frames of when provinces must submit patient targets, and a list of sites and dates where and by when companies will be expected to supply the required medicines to the provinces.