New Clicks Holdings, which has created a new retail pharmacy chain in South Africa, has instituted urgent legal proceedings to have the new medicine pricing regulations set aside and declared invalid, a statement said on Wednesday.
Group leader Trevor Honneysett said the group believes the pricing regulations are financially and legally unsustainable and will cause irreparable damage to retail pharmacy and the pharmaceutical supply chain.
”In South Africa [the] retail pharmacy is an important distributor of medicine to the general public. The destruction of [the] retail pharmacy would have a serious impact on the provision of medication to the public, particularly people in rural areas.”
He said that the group supports the transparent pricing mechanism and that one of the drivers behind their move into the pharmacy arena is to achieve cost savings.
The group has engaged with the Department of Health on alternative financial models but so far these have not met a favourable response.
”New Clicks has been left with no alternative but to challenge the regulations in court,” he said.
In terms of the Medicines and Related Substance Act, gazetted in May, drug prices will be governed by a single exit price and pharmacists may not exceed a set dispensing fee, which pharmacies say is too low for their businesses to remain viable.
The single exit price is calculated according to a formula by the manufacturer, and approved by the director general of health.
New Clicks claims that the single exit price is not in accordance with the Act and so the mechanism is irregular.
It also feels that Minister of Health Manto Tshabalala-Msimang has not complied with her obligation under the Act to prescribe ”an appropriate dispensing fee”.
”The fee which has been prescribed is not appropriate because it imperils the economic viability of retail pharmacy in South Africa and frustrates — rather than facilitates — the objectives of the Medicines Act,” the statement said. — Sapa