The cost of medicines has already dropped by 16,4% since the beginning of May, an analyst told industry representatives in Johannesburg on Wednesday.
Further decreases are expected.
”Sure, there’s chaos at the moment but it’s going to be worth it in the end. It is clearly of benefit to the consumer,” said David Boyce, a health-care analyst.
He was speaking to representatives from medical schemes, pharmacies and medicine manufacturers who had met in Johannesburg to try to find a unified voice on medicines pricing.
The Department of Health was not able to attend, the organisers said.
During the morning’s discussion it seemed that each sector of the health industry is hoping to maintain its profit margin in the face of an entirely new system of medicines pricing, forced on the industry by the Department of Health.
Since May pharmacists have been required to sell all medicines at a single exit price, which is charged to all customers.
Because medical schemes had been receiving a 20% discount before the new pricing regulations came into effect, the 16% drop in pricing translated to a 4% increase in prices to medical schemes, Nick Anderson, general manager of Discovery Health, told the meeting.
He also disputed the results, saying other analysts had only reported an 11,8% price drop.
Medical schemes are willing in the short term to ”take a hit in the profits” so as not to affect their members, said Anderson, but he called on other industry players also to do their bit.
”We have come to the party,” he said.
However, representatives from pharmacies, which seem to be the hardest hit by the new legislation, indignantly claimed they have been victims of the medical aids for far too long.
”The medical schemes must either get the shortfall from their members or they must foot the bill,” said Julian Solomon from the United South African Pharmacies, which claims that under the current legislation no pharmacy can stay solvent.
He later said the manufacturers can also help by dropping their cost prices further.
”They are making millions of rands profits every year. Pharmacies make on average 2,7% to 4% before tax,” he said.
Various experts have projected that hundreds to thousands of pharmacies could get driven out of business by the end of the year now that they can no longer control their own prices.
The discussions on Wednesday were intended to find feasible recommendations pending the outcome of a court case that the Pharmaceutical Society of South Africa and other parties have brought against the Department of Health.
Representatives agreed to provide clear guidelines by Monday on what is a reasonable markup for medicines. This will put them in a better bargaining position with the government.
Although medicine prices are already coming down, some critics commented that the projected savings to the customer, which Val Beaumont put at R2,4-billion, are not realistic, as companies will simply increase the prices of other commodities in order to recover their profits.
Dr Kosi Letlape of the South African Medical Association said despite the chaos this is a good opportunity for the industry to reassess itself and improve its service.
He challenged participants to come up with solutions to their problems.
”The only limiting factors in South Africa are courage and creativity,” he said. — Sapa