/ 6 September 2004

How pharmacies plan to survive

Pharmacists across the country are introducing a range of new charges now that they are limited in the prices they can ask for drugs, players in the industry said on Monday.

”We can charge for any service. Everything that you do for the patient, the patient must pay for,” said Piet Roos, a pharmacist in Pretoria North. ”This is very sad.”

Each pharmacy will work out its own pricing system and there is likely to be much manoeuvring before prices settle down, said Nick Anderson of Discovery Health.

New Clicks Holdings, the largest pharmacy group in the country, charges R15 to deliver medicines, said spokesperson Graeme Lillie.

This compares with Roos’s R5 delivery charge.

Lillie said other charges Clicks customers will incur are R15 for each item they want to buy on medical aid and a ”professional service” charge that has not yet been finalised.

Roos is disappointed in the new system because he is being forced to change his business from a friendly, helpful organisation to one where customers with the smallest question will be forced to pay for a consultation.

”The pharmacies will change almost into doctors. We will have a waiting room and make an appointment. Everything that you want, you are going to pay for — blood pressure, blood sugar, cholesterol.”

However, Roos admitted that it might benefit people to be able to choose whether they want to spend money on a service.

People who do not need their medicines delivered will no longer be subsidising those who previously received this service for free.

Pharmacies began to implement these changes when an application by New Clicks Holdings, the Pharmaceutical Society of South Africa and six other parties to overturn medicine-pricing regulations failed in the Cape High Court on August 27.

Pharmacists are now only allowed to charge a 16% mark-up on over-the-counter drugs, and 26% (to a maximum of R26) on prescription drugs.

This, pharmacies have been saying for months, is not enough for them to continue in business.

The applicants will appeal the ruling, but Roos, and many other pharmacies, have accepted this as the final judgement.

”My personal feeling is that we’ve lost it. There are pharmacies already on this new system. Within days I believe all the pharmacies will move in this direction,” he said.

All pharmacies consulted believe that in imposing service charges they are acting according to the regulations laid down by the government.

”We are acting under pharmacy council guidelines endorsed by the court,” said Lillie.

The Department of Health was reluctant to commit itself until it has investigated exactly for what pharmacies are charging.

”As a department we have got quite clear guidelines. As long as it is not part of a normal dispensing function, pharmacies are allowed to charge for it,” said departmental spokesperson Sibani Mngadi.

Lillie said the new charges cover expenses such as ”medical aid administration and communication with the medical aids”.

He could not say whether these service charges will allow Clicks’ pharmacies to remain in business.

”I wouldn’t like to commit Clicks as to whether this makes it viable or not. They still believe the medicine pricing regulations must be reviewed,” he said.

The new regulations are intended to decrease the price of medicines for all. Before, only those with medical aids that negotiated on their behalf could get discounted drugs.

There is some indication already that drug prices have gone down, although not by the promised 15%.

The question is whether these new strategies by the pharmacies will result in the customers paying just as much for their medicines, said Anderson.

”This would undermine the intention of the Medicine Act. However, there will be transparency in all services as well as the pricing of medicine. This will be a good thing for the consumer,” he said. — Sapa