The week before last, Dr Anban Pillay made certain statements about pharmacists and pricing regulations (“Pills without frills”).
The Department of Health is now in the unenviable position of having to deal with the aftermath of introducing a fee that, in the words of Judge Jeanette Traverso, appears to be a “thumbsuck”.Â
If the department intended the dispensing fee to cover all business costs, and to adequately remunerate the pharmacist for services and provide a return on investment, it has failed abysmally.
It is unlikely that pharmacists will recover operational costs from the dispensing fee. It is therefore unsurprising that pharmacists have resorted to cost-recovery mechanisms to try to compensate for their loss of revenue. In business, cost recovery is a necessity not a privilege.
In addition to consumers who are members of medical aids, many people without this insurance use pharmacies for health advice and medicines. It is easy to lose sight of the fact that pharmacists (especially in rural areas) play a critical role in providing primary health-care services. Â
An environment conducive to sustainable service is critical for pharmacies. A major problem in rural areas is the fact that doctors have indiscriminately been given licences to dispense, effectively depriving pharmacies of the prescriptions they require to sustain themselves. Ironically, the regulations, far from encouraging pharmacists to establish themselves in rural areas, will serve to drive the few remaining pharmacies out.
Private sector pharmacists are unlikely to transfer to the public sector. The Pharmaceutical Society of South Africa (PSSA) is particularly concerned that pharmacists are leaving the profession.Â
It is fallacious to say that retail pharmacists use only 10% of the knowledge acquired at universities. They may not actively use the pure sciences in their practice, but this knowledge underpins their professional activities and gives authority to their faith in products registered in this country.
There is no evidence that the department has tried to protect small pharmacies. The perception that there is now equity between acquisition prices paid by small and large pharmacies does not apply to the big chains that are also registered as wholesalers.
The PSSA, in its various proposals, has never suggested a dispensing fee of 50% to 70%. The preferred approach would be to allow the downward pressures exerted by competition and the reimbursement policies of medical schemes to regulate prices.Â
Notwithstanding this, a proposal was made by Managed Healthcare Systems, on behalf of the PSSA, to utilise a percentage, a fixed rand component and three threshold levels. This aimed at ensuring a reasonable relationship between the fee that the pharmacist could charge and the drug price. A benefit of this is that it would contain the price of cheap medicines while ensuring that access to expensive medicines would not be restricted.
The PSSA commissioned research that included the analysis of about eight million prescription items. Other research has concluded that the level of the dispensing fee was inappropriate and would precipitate the closure of pharmacies.
It is instructive to note that the department has not suggested how it arrived at what it considers to be an appropriate dispensing fee, nor that studies had indicated that the fees were adequate to sustain pharmacies. It has, in fact, not explained the logic applied in arriving at the current dispensing fee.
There is no evidence that there was sufficient interaction with other government departments, such as trade and industry or finance, or that the correct procedure was followed in terms of the Nedlac Act.
It is surely in the best interest of this country that existing infrastructure should be maintained and strengthened rather than collapsed. The repercussions of the department’s actions could, in fact, run contrary to the country’s objectives of job creation and tax generation.
The PSSA would like to see a healthy profession providing essential services to the public. It understands the importance of having strong private and public sectors and would like to see more cooperation between the two. We hope that speedy resolution of this problem will bring stability to pharmacies and the efficient delivery of health care in this country.
Lorraine Osman is head of public affairs at the Pharmaceutical Society of South Africa
Read Pills without frills