The Department of Health said on Monday it intends to take its fight further to maintain controversial medicine-pricing regulations, following the Supreme Court of Appeal’s voiding of the regulations.
The court earlier granted leave to appeal — and simultaneously upheld the appeals of the Pharmaceutical Society of South Africa (PSSA), New Clicks South Africa and six other entities that own pharmacies — against a Cape High Court judgement dismissing their application for the scrapping of the regulations.
The bodies challenged the regulations, which control the factory exit price of medicines and restrict pharmacists to a maximum dispensing fee.
The appeal court found the fixed dispensing fees are inappropriate as they fail to consider the viability of the dispensing industry. It also found regulations relating to a single exit price introduced a price-control mechanism not envisaged by the Medicines and Related Substances Act.
The pharmacists, in an unusual step in late November, applied directly to the Supreme Court of Appeal for leave to appeal against the Cape High Court’s dismissal of their application.
Judge of Appeal Louis Harms in his judgement set aside the regulations on the ground that they do not pass the test of legality, and are consequently ”beyond the power” (ultra vires) of the enabling Act.
Reacting to the ruling, Dr Humphrey Zokufa, head of pharmaceutical policy and planning in the national Department of Health, said the department will appeal against the judgement, and the state attorneys have already drafted an application for an appeal in this regard.
”We, as the Department of Health, feel that the Bloemfontein Supreme Appeal Court had no jurisdiction on this matter.
”The court findings that the pricing committee and the minister of health exceeded their powers were also wrong.
”Therefore, the judgement delivered today [Monday] was wrong, and we will take this matter to another court.
”We will file a notice of appeal against this judgement in the Constitutional Court tomorrow [Tuesday], the effect of which would be to suspend the judgement of the Bloemfontein appeal court.”
The department believes the actions of the PSSA, Netcare Group and New Clicks are aimed at preserving and maintaining the practices that ensured their profitability at the expense of the consumer, Zokufa said.
Ruling welcomed
However, the ruling was welcomed by others concerned. PSSA spokesperson Lorraine Osman said: ”What the judgement means in effect is that the pricing regulations are no longer in operation.”
”We believe that the Department of Health will need to revisit the regulations, and we are offering whatever help we can. What is needed is the creation of an effective partnership to promptly finalise a set of regulations that are in line with the principles of a transparent pricing system and an appropriate dispensing fee,” she said.
PSSA president Siddiq Tayob said the ruling is good news for pharmacists and consumers.
”It does away with current uncertainty in the medicine supply chain brought about by the implementation of the medicine-pricing regulations and the severe losses pharmacies have experienced.
”Pharmacists now hope to meet with officials of the Department of Health to pick up the pieces to ensure affordable, accessible, sustainable and viable delivery of pharmaceutical services to the entire South African population.”
New Clicks chief executive Trevor Honneysett said the company feels vindicated from a legal perspective, but is concerned the issue of affordable, accessible medicine has not yet been adequately resolved.
The only solution, he said, is for the industry as a whole to bring prices down, and not for the government to intervene through regulations focusing on only one side of the supply chain.
South African National Consumer Union chairperson Ina Wilken also welcomed the judgement, saying it eliminates great confusion and an added cost burden on consumers that arose from the regulations.
The effect of the regulations was that pharmacies started charging their clients an administration fee to make up for dropping revenues from dispensing — which medical-aid schemes in turn refused to pay for.
The PSSA said there will no longer be a need for pharmacists to charge such an administration fee.
In their reactions, the pharmaceutical companies committed themselves to working with the Department of Health to find a viable alternative to the scrapped regulations.
Democratic Alliance spokesperson Sheila Camerer said the government should rethink its approach to medicine pricing in the light of the ruling.
”We urge the government to seize on the court judgement as an opportunity to rethink its approach, and replace what has failed dismally with a system of light and transparent regulation.
”[This] will allow pharmacies to get back on their feet, and will result in real falls in the price of medicines that are paid by consumers,” she said.
Inkatha Freedom Party spokesperson Dr Ruth Rabinowitz said it is unfortunate that what began as an attempt to get cheaper medicines to the public, and facilitate treatment for HIV, had dissolved into a battle between the country’s courts. — Sapa