The Department of Health on Monday urged the public to report pharmacists not abiding by the maximum R26 dispensing fee rule for medication.
The government insists this is the legal maximum that pharmacists may charge.
”We urge South Africans to refuse to be subjected to this exploitation. The violation of the medicine pricing regulations, which put the dispensing fee at 26% to the maximum of R26 for prescribed medicines, should be reported to the Department of Health,” the department said.
”There are retail pharmacies that are complying with medicine pricing regulations and we request the public to shop around to get good prices that are regulated by government.”
In a strongly worded statement, the department said that Managed HealthCare Systems (MHS), a company contracted by pharmacists to come up with an alternative medicine pricing structure to that set by government, had advised pharmacists to charge a dispensing fee of up to 50% ”plus an unexplained fixed fee of up to R40.”
The department added that it was in possession of correspondence from MHS chief executive David Boyce, dated January 07, and addressed to community pharmacists advising them to adopt the organisation’s medicine pricing model.
”In the correspondence, Boyce states that the structure of the MHS dispensing fee model was ‘accepted and endorsed by the Exco’s of the PSSA (Pharmaceutical Society of South Africa), Community Pharmacy (CPS) and USAP (United South African Association of Pharmacists).’ He says these fees are applicable from January 01, 2005 to December 31, 2005 and all pharmacy software vendors have been requested to make this structure available in their pharmacy dispensing software packages,” the statement said.
”It is clear that retail pharmacy bodies have interpreted the intention of creating a transparent pricing system for medicine as an opportunity for pharmacists to earn more money. The pricing structure formulated by MHS does not only undermine the country’s efforts to make medicine more accessible especially to the poor but
also it is illegal as the medicine pricing regulations set by government are effective in terms of the Medicine and Related Substances Act.”
The department explained that under the MHS system a manufacturer could sell a packet of 20 Stopayne painkiller tablets at about R31,45. Pharmacists will add a fixed fee of R5,50, putting the price at R36,95 before charging another 50% (R18,48) of this amount. The medicine will end up selling at R55,43.
”This means that the pharmacist will end up making a return of 76% (R23,98) on a medicine bought from the manufacturer at R31,45.”
When applying government pricing regulations the same medicine would cost R39,63.
When approached for comment the PSSA’s executive director Ivan Kotze said the department had ”skewed it totally” by using two extremes.
The department’s 26% calculation would reveal a 2,1% total income on a medicine costing R1 000.
He said that it was against the Competition Act for the PSSA to tell its members what to charge.
”We are advising our members to apply whatever [pricing model] they want,” Kotze said.
The MHS model or parts of it was just one option available. In December the Supreme Court of Appeals (SCA) declared the Health Department’s latest pricing regulations invalid following an application by a group of pharmacists.
The Health Department had asked the Constitutional Court for leave to appeal this and said that their action resuscitated the regulations.
The matter will be heard on March 15.
Legal experts, however, are divided on the matter. In terms of court rules an order of a High Court can be suspended pending an application to the SCA, an SCA judge explained to Sapa. However, there was no guidance on whether an order may
actually be suspended or remains in place when a matter is taken from the SCA to the Constitutional Court, as this had never happened before.
Both the Health Department and the pharmacists had their own interpretation of what the current legal position was.
Meanwhile, pharmacists across the country were selecting their own pricing structures with some using the new regulations, other using the old and others devising their own fees. – Sapa