For two days next week, the battle over drugs pricing will move to the Constitutional Court as Minister of Health Manto Tshabalala-Msimang takes on pharmacy groups.
The Health Department will ask the country’s highest court for permission to appeal in a bid to overturn a Supreme Court of Appeal (SCA) judgement, which threw out ”transparent pricing” regulations last year.
The regulations were originally challenged in the Cape High Court by New Clicks and the Pharmaceutical Society of South Africa. They were upheld in a split decision, with Judge President John Hlophe and Judge James Yekiso finding for the department, and Deputy Judge President Jeanette Traverso dissenting.
The SCA threw them out following an unusual, and hugely controversial appeals process, after Judge Hlophe took five weeks to decide on leave to appeal, and then declined it.
The government believes the regulations give legal effect to the constitutional right to affordable medicine, and the industry argues that capping dispensing fees at R26 endangers the future of pharmacies and will limit access to drugs.
The Treatment Action Campaign, which is appearing as a friend of the court, is arguing that while the regulations were ill-considered, the ”transparent pricing” law on which they are based is sound.
The case will not only test the constitutionality of the regulations, however. Many believe it will be a turning point in the debate over the relationship between the judicial and executive branches of the state.
Attention has been focused on the case not just because of controversy over the R26 cap, but because its initial passage through the Cape High Court last year sparked Judge Hlophe’s allegations of racism in the division.
The race row has since culminated in his 43-page report blaming senior advocates and judges for ”pervasive racism”. Jeremy Gauntlett, the advocate representing New Clicks in the case, and Judge Traverso were among those he named.
Appeal court Judge Louis Harms was scathing about numerous aspects of the original judgement and hinted that there had been collusion between the state and the Cape court in an attempt to ensure that no appeal was heard by the SCA.
That may have been a factor in the African National Congress’s January 8 statement suggesting that ”the collective mindset” of judges was dangerously out of tune with the aspirations of ”the masses”.
At an ANC national executive committee meeting ahead of the statement, Tshabalala-Msimang was prominent among a group who pushed for more action on the transformation of the judiciary. She seemed outraged by what she saw as judicial interference in the executive’s policy-making powers.
Legal commentators said argument would relate primarily to whether the SCA had had jurisdiction to consider the matter. But there would inevitably be a racial dynamic given that Judge Hlope had ruled in favour of the regulations, while Judge Harms, whose inquiry into third force activities famously failed to finger the nationalist government for involvement, struck them down.
”All the [constitutional] judges pride themselves on being fearlessly independent. They cannot ignore the politics but it will not mar the judgement on this issue,” said one senior legal figure.
The three arguments
Pharmaceutical Society of South Africa
- The health department should not be granted leave to appeal as the regulations are ”fatally defective”.
- The department should have argued the merits of the case in the Supreme Court of Appeal (SCA); there was no rational explanation for its refusal; the department deliberately treated the SCA with contempt.
- The medicine pricing regulations ”are likely to lead to widespread losses and the closure of numerous pharmacies” in all sectors of the pharmacy profession.
- Rationale for the law should be for transparency and consistency in medicine price-setting; not direct price control.
- The dispensing fee was decided in an arbitrary and haphazard manner.
Department of Health
- The SCA had no jurisdiction to grant leave to appeal and ”erred in entertaining the applications”.
- The SCA unlawfully interfered with the discretion of the high court to grant or refuse the applications for leave to appeal that were pending before it. The SCA should not have heard the case as a matter of urgency.
- The pricing regulations give effect to the right of access to health-care services that is guaranteed in Section 27(1) of the Constitution and prohibiting them denies this right.
- Alternatively, and in the event of the court not upholding the appeal, the department will request that the order of invalidity be suspended for six months so that the department can attend to the matter.
Treatment Action Campaign
- The medicine pricing regulations are a necessary tool available to the state to make medicines affordable.
- The dispensing fee was not ”appropriate” and could threaten the sustainability of pharmacies and the equitable provision of pharmaceutical services for all communities, limiting the constitutional rights of pharmacists and consumers of pharmaceutical services.
- If the court dismisses the appeal, the invalidity of the regulations should be suspended for 12 months. The Health Department should be ordered to submit an interim agreement for appropriate dispensing fees regulations within a month and lodge it with the court. After two months, the department should submit an affidavit on how the defects in the pricing regulations can be remedied.
Compiled by Nawaal Deane