It has been 10 years of profits as usual for the pharmaceutical industry. But last week’s judgement in the Constitutional Court may finally have breathed life into the Medicines and Related Substances Control Act, giving consumers some hope of relief from high prices.
A decade after the Department of Health began designing legislation to force medicine prices down, the court finally cleared the way for the implementation of the Act. This is a huge step forward for the government.
Various vested interests have done their damnedest to thwart the legislation, which in part was introduced to prevent multinational pharmaceutical companies plying doctors with inducements to buy their products and prescribe them, at high cost, with brand names.
Many of the 6 000 dispensing doctors used aspects of the largely immoral system of discounts, rebates, gifts, bonusing and sampling, as the practices became known, to add large margins, calculated in percentages, to already pricey drugs that often cost doctors very little. Frequently, patients were dispensed what suited the doctors’ pockets and not what suited the patients’ real needs.
The distribution chain to other retail outlets, like pharmacies, was peppered with percentage margins added on to discounted prices and calculated all the way along a complex and sometimes valueless chain. Ultimately, the medicines hit private health care consumers with astonishing force — in the pocket.
Generic medicines — cheaper copies of drugs out of patent — were seldom prescribed, as the margins did not serve the interests of dispensers. Brand-name drugs were shoved down consumers’ throats, as if such large companies needed to depend on this tiny market for survival.
At the same time, medical schemes played a less than useful role, with extra margins for some administration firms in the difference between members’ medicine benefits and the discounted prices offered to pharmaceutical benefit management companies.
The remedy was sought through the Medicines Act, which would stop the “profits” made on dispensing by setting up a dispensing fee on medicines; separating the prescribing and dispensing functions (which upset dispensing doctors); encouraging the prescribing and dispensing of generic medicines partly by mandatory means, partly by ending the incentives for prescribing only expensive drugs; setting up a single exit price from factories without discounts and marketing devices (which upset the pharmaceutical companies); ensuring that parallel importing could happen when necessary, along with international benchmarking (all the subject of ugly disputes with Big Pharma); and instituting a pricing committee to see that the prices determined were rational.
Fees along the way would be either flat or capped, so that percentage margins could not reach the dizzy heights of the previous era.
The contests began almost immediately the first drafts left the drawing board — and by sending back the dispensing fee for renegotiation the Constitutional Court has ordered the last hurdle to be crossed. With a bit of luck and some determination, the fee will be set by December.
The court finally saw to it that a well-intentioned piece of law designed to help consumers would see the light of day.
Pat Sidley is the head of communications at the Council for Medical Schemes