[Ip-health] SA Drug Price Controls

[Sean Flynn]

Slash drug charges, firms told
Sydney Morning Herald, 17 Jan 2004

Johannesburg: South Africa will slash consumer drug prices by up to 70
per cent this year under draft regulations aimed at making medicine
affordable for millions of poor people.

The Health Minister, Manto Tshabalala-Msimang, said on Thursday that the
regulations, expected to come into effect in May, would require
manufacturers and importers to set drug prices at no more than 50 per
cent of listed prices.

"We are well aware that our primary goal of affordable medicine for all
is served through a healthy manufacturing, wholesale and retail
industry," Mrs Tshabalala-Msimang said.

"We have no wish to undermine this industry, only to make it fully
accountable to the interests of the consumer."

South Africa, which has the world's single highest HIV caseload with
about 5 million people infected, has taken an increasingly tough stance
on drug pricing, sparking concern from some pharmaceutical companies.

In October, the country's Competition Commission found the drug
multinationals GlaxoSmithKline and Boehringer Ingelheim guilty of
anti-competitive behaviour over the pricing of HIV drugs.

Mrs Tshabalala-Msimang said the new regulations would set a transparent
pricing system, eliminating rebates and incentive schemes by which
manufacturers in effect reduce drug prices for hospitals and pharmacy
groups, but which the Government says does not translate into benefits
for the consumer.

The new "single exit price", set at no more than 50 per cent of the list
price, will be published on the container of medicines, and pharmacists
and wholesalers will be strictly limited on the amount of additional
charges they can impose. Annual price rises will be capped.

Reuters