Consumers currently forking out hundreds, or in some cases thousands of rands, for chronic medication can expect to pay up to 20% less from the end of the month.

Pharmacists have agreed to adopt a similar system to Australia, whereby pharmacists will be selling prescription medicine to the consumer at the price they pay wholesale, while a professional fee will be charged on medicine, rather than a profit mark up.

Keith Johnson, outgoing president of the Pharmaceutical Society of South Africa (PSSA), warned, however, that clients could see cheaper prescription medicine for acute conditions “in the very lower market” going up by a maximum of between R5 and R10 in the short term.

“But we are expecting all prices to come down even before the Act comes into being, especially in the generics sector,” Johnson said.

The professional fee that will be piloted by pharmacists and a select group of medical schemes is R24,90 at this stage.

“Those pharmacists with older clientele who use the more expensive acute medication will be severely affected, but a pharmacist with younger clientele who use acute medication should be slightly better off,” Johnson said.

Johnson said the Medicines and Related Substances Control Amendment Act affected the pharmacists on various levels.

In the first instance, bonusing and business sampling will come to an end. There will be no more grey market activity, whereby pharmacists receive “freebie” samples that are then resold.

Perverse incentives, such as kickbacks, free trips and excessive gifts will also come to an end. Johnson said this practice had led to irrational prescribing in some cases as dispensaries tried to add up their points which could in turn see them being rewarded with an overseas trip.

Another provision in the Act requires of the pharmacist to advise patients of generic substitutes. Johnson said that even though a doctor may indicate that the medicine may not be substituted with a generic, the final decision lay with patient who was free to consult the pharmacist.

He said some medical schemes might opt to only pay for the cheapest option.

“We are going to see a huge increase in the use of generics. South Africa is trailing the rest of world in this area,” Johnson said.

In the United States, over 50% of medicine used is a generic version.

A third part of the Act deals with the professional fee, stipulating that no profit may be made by any dispenser on dispense medication.

The Act will also impact on the pharmacy industry when the health minister sets up the Pricing Committee.

Johnson said South Africa was likely to adopt a similar system to Australia whereby prices are referenced against a basket of international prices.

The committee then establishes a reference price and measures it against the prices being charged in the public and private sector.

Johnson pointed out that Section 15c of the Act was crucial to empowering the Pricing Committee.

“Without Section 15c the reference pricing means nothing. If the company refuses to bring its prices in line with the reference price, then a licence can be issued to parallel import the drug from another country.”
Implementation of the Medicines Act was delayed for three years after pharmaceutical companies challenged its legitimacy in court. They were especially concerned with Section 15c.

However, last month the companies withdrew their court bid, and in return the minister promised to include them in discussions on how the Act would be implemented.