Proposed fees bode ill for drug prices

Consumers will have to pay an extra R2 billion a year for medication if the Medicines and Related Substances Amendment Bill, published in the Government Gazette in July, is accepted.

The proposed amendment to pharmacists’ dispensing tariffs is likely to push up the average fee from R18 to an estimated R49, raising medicine prices by an average 23%.

Jan Howell, a consulting actuary at Old Mutual Actuaries and Consultants, said this could ­significantly increase claims against medical funds.

Pharmacists’ current dispensing fees are low. Guidelines ­stipulate that pharmacies may earn 26% to a maximum of R26 on drugs.

The amendments contain four dispensing fee formulas that can be added to the single exit price for Schedule 1 drugs and higher.

The single exit price is the pharmacist’s purchase price for drugs, and the dispensing fee is the levy the pharmacist can charge for business costs and professional expertise.

Discovery Health CEO Jonathan Broomberg said the scheme was still analysing the implications of the proposed tariffs.

However, provisional indications were that they could have a significant effect on the cost of medicines for both medical scheme members and those who pay for prescriptions from their own pockets.

It is reckoned that the new ­tariff structure dispensation would increase medical schemes’ costs by R2 billion.

Howell believed it would ­increase the claims burden on funds with many older ­members, who generate a large proportion of claims.

Ivan Kotzé, the executive ­director of the Pharmaceutical Society of South Africa (PSSA), previously said the society was satisfied with the proposals.

These tariffs contained no fat, but it was important for the ­average fee of R38 (the PSSA’s preferred minimum average) to be reached.

Interest groups have until ­August 22 to comment on the new tariffs.

– Sake24.com