Pharmacists suspend legal move on fees 
28 January 2009

Retail pharmacists have agreed to suspend their legal challenge to the government’s controversial fees for dispensed medicines, after a meeting with Health Minister Barbara Hogan on 26 January 2009. The development opens the way for the health department to devise a new fee structure and introduce a system that will see all consumers pay the same price for their medicines, regardless of where they shop. It also suggests that Hogan, unlike her predecessor Manto Tshabalala-Msimang, is attempting to negotiate a way out of the prolonged impasse with pharmacists rather than tie up her department’s resources in protracted litigation.

Retail pharmacists have been fighting the government over the size of their dispensing fees since January 2004, when the health department first published draft regulations setting limits on the markups they could charge on the medicines they sold. They launched legal action in mid-2004, after the health department tweaked its original proposal and set their fees at 26%, capped at R26, a level pharmacists argued was so low it rendered their businesses unviable. In September 2005 the Constitutional Court upheld the government’s right to regulate medicine prices, but ordered it to come up with a more appropriate fee structure.

A year later, the row was re-ignited after pharmacists rejected the government’s new fees, saying they would not cover their costs. Once again they took the department to court, and the matter was due to be heard on February 23.  The continued litigation meant the regulations governing pharmacists’ dispensing fees were suspended, theoretically leaving retail pharmacists free to charge whatever fees they deemed appropriate. However, since medical schemes have balked at high markups, pharmacists have tried to match their levies to those the large schemes are willing to pay.

The pharmacists’ face-to-face with Hogan is the first meeting they have managed to secure with a health minister since they launched legal action against the medicine pricing regulations in mid-2004. Numerous requests for a meeting with Tshabalala-Msimang or her staff were rejected, according to Ivan Kotzé, spokesman for the Pharmaceutical Stakeholders Forum, an umbrella body for pharmacy industry groups. “She (Hogan) is aware that if we do not find a resolution it will result in the further closure of pharmacies,” said Kotzé, estimating that several hundred pharmacies had been forced to shut up shop since the medicine pricing regulations were first flighted.

Earlier in January, Hogan met representatives from the National Convention on Dispensing, which represents doctors who provide medicines to their patients, to try to put an end to their legal challenge to the regulations governing the fees they may charge for dispensing drugs.

Tamar Kahn, www.businessday.co.za