1. PRESENTATION TO PORTFOLIO COMMITTEE ON HEALTH PRICING REGULATIONS Presented by: Amos Masango, Acting Registrar South African Pharmacy Council 16 November 2004

2. OVERVIEW OF POLICIES AND LEGISLATION Ü White Paper on the Transformation of the Health Care System (1997) Ü National Drug Policy (1996) Ü Legislative changes Ÿ Pharmacy Act 53 of 1974 amended in 1997 and 2000 Ÿ Health Professions Act 56 of 1974 amended in 1997 Ÿ Nursing Bill 2003 Ü White Paper on the Transformation of the Health Care System (1997) Ü National Drug Policy (1996) Ü Legislative changes Ÿ Pharmacy Act 53 of 1974 amended in 1997 and 2000 Ÿ Health Professions Act 56 of 1974 amended in 1997 Ÿ Nursing Bill 2003

3. OVERVIEW OF POLICIES AND LEGISLATION Ü Medicines and Related Substances Act 101 of 1965 amended by Act 90 of 1997 and Act 59 of 2002 Ü National Health Act 61 of 2003 Ü Medical Schemes Act, 1998 – preferred provider arrangements Other important national and provincial policies Ü Norms and standards for pharmaceutical services Ü District hospital service package Ü Comprehensive PHC service package Ü Plan for comprehensive treatment of HIV and AIDS Ü Proposals for Social Health Insurance Ü Hospital Revitalisation Programme Ü Medicines and Related Substances Act 101 of 1965 amended by Act 90 of 1997 and Act 59 of 2002 Ü National Health Act 61 of 2003 Ü Medical Schemes Act, 1998 – preferred provider arrangements Other important national and provincial policies Ü Norms and standards for pharmaceutical services Ü District hospital service package Ü Comprehensive PHC service package Ü Plan for comprehensive treatment of HIV and AIDS Ü Proposals for Social Health Insurance Ü Hospital Revitalisation Programme

4. NATIONAL DRUG POLICY Specific Objectives Ü Health objectives Ÿ to ensure the availability & accessibility of essential drugs to all citizens Ÿ to ensure good dispensing & prescribing practices Specific Objectives Ü Health objectives Ÿ to ensure the availability & accessibility of essential drugs to all citizens Ÿ to ensure good dispensing & prescribing practices

5. NATIONAL DRUG POLICY Specific Objectives Ü Economic objectives Ÿ to lower the cost of drugs in both the private and public sectors Ÿ to promote cost-effective & rational drug use Specific Objectives Ü Economic objectives Ÿ to lower the cost of drugs in both the private and public sectors Ÿ to promote cost-effective & rational drug use

6. PRICING REGULATIONS Patient Department Of Health Department Of Health South African Pharmacy Council South African Pharmacy Council Pharmacist Medicine Rules - Section 35A Pharmacy Act, 1974 Pricing Regulations Medicine Act, 1965

7. PRICING REGULATIONS Ü Transparency Ü Affordability Ü Accessibility Ü Transparency Ü Affordability Ü Accessibility

8. Ü To give guidance to the profession Ü To give guidance to the public Ü To give guidance to medical schemes as to which services a pharmacist may levy for Ü Uniformity Ü To give guidance to the profession Ü To give guidance to the public Ü To give guidance to medical schemes as to which services a pharmacist may levy for Ü Uniformity INTENTION OF SAPC WITH REGARD TO PROFESSIONAL TARIFFS

9. PRICING OF MEDICINE PRIOR TO MAY 2004 Ü Cost of product plus 50% markup Ü 50% included profit plus services Ü Pharmacists were buying at discount or bonus prices Ü 50% plus bonuses included the so-called free service Ü Cost of product plus 50% markup Ü 50% included profit plus services Ü Pharmacists were buying at discount or bonus prices Ü 50% plus bonuses included the so-called free service

10. POST MAY 2004 Ü Pricing regulations come into effect Ü Pharmacists were given three months to implement the dispensing fee, i.e. 26/26 or 16/16 Ü Medicines prices went down Ü No discount or bonus on the product for pharmacist or patient Ü Pharmacists were charging SEP plus 36% Ü on 2 August 2004 after the Court ruling the Pricing regulations come into effect for community sector Ü Pricing regulations come into effect Ü Pharmacists were given three months to implement the dispensing fee, i.e. 26/26 or 16/16 Ü Medicines prices went down Ü No discount or bonus on the product for pharmacist or patient Ü Pharmacists were charging SEP plus 36% Ü on 2 August 2004 after the Court ruling the Pricing regulations come into effect for community sector

11. POST AUGUST 2004 Ü SEP plus 26/26 or 16/16 dispensing fees Ü Admin fees come into effect as a result of implementation of the dispensing fees Ü The admin fees seem to be arbitrary and excessive in some instances Ü Outcry from both the profession and the public Ü Patients feel they pay more than they used to pay before pricing regulations Ü Pharmacists feel there is no viability for the community sector Ü PSSA and other groups apply for leave to appeal to the High Court Ü Judgement on the matter reserved Ü SEP plus 26/26 or 16/16 dispensing fees Ü Admin fees come into effect as a result of implementation of the dispensing fees Ü The admin fees seem to be arbitrary and excessive in some instances Ü Outcry from both the profession and the public Ü Patients feel they pay more than they used to pay before pricing regulations Ü Pharmacists feel there is no viability for the community sector Ü PSSA and other groups apply for leave to appeal to the High Court Ü Judgement on the matter reserved

12. 15 OCTOBER 2004 Ü On 13 October 2004 Council resolves that the Rules be published as matter extreme urgency Ü Council was responding to its mandate to protect the public and giving guidance to the profession Ü Council’s intention was to apply uniformity so that the public may know exactly what they are paying for when entering a community pharmacy Ü Council embarked on a process of consulting with all stakeholders involved in the Court case with an aim to mediate on the dispensing fees Ü On 13 October 2004 Council resolves that the Rules be published as matter extreme urgency Ü Council was responding to its mandate to protect the public and giving guidance to the profession Ü Council’s intention was to apply uniformity so that the public may know exactly what they are paying for when entering a community pharmacy Ü Council embarked on a process of consulting with all stakeholders involved in the Court case with an aim to mediate on the dispensing fees

13. 25 OCTOBER 2004 Ü Council resolves that the rules be withdrawn with immediate effect as a result of an implementation problem Ü Task Team is elected to review Rules and tie up loose ends Ü The office of the Registrar is receiving complaints on the charging of admin fees Ü The profession is advised to itemise all fees that are levied to patients and fully explain to patients what the fees are for Ü On 8 November 2004 the first meeting between the PSSA and New Clicks group takes place Ü The dates for the meeting with other stakeholders are set Ü Council resolves that the rules be withdrawn with immediate effect as a result of an implementation problem Ü Task Team is elected to review Rules and tie up loose ends Ü The office of the Registrar is receiving complaints on the charging of admin fees Ü The profession is advised to itemise all fees that are levied to patients and fully explain to patients what the fees are for Ü On 8 November 2004 the first meeting between the PSSA and New Clicks group takes place Ü The dates for the meeting with other stakeholders are set

14. WHO IS BENEFITING FROM THE IMPLEMENTATION OF THE PRICING REGULATIONS? Ü Medical Schemes? Ü Manufacturers? Ü Patients? Ü Distributors/Wholesalers? Ü Pharmacists? Ü Doctors? Ü Medical Schemes? Ü Manufacturers? Ü Patients? Ü Distributors/Wholesalers? Ü Pharmacists? Ü Doctors?

15. WAY FORWARD Ü SAPC to re-publish the Rules Ü SAPC to mediate on the dispute regarding the dispensing fee Ü SAPC to re-publish the Rules Ü SAPC to mediate on the dispute regarding the dispensing fee