View Point Medicine pricing interventions – the South African experience

All countries face the challenge of finite health resources, and therefore the need to limit expenditure on medicines. Post-apartheid South Africa developed a National Drug Policy in 1996, which signaled a multi-faceted series of interventions to reduce medicines prices and also improve prescribing and dispensing practices. Implementing this policy has not been without challenges, including legal challenges by the pharmaceutical manufacturers, medical practitioners and pharmacists. While a policy of mandatory offer of generic substitution has been implemented successfully, improving the quality of medicines use in the private sector has not been as easily addressed. A single exit price mechanism for all medicines in the private sector has been introduced, with regulated maximal annual increases. However, the greatest difficulty has been encountered in determining a reasonable and enforceable dispensing fee. This element of the pricing intervention remains highly contested. South Africa’s experience has also highlighted the need for clear legal drafting when attempting medicine pricing interventions. Other elements which still need addressing are the selection of medicines in the private sector, an enforceable code of marketing practice, and a more transparent way of indicating which medicines can be substituted, based on suitable bioequivalence and other data. South Africa’s National Drug Policy is expected to be reviewed in the near future, and these issues will need urgent attention if the country is to realize its goal of introducing a National Health Insurance system