2020 medicine price increases capped

Prices of medicines and scheduled substances will only be adjusted by a maximum of 4.53% in 2020, health minister Zweli Mkhize announced in a notice published in the government gazette last week.

Medicine prices in the private sector are tightly controlled by the health department, which usually permits one increase a year on the ceiling price for each drug, known as the single-exit price. The capped prices mean companies cannot pass on increased input costs to consumers, and thus face a squeeze on their profits.

Mkhize said in the notice that applications for adjustments of the single-exit price could be submitted for the first time from January 10 to no later than February 28.

He has previously called for cheaper medicines, saying “a win-win scenario is to embrace a partnership between the developed north and the developing south to innovate and manufacture products for our needs at a price that can be afforded by Africans”.

Long-term patents, which, for the most part, prohibit generic medicines, have been the driving factor keeping the cost of medicines far above the financial reach of many, Mkhize said in August.

“As we prepare for National Health Insurance (NHI), we find ourselves in the serendipitous position of coinciding with the ‘patent cliff’. As patents expire, here we find ourselves with an excellent opportunity to introduce policies that encourage prevalence of generics in the pharmaceutical market and also open up competition in the sector.” 

The Pharmaceutical Task Group (PTG) welcomed Mkhize's announcement.

“The timeous announcement is an important element in ensuring sustainability of supply by manufacturers, as in previous years the notice has been somewhat delayed, which placed some strain on pharma businesses as they had to absorb inflationary increases whilst waiting for the adjustment to kick in,” PTG chair Stavros Nicolau said. 

“The timeous implementation is also important from a planning perspective and enables the pharma businesses and funders to better plan for the adjustment.”