Cape Town - In a victory for independent community pharmacies, moves have been made to have penalty co-payments declared an undesirable business practice.
The Competition Commission is also probing the practice of closed medical scheme pharmacy networks and penalty co-payments.
In a five-year battle, the Independent Community Pharmacy Association (ICPA) challenged the Council for Medical Schemes (CMS) to do away with closed Designated Service Providers (DSPs) and penalty co-payments, which they said used bullying tactics to force patients to specific corporate pharmacies or to use courier services and put South African community pharmacies under threat of widespread closure.
A DSP is an appointed health-care provider by a medical scheme to diagnose, treat or care for Prescribed Minimum Benefit conditions of their members. If people choose to get their chronic medicines from a provider outside their medical scheme DSP pharmacy network, they will be charged a penalty co-payment.
The ICPA says the CMS dismissed this and they lodged a subsequent appeal with the appeal board, which was successful this month. The CMS has now been forced to relook these practices.
CMS spokesperson Elsabe Conradie said community pharmacies were contracted to a number of schemes, and that the issue had not been dismissed when raised by the ICPA.
“Schemes are of the opinion that if no penalty co-payment is levied, there will be no incentive for members to use DSPs who are familiar with the formularies. If members do not use the DSPs, there will be no incentive for them to render services at reduced costs,” she said.
“The interests of members should be protected at all times and the CMS has not received any complaint from members regarding this issue.”
The CMS must now publish a notice of its intention to declare the penalty co-payment an undesirable business practice and allow interested people to submit written comments to it over 21 days, Conradie said.
Local independent pharmacies say it is a struggle to keep their businesses afloat while competing with larger pharmacies part of the closed DSPs.
Isgak Ismail, of the Reo Pharmacy in Elsies River and the regional ICPA chairperson, said up to 30 percent of a patient’s script value was levied at the point of service if they did not choose to use a DSP.
“In an area like Elsies River, the impact of a closed DSP is harsh. The clients are coerced into getting to a corporate pharmacy and they don’t have the means to do that.
“If they were to come to you (a local independent pharmacy), they are faced with being put out of pocket because of the penalty costs incurred. For families struggling to make ends meet, it is an added burden,” he said.
He said about 900 pharmacies had closed down countrywide since 2003. About 7 000 jobs were lost.
Mogologolo Phasha, chairperson of the ICPA , said: “We believe that DSPs should be open to all pharmacies and health-care providers to join on a willing provider arrangement.
“This will reduce out-of-pocket patient costs, improve adherence to medicines and improve patient care and outcomes.”
Competition Commission spokesperson Itumeleng Lesofe said these issues form part of the Private Healthcare Market Inquiry, which is under way.
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