Picture: Steve Buissinne/Pixabay
Picture: Steve Buissinne/Pixabay

SA pharma costs are too high, says NPC

By Zintle Mahlati Time of article published Jan 29, 2021

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Joburg – THE cost of pharmaceutical products has come into sharp focus in the health industry as the Covid-19 pandemic has highlighted the need for affordable health care.

The National Planning Commission (NPC) says there needs to be a bigger push to achieve the broader goal of affordable health care in the country.

The commission had previously commissioned a report into pharmaceutical costs in the country.

The report, which was released last year, showed that there were large price differences between medicine costs in the private and public sector.

As of 2019, pharmaceutical expenditure was estimated at R55 billion. A total of 30% of that expenditure was in the public sector.

The report also deals with issues of international benchmarking on medicine prices with some medications, such as cardiac drugs, priced quite high in the country compared to other countries.

It was also found that there were large issues with the dispensing fee system which often left room for overpricing of cheaper drugs – and as a result, blocking access for the poor.

Another glaring issue was the size of out of pocket expenditure – which made up 19% for the private sector in 2019.

The NPC believes out of pocket expenses often lead to households spending a larger share of their income on pharmaceutical medicines.

The commission held a webinar with NGOs, researchers and commissioners about solving the pricing issues in the country.

Section 27 executive director Umunyana Rugege said there is an urgent need for the finalisation of intellectual property reforms which have yet to be changed.

She said to ensure a more access based pharmaceutical industry, there needs to be a focus on local manufacturing investment. This would also help secure the industry, Rugege said.

Professor Glenda Gray, president of the Medical Research Council, said South Africa has a drug discovery platform that needs to be leveraged.

She said the Covid-19 pandemic had shown that the country needs to build vaccine development capacity – so we are able to build vaccines from scratch instead of being only assembly points.

Commissioner Dr Ntuthuko Bhengu said as part of the recommendations to the Department of Health based on pricing issues observed by the commission, there were various areas the Health Department had to focus on.

Bhengu said out of pocket expenditure was worrying because it was an area which was not tracked.

He said the department should look at strengthening the powers of the pricing committee to allow them to negotiate and interrogate prices of the originator and generic drugs with manufacturers.

He also said another recommendation was to strengthen the disclosure obligations of manufacturers to provide details on costs and volume.

An impact assessment should be conducted on regulations related to dispensing fees to understand the regressive nature and how these impact the affordability of medicines.

The report was sent to Cabinet.

Political Bureau

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