Category Healthcare
SUB CATEGORIES General  |  HIV |  Medical Schemes | 

Medicine pricing

17 May 2004 Phillip Vosloo

While the new medicine pricing regulations may appear to have increased the financial burden for consumers and medical scheme members, the longer-term overall effect will be positive with a definite reduction in medicine prices.

Sizwe Mncwango, Managing Director of Old Mutual Healthcare, says the initial road to Government's implementation of medicine pricing regulations may appear a little bumpy, but the overall picture is not one of doom and gloom as has been painted to date by many.

He urges consumers to be patient, saying the present negatives should pale into insignificance once the benefits of reduced pricing take effect.

"With cheaper medicines available, the upshot is that members can expect their benefit limits to last longer. This would translate into a saving of between 2.5 and 5 percent of total contributions.  So medical scheme members can expect next benefit year's annual contribution increases to be lower than experienced in the past," he adds.

Most consumers and medical scheme members may perceive medicine prices to have increased rather than decreased in the last few weeks.  Many medical scheme members found prices higher than what their schemes were prepared to pay. 

"Prices appear higher than before because the regulations, that aim to set a single-exit price for medicines on which pharmacies may only add a dispensing fee, also scrapped all discounts and rebates.  Though the implementation of the single-exit price has been postponed until 2 June 2004, discounts are no longer allowed with effect from the beginning of this month."

OMHc believes the situation is stabilising with most schemes under its administration having agreed to pay a 36 percent mark-up on wholesale prices.  This interim agreement is viewed to be in the interests of both members and suppliers, while also being cost neutral to less expensive for the medical schemes.

"Care must be taken to ensure that certain medicines that are costly and not often used are not withdrawn because manufacturers find them financially less attractive.  Reduced access could also be a possibility if the goal of cheaper medicines is achieved at the expense of pharmacies closing down," he concludes.

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