AN UPDATE ON THE TRANSPARENT PRICING SYSTEM FOR MEDICINES AND SCHEDULED SUBSTANCES
The current exemption of veterinary medicines for a period of one year from the pricing regulations would in all probability become permanent, which would in effect mean that there would be no prescribed dispensing fees for veterinary medicines.
25 JANUARY 2005
The South African Veterinary Councils’ Comments
The Regulations relating to a transparent pricing system for Medicines and Scheduled Substances made in terms of section 22G of the Medicines and Related Substances Act, No 101 of 1965
1. Section 22G of Act 101 of 1965 enables the Minister to make regulations, on recommendation of a pricing committee, inter alia: -
on the introduction of a transparent pricing system for all medicines and Scheduled substances sold in the Republic; and
on an appropriate dispensing fee to be charged by a pharmacist or by a person licensed in terms of section 22C(1)(a).
1.1 As the section is silent on an appropriate dispensing fee to be charged by a veterinarian the regulations do not make provision for such a dispensing fee by a veterinarian. Provision is only made for pharmacists (regulation 10) and persons licensed in terms of section 22C(1)(a) (regulation 11).
1.2 However, veterinarians are entitled to sell and dispense medicines and scheduled substances in terms of Act 101 of 1965. This right is limited by the Veterinary and Para-Veterinary Professions Act, No 19 of 1982 for use in the treatment of animals.
1.3 In terms of Section 22A of Act 101 of 1965 a veterinarian who may prescribe, compound or dispense, may sell Schedule 1 – 6 substances.
1.4 In terms of Section 34 of the Veterinary and Para-Veterinary Professions Act, No 19 of 1982, a person who is registered to practice a veterinary profession may compound and dispense any medicine prescribed by him/herself for use in the treatment of an animal, which is under his/her professional care.
1.5 In terms of Section 22C(5) of Act 101 of 1965 no person shall compound or dispense a medicine unless s/he is authorised thereto in terms of the Pharmacy Act, 1974, is a veterinarian, or is the holder of a licence as contemplated in subsection (1)(a).
2. Council believes that the reason for omitting reference to a veterinarian in section 22G of Act 101 of 1965 was because a transparent pricing system for medicines and scheduled substances was limited to medicines intended for use in humans and not in animals.
2.1 Although the definition of medicines in Act 101 of 1965 includes reference to veterinary medicine, veterinary medicine is also separately defined in Act 101 of 1965 as "any substance or mixture of substances, other than a stock remedy or farm feed to be registered in terms of the Fertilizers, Farm Feeds, Agricultural Remedies and Stock Remedies Act, No 36 of 1947, used or purporting to be suitable for use or manufactured or sold for use in connection with vertebrates…"
2.2 The majority of veterinary medicines are registered in terms of Act 36 of 1947 (approximately 1200) as opposed to those registered in terms of Act 101 of 1965 (approximately 800).
2.3 If it were the intention to include a transparent pricing system for all medicines including veterinary medicines, veterinary medicines registered in terms of the Fertilizers, Farm Feeds, Agricultural Remedies and Stock Remedies Act, No 36 of 1947, would also have been addressed.
3. Human medicine and veterinary medicine cannot be equated and the draft regulations do not make any reference to veterinary medicine. The Council does not believe that it could have been the intention of the pricing committee to treat human and veterinary medicine equal.
3.1 The research and development costs of medicines intended for use in animals, in particular production animals, is much higher than that of medicines intended for use in man as the safety and efficacy must take into account not only the safety of the animal but also of the consumer of the products of the animals;
3.2 On the other hand, as a result of the relative low value of the animals, (end-user of veterinary medicine) prices for veterinary medicines are much lower than that for humans. This relative value of the animal suppresses the price of veterinary medicines significantly when compared to the human pharmaceutical market and in itself has controlled the price of veterinary medicines in the veterinary market;
3.3 Another factor, which impacts the pricing of veterinary medicine, is the very limited availability and use of veterinary medical insurance and limited state institutions that render clinical veterinary services and dispense veterinary medicine;
3.4 Registered veterinary medicines form a fraction of the industry when compared to the human pharmaceutical counterpart and the same market forces do not apply;
3.5 The number of registered veterinary facilities wherefrom veterinary medicines are dispensed is a fraction of the human pharmaceutical counterpart;
3.6 The mark up of human and veterinary medicines are not the same for the reasons stated above, and the net result of applying the same principles could ultimately lead to the bankrupting of the veterinary industry, with the concomitant loss of international investment and/or participation in the veterinary pharmaceutical industry, thus depriving the country of essential veterinary medicines;
3.7 Regulation 5 effectively sets the manufacturer net price (MNP) as listed in the Blue Book, as the reference point for the single exit price. However, very few veterinary medicines are listed in this publication and as such the proposal cannot apply to veterinary medicines. Furthermore there is no other common documentation containing the MNP of all veterinary medicines;
3.4 A single exit unit price does not make provision for the fact that the majority of veterinary medicines are sold in " multidose" or "multiple animal" presentations as it is typical to treat a number of animals (herd/flock) as opposed to a single end user.
4. If it were the intention that a transparent pricing system for medicines and scheduled substances is to include veterinary medicine then the regulations do not address the position of veterinarians at all.
5. The Council proposes that the regulations define medicine as to exclude veterinary medicine.
6. In the alternative, should it be the intention to include veterinary medicine then:
6.1 Section 22G is to be amended to include reference to veterinarians;
6.2 There should be adequate representation by relevant role-players from the veterinary industry on the pricing committee;
6.3 Cognisance should be taken of the veterinary medicines registered in terms of the Fertilizers, Farm Feeds, Agricultural Remedies and Stock Remedies Act, No 36 of 1947;
6.4 Regulations should be drafted that takes into account the market forces at play in the veterinary medicine industry; and
6.5 The de facto dispensing practice of veterinarians.
THE REGULATIONS CAN BE VIEWED ON THE WEBSITE AT
www.mccza.com or www.doh.gov.za
PLEASE ADDRESS YOUR COMMENTS DIRECTLY TO
DR H ZOKUFA AT FAX: (012) 312 3103
DEPARTMENT OF HEALTH
BEFORE 16 APRIL 2004