After a major meeting last week with various pharmaceutical bodies, including the Pharmaceutical Task Group (PTG), the government has committed to considering an “extraordinary” single-exit price (SEP) hike to reflect the impact of “domestic and geopolitical pricing pressures” – among a raft of other positive indications, reports News24.
The SEP is the maximum price a manufacturer can charge for a medicine, which the Health Department had pegged at a maximum adjustment of no more than 1.47% for 2026, down from 5.25% the previous year.
However, the Middle East conflict has been the catalyst for huge rises in fuel and logistics costs, with consumer inflation hitting 5% in June this year.
The department has now promised to re-examine the SEP, and in a joint statement with the PTG (representing 80% of SA’s pharmaceutical business), said it had agreed to a “structured, institutionalised engagement mechanism” to track progress while engaging on a host of challenges.
This includes a “fair, transparent and predictable” mechanism for adjusting SEP, including a joint review of regulations; continued strengthening of SAHPRA; capital investment support and encouraging more investment in local manufacturing capacity; transparent public sector procurement rules supporting localisation and reliable medicine suppliers; and allowing for better long-term planning and potentially longer-term contracts.
It would also explore reimbursement models to boost the affordability of selected medicines; to cut unnecessary red tape and slash the cost of doing business; and a broader package of “appropriate incentives to sustain existing capacity and attract new investment, while strengthening local production”.
News24 article – Govt mulls ‘extraordinary’ hike to medicine price cap (Restricted access)
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