Prices of medicines and scheduled substances will only be adjusted by a maximum of 4.53% in 2020, health minister Zweli Mkhize announced in a recent notice published in the Government Gazette, reports Business Day.
Medicine prices in the private sector are tightly controlled by the health department, which usually permits one increase a year on the ceiling price for each drug, known as the single exit price. The report says the capped prices mean companies cannot pass on increased input costs to consumers, and thus face a squeeze on their profits.
Mkhize said in the notice applications for adjustments of the single exit price may be submitted for the first time from 10 January and no later than 28 February.
The report says the Pharmaceutical Task Group (PTG) welcomed Mkhize’s announcement. “The timeous announcement is an important element in ensuring sustainability of supply by manufacturers, as in previous years the notice has been somewhat delayed, which placed some strain on pharma businesses as they had to absorb inflationary increases whilst waiting for the adjustment to kick in,” PTG chair Stavros Nicolau said. “The timeous implementation is also important from a planning perspective and enables the pharma businesses and funders to better plan for the adjustment.”Business Day report