SA’s Department of Health has launched a new salvo in its fight to lower medicine prices, and has instructed multinational drug firms that make patented medicines to disclose their prices in other countries. Business Day reports that the aim is to use the information to put pressure on drug companies to drop their prices in cases where SA is paying more than consumers in other parts of the world. It is the first concrete step towards implementing a mandatory international benchmarking system.
The move has caught companies on the back foot as it appears no hint of it had been given in prior discussions. The department said that if companies were selling patented medicines in SA at much higher prices than elsewhere, it would ask them to forego this year’s price increases.
Deputy director-general for health regulation and compliance Anban Pillay said the department would not legally be able to stop such companies from going ahead with this year's price increases, but if they did the health minister would declare such prices unreasonably high. This would effectively "name and shame" drug firms the department believed were charging too much. He doubted there was a company "brave enough" to weather the storm of public disapproval such a move would precipitate, Pillay said.
The directive is contained in a government gazette notice, which announces this year's maximum permitted price increase for private-sector medicine sales.
[link url="http://www.bdlive.co.za/business/healthcare/2015/02/06/sa-to-press-drug-firms-to-lower-their-prices"]Full Business Day report[/link]