An announced 2.88% increase in the single exit price (SEP) of medicines from 1 October will have a limited effect on patients but was crucial for sustaining medicine supply, says Pharmisa, while discussions between the government and industry continue over balancing patient access to treatment with the viability of the sector, reports Business Day.
The adjustment, the second this year, applies to prices recorded on the official medicines database as at 30 September regardless of how they were calculated earlier in the 2026 pricing cycle.
The increase follows a much smaller adjustment earlier this year. The pricing committee set the first 2026 SEP increase at 1.47%, compared with 5.25% in 2025. The first increase was also below consumer price inflation of 3.6%.
Pharmisa chairperson Stavros Nicolaou said the January increase was too low to absorb rising costs faced by manufacturers, and that the situation deteriorated further from March because of the Gulf oil crisis and disruption around the Strait of Hormuz, with some input costs rising 30% to 40%.
He said the higher costs had contributed to pressure on medicine supply, with shortages emerging in some cases, and in April, the Pharmaceutical Task Group had asked the Health Department for an additional 1.73 percentage points.
In August, when pharmaceutical industry representatives appeared before Parliament’s Health Portfolio committee. Nicolaou told MPs the sector was “in crisis”, with 2 500 local pharmaceutical manufacturing jobs lost over the preceding 18 months.
At an 18 August meeting between government and industry representatives, it was agreed that urgent challenges in the sector needed to be addressed, and the government committing to consider an extraordinary SEP adjustment in response to domestic and geopolitical pricing pressures.
The 2.88% adjustment means manufacturers and importers will have a higher permitted SEP, but manufacturers can apply permanent reductions to individual medicines where market conditions allow, meaning the full 2.88% increase will not necessarily apply to every product.
Nicolaou said the hike would have little effect on patients because it applies for only three months of 2026. The industry calculates that the effective increase for the full year will be about 2.19%, below inflation and the 3.2% to 3.3% increase budgeted for by medical schemes.
Business Day article – Medicine prices rise 2.88% as industry warns of shortages (Restricted access)
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