Johannesburg - Pharmacies belonging to listed companies have welcomed the truce reached between the Pharmaceutical Society of SA (PSSA) and government in a protracted four-year battle over the regulation of dispensing fees.
The regulations, which limit the amount of money pharmacies can charge customer for dispensing medicines has forced many pharmacies out of business.
On Monday, the PSSA decided to drop legal action against government over the fees following a meeting with newly appointed health minister, Barbara Hogan.
Quoted by Business Report, Ivan Kotzé, a spokesperson for the Pharmacy Stakeholders' Forum, said pharmacies were "positive that a more generous dispensing fee regime for pharmacists would be reached, allowing for the continuation of a sustainable independent pharmacy sector".
The original regulations,introduced in 2004 by controversial former Health Minister, Manto Tshabalala-Msimang, limited the dispensing fee pharmacies could charge on drugs to 26%, and this was capped at a maximum of R26. If drugs were sold for more than R100, the pharmacy would lose out as its mark-ups would be limited.
"We welcome this development," said Pick n Pay's head of pharmacies, Hippo Zourides.
Zourides told Fin24.com that if this were to happen, this would assist Pick n Pay in expanding its pharmacy network as it would be in line with its operating ethos to provide accessible, affordable healthcare.
"Firstly, it would make the dispensary more viable and we could create more jobs for healthcare professionals who now have a career path up to retirement age. Secondly, the better viability results marginal sites (that previously were put on hold) being opened, increasing accessibility for patients."
Zourides said this would also make independent community pharmacies more viable.
If all went to plan, Pick n Pay would consider a franchise model for its pharmacies he said.
JSE-listed New Clicks, which has aggressively rolled out pharmacies throughout its Clicks store network, has stuck with government's regulations, but supports a maximum dispensing fee, according to Business Report. The newspaper quoted New Clicks CEO, David Kneale as saying: "[The fee] gives us the freedom to discount, which we will probably do."
He told the paper it would be likely that all parties would reach an out-of-court settlement on dispensing fees.
In New Clicks' annual report, Kneale wrote: "Regulatory uncertainty continues to prevail in the retail and wholesale pharmaceutical markets. Four years after the department of health proposed a dispensing fee for retail pharmacy there is still no regulated fee and this needs to be finalised to bring much-needed stability to the pharmacy profession in our country."
Retail pharmacies launched legal action against government in mid-2004, Business Day said on Monday.
In September 2005 the Constitutional Court upheld the government's right to regulate medicine prices, but ordered it to come up with a more appropriate fee structure, it said, adding that a year later, the row was re-ignited after pharmacists rejected the government's new fees, saying they would not cover their costs.
This resulted in the pharmacies taking further legal action which was due in the Pretoria High Court on February 23 to 25 - but this was postponed as a result of Hogan's efforts to find a solution.
Earlier this month, Hogan reached an out-of-court settlement with the National Convention on Dispensing by agreeing in principle that the dispensing fee for doctors should be raised to 30%.
- Fin24.com