How does the health minister review the cost of medicine?

Government has invited the public to share their views on the affordability of medication in South Africa for 2020.

The National Department of Health says a “fair price” is currently defined as one that is affordable for health systems and patients and at the same time provides sufficient market incentive for industry to invest in innovation and the production of medicines.

Deputy Director General of National Health Insurance, Dr Anban Pillay explains.

Each year the minister has to review what would be the price adjustment on that medicine, so no company can increase their price beyond whatever the minister determines to be a reasonable price increase.

Dr Anban Pillay, Deputy director general - National Health Insurance

The price increases will fluctuate and have been seven or nine percent over the years. Last year was three percent so, depending on what the exchange rate does - it influences to a large extent what the adjustment is going to be.

Dr Anban Pillay, Deputy director general - National Health Insurance

Pillay says the annual review also takes into account the Consumer Price Index (CPI).

But the pharmaceutical industry is not happy with the fluctuations caused by the exchange rate and wants the Ministry to use the CPI alone as its barometer.

We have put it out there as to these are the options that we could use for price adjustments - and we would like South Africans to share their views on what would be reasonable so that the minister can make a final determination, to calculate the price increase for 2020.

Dr Anban Pillay, Deputy director general - National Health Insurance

Everyone - every member of the public, the pharmaceutical industry, medical schemes... we encourage as many people (as possible) to provide input and share their views.

Dr Anban Pillay, Deputy director general - National Health Insurance

Click on the link below to hear more from Pillay:


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