A comparison study between public and private healthcare sector medicine prices in South Africa.
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Date
2020
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Abstract
Introduction
The adoption of medicine pricing regulations was established to counter the on-going global
struggle of high medicine prices. South Africa’s healthcare is divided into the private and
public sector and each sector functions utilizing different medicine pricing systems i.e. the
tender and single exit price (SEP) system. The National Health Insurance (NHI), in its pilot
phase in SA, may declare new system changes and improvements. Therefore, increased data
on current medicine pricing systems are necessary particularly to assist the NHI process.
Aim
The overall aim of this study was to compare the medicine prices procured in the public
tender system with the private SEP system.
Objectives
The objectives of the study were to compare pricing trends, determine price differentials,
and equate the average price index of a basket of medicines between the public and private
healthcare sectors in South Africa.
Methods
A pricing list consisting of 32 essential medicines available in both the public and private
healthcare systems of South Africa was chosen for this study. The price of medicines for the
private sector were obtained from the Medicine Price Registry- Open Up website for the
period 2014–2018. Public sector medicine prices were obtained from the Department of
Health website for the corresponding period. Observations and pricing trends were identified
and analysed using Microsoft Excel version 2016.
Key Findings
A total of 74 medicine brands were analysed in the study. It was found that the prices across
both sectors had increased over time, however, the majority of brands (87%) displayed
higher prices in the private sector in comparison to the public sector. The price differential
between the private and public sector medicines yielded positive values with the median of 252.30%.
Conclusion
The study found vast price differences between each pricing system due to the different
methodologies practiced. Some of the methods and procedures utilized are known, however,
both systems lack complete transparency in the processes applied. Therefore, more
transparent medicine pricing systems need to be considered for the future of South Africa’s
healthcare system as the country transitions toward universal health coverage.
Description
Masters Degree. University of KwaZulu-Natal, Durban.