Evaluating the impact of the change in regulations related to medicine pricing and pharmacy ownership in the private pharmaceutical sector of South Africa.

Abstract

One of the imperatives of the post-1994 government was to improve access to medicines and related pharmaceutical services to previously disadvantaged areas. The government implemented multiple strategies to achieve this goal. The first was to ensure the availability of quality affordable medicines to all its citizens. In the public sector, the government controlled the purchases through a tender system and ensured the availability and affordability of medicines to the majority of the population free at the point of service. In 2004 the government introduced the Single Exit Price (SEP), a transparent pricing system in the private sector for all prescription medicines comprising of a fixed exfactory price with a logistics fee component (and value-added tax) for medicines sold to all purchasers other than the State. This study presents two papers that evaluated a basket of 50 originator medicines and its available generics using the WHO/HAI methodology. Data were obtained from community pharmacy and pharmacy software vendors and subjected to an Interrupted Time Series (ITS) evaluation, where the changes in slope and levels of the medicines before and after regulations were obtained. A second strategy was to look at opening up ownership of pharmacies with the goal of improving access to medicines and services. On 23 October 1997, Minister Zuma introduced the amendment to the Pharmacy Bill that intended removing the restriction that ‘only people registered as pharmacists may own a pharmacy.’ The objective of the open ownership policy change was to increase public access to pharmaceutical services by increasing the number of pharmacies, especially in outlying areas. This amendment came into effect in 2003. While no extensive studies have been performed in South Africa to examine this change in ownership impact, research has suggested that open ownership has contributed to the demise of community pharmacy in rural areas (Blignault, 2010; Lowe, 2009). However, a comprehensive longitudinal evaluation has not been undertaken to date. It is unclear whether South Africa benefited from this policy or repeated the same mistakes as other countries, that have deregulated ownership, have demonstrated.

The third paper examines the opening, transfer, and closing of all pharmaceutical licenses as per the South African Pharmacy Council register prior to the changes in regulation and postregulations up to 2014. Each license was tracked over time and mapped at a municipal and district level. The investigation further allowed for a population overlay to determine changes in access, ownership categories, and urban-rural access over time, and in this way, examined the impact of the change in policy and whether its intended outcomes were achieved. It addressed the gap in research and evidence in terms of the policy on the deregulation of pharmacy ownership. The research contributed to lessons for low- and middle-income (LMIC) countries, especially those on the African continent. Conclusions: Using interrupted time series methodology, the research confirmed that substantial price reductions were achieved through the Single Exit Price regulations. This was true in both the originator and generic medicine where possible savings were experienced in the private sector. While the liberalisation of the ownership laws in South Africa may have increased the number of pharmacies in the country it did not result in increased access in previously disadvantaged and rural areas to any marked degree.