Hope for dispensing charge settlement

The agreement is significant, as it will allow pharmacists to revive their attempts to reach an out-of- court settlement with the state.

Industry sources said they hoped new Health Minister Barbara Hogan would be more amenable to negotiation than her predecessor, Manto Tshabalala Msimang, who was moved to the Presidency during last month's cabinet reshuffle.

The case has been postponed because the state missed the September 30 deadline to file its heads of argument and only submitted the documents on October 17, according to the pharmacists' lawyer, Martin Versveld.

The parties have been locked in a protracted legal row since 2004, after the then health minister, Tshabalala-Msimang, introduced new regulations to the Medicines Act seeking to control medicine prices along the entire supply chain, from factory gate to retail outlet. The regulations included limits on the fees doctors, hospitals and pharmacists could charge for the medicines they dispensed. The maximum markup was 26%, capped at R26.

Two retail pharmacy associations — the Pharmaceutical Society of SA and United South African Pharmacists — joined health and beauty products retailer New Clicks Holdings and private hospital group Netcare in challenging the dispensing fees, arguing that they were so low they would make their businesses unviable.

The Cape High Court ruled against the pharmacists in August 2004, but they succeeded in getting the Supreme Court of Appeal to scrap the regulations that December. The health department then went to the Constitutional Court to try to get the rules reinstated. In September 2005 the Constitutional Court ruled that the Medicines Act permitted price controls, but said the fees devised by the health department were inappropriate. It ordered the health department to revise the fees, giving it 60 days to negotiate a better deal with the pharmacists.

Retail pharmacists launched a fresh court challenge last year.

Source: Business Day

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