How does the South African government intend making medicines more affordable?
The Medicines Act introduces four important elements to contain health care costs to government and the private sector.
Generic substitution of medines that are no longer under patent is an important part of the law. This means that a pharmacist must offer a patient the generic version of a brand name medicine. A generic medicine is a drug with the same quality active ingredient that a brand name drug.
Another element of the Medicines Act is the introduction of a
pricing committee that will set up transparent pricing mechanisms. Pharmaceutical companies will have to justify the prices they charge.
The third part of this law is the parallel importation provision - known as section 15C of the Medicines Act. This measure allows the government to import the same medicine sold by the same company or its licensee at a lower price in another country.
The Medicines Act also allows international tendering for medicines used in the public sector.
On 18 February 1998, the Pharmaceutical Manufacturers Association (PMA) and forty multinational drug companies tried to stop the Medicines Act by going to Court against the South African government. After nearly three years of delays and counter-delays, the case will be heard in the Pretoria High Court from 5th - 12th March 2001. In this period of delay, more than 400 000 people have died of AIDS-related illnesses. Many people have died because they cannot afford expensive medicines.
But why are the drug companies taking the government to court? Across the world, drug companies made sales of more than $315 billion in 2000. This is more than the gross domestic product of all the 12 countries in the Southern African Development Community (SADC). Fortune Magazine has shown that the drug companies make super-profits. The drug companies complain that the government is trying to expropriate its property and that it is giving the Minister of Health too much power. In fact, they fear competition and being exposed as organisations that profiteer from medicines.
Conclusion
The Medicines Act deserves the support of all people in South Africa and
internationally. It is an attempt to improve health care by lowering the price
of essential medicines. In a country with over four million people living with
HIV, this is especially important. If the Pharmaceutical Manufacturers
Association succeed with their legal action, it will be an enormous blow, and
could delay by many years the possibility of affordable medicines and quality
health care for poor people in South Africa and throughout the developing world.
TAC's Fact Sheet on the Lawsuit
Send additional information for this page to info@healthgap.org.