Medicine pricing formula is quite clear, says minister’s advisory committee
The pharmaceutical industry, unhappy with a 1.26% increase in the single exit price, is seeking clarity on how the committee determines its recommendations
The advisory body that guides the health minister on medicine price increases says there is no ambiguity in the formula it applied — contrary to the view put out by the industry on Monday. Pharmaceutical manufacturers are lobbying the health department for an extra price hike to cushion them against the weakening rand, which has made imports more expensive and pushed up their production costs. But they are also seeking greater clarity on how the pricing committee determines its recommendations to the minister, as drug makers have been consistently disappointed in the annual price increases they are permitted. They were granted a below-inflation adjustment in January of 1.26%. While pharmaceutical manufacturers can freely determine the launch price of their products, from that point on they may not increase their private sector prices beyond an annual threshold set by the minister, known as the singe exit price. Typically they are permitted one price increase a year, but there is sco...
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