In an attempt to balance the economic interests of pharmacists with the broader goal of making medicines more affordable, the South African government on Thursday unveiled new proposed rules for dispensing fees.

In 2004, the government came under fire when it attempted to set narrow caps on the dispensing fees charged by pharmacists, leading to the rules being overturned by the country's top court. The current proposal sets a sliding scale that lowers the fees for the cheapest drugs but allows them to rise for more expensive medicines. "A lower dispensing fee can be charged at the discretion of the pharmacy or pharmacy owner," said Health Minister Manto Tshabalala-Msimang.

According to the government, the new plan, which requires a "single exit price" for drugs across the county, will save South African consumers up to 3 billion rand ($478 million US) per year.

The cost of medicines is an especially sensitive subject in South Africa, which has the world's highest HIV/AIDS caseload. Many of the country's small pharmacists say dispensing fees are a large source of revenue. When the government first attempted to limit the fees to 26 percent of a drug's retail price, capping out at 26 rand ($4 US), pharmacists argued the rules would destroy profits and cause pharmacies to close, particularly in poor areas.

The new rules, which are currently open for public comment, would limit dispensing fees to 7 rand ($1 US) plus 28 percent of the purchase price for medicines under 75 rand ($12 US). The rates would rise for more expensive drugs.

Pharmaceutical Society of South Africa President Clive Stanton said the draft regulations appear to be "a step in the right direction." "On the whole we are very positive but we want to run the numbers" to see how the suggested tiers would affect business, he said.

Back to other news for March 13, 2006

Search the Newsroom archive