Tamar Kahn
10 November 2009
Cape Town — SA's biggest pharmacy chains have welcomed the Department of Health 's surprise proposal to exempt marginal businesses from state-set dispensing fees, and said they had no plans to seek higher rates themselves.
On Friday the health department published new draft regulations for dispensing pharmacists, retaining the four-tiered fee structure announced earlier this year and adding new provisions to enable pharmacies to apply for permission to charge higher rates if they could demonstrate that the proposed levies would render them unviable.
"Our pharmacies are profitable in their own right. We'd never get exemption ," said New Clicks Holdings CEO David Kneale. The listed group owns health and beauty products retailer Clicks, which has rapidly moved into the pharmacy sector; it already has 217 dispensaries in its stores and plans to open between 30 and 40 more in the next year.
The four-tier system would see medicines commanding higher mark-ups and enable Clicks to expand into more rural areas, he said. Clicks was currently charging 26% on most medicines it dispensed, capped at R26.
"I can't see any reason why the fees should not be implemented now," he said.
Rival Dis-Chem, also using the capped R26% rate, said it was still studying the draft regulations.
"We may not implement the full increases," said Dis-Chem managing partner Ivan Salzman. "I don't think it will have an impact on our roll-out as we were profitable under the old scheme," he said.
Dis-Chem has 42 shops and planned to open 10 in the next year, he said.
The Pharmaceutical Stakeholders Forum, which represents retail pharmacists, is still analysing the economic impact of the four-tier pricing structure on its members.
Jonathan Broomberg, deputy CEO of medical scheme administrator Discovery Health, said the higher dispensing fees would increase costs for schemes.
"We are assessing the full impact," he said . Discovery welcomed the move towards resolving the long- running dispute between pharmacists and the government.
Heidi Kruger, spokeswoman for the Board of Healthcare Funders, which represents medical schemes, said the draft regulations appeared to allow for multiple dispensing fees, and this could prove difficult for schemes to administer.
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