Mthobisi Nozulela|Published
The Health Funders Association (HFA) has warned that an additional 2.88% increase in medicine prices could add about R1 billion to medical scheme expenditure and R400 million to households’ annual medicine spending.
The warning comes after the National Department of Health approved a 2.88% increase in the Single Exit Price (SEP) of medicines from 1 October, in addition to the 1.47% annual adjustment approved earlier this year.
The HFA has asked the department to explain the basis for the increase, including how its impact on medical scheme members and households was assessed and whether medical schemes and consumer representatives were consulted before the decision was made.
Thoneshan Naidoo, CEO of the HFA, said the association was seeking greater clarity on the evidence supporting the increase.
"The increase was implemented with just one week's notice, creating operational challenges for administrators, schemes, pharmacies and patients, while also creating uncertainty regarding medicine pricing and benefit administration, " he said.
Medicine price increase could affect future costs
Naidoo said the increase could affect healthcare costs beyond 2026, as it would form part of the base used to calculate future annual medicine price adjustments.
"HFA estimates that the additional adjustment could increase medical scheme expenditure by approximately R1 billion and households’ direct medicine spending by an additional R400 million per annum'
Naidoo said the association had written to the Department of Health in August after a government statement indicated that an additional increase was being considered following discussions with pharmaceutical industry representatives.
HFA questions lack of consultation
The association said medical schemes and consumer representatives were not consulted before the increase was approved.
"Their participation could have contributed expenditure data, helped test assumptions about affordability and informed consideration of possible alternatives"
The HFA has also asked the department to explain why a general price increase was approved instead of considering exceptional increases for specific medicines, as allowed under the pricing regulations.
"HFA is calling on the NDoH to share the evidence and affordability assessment supporting the extraordinary adjustment and to provide a structured opportunity for medical schemes to participate in future pricing discussions"
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