The Health Funding Association (HFA) warned that an additional 2.88% increase in medicine prices could lead to an increase in healthcare program costs by approximately 1 billion rands and a rise in annual household drug expenses by 400 million rands.
This warning followed the National Department of Health's approval of a 2.88% increase in the Single Exit Price (SEP) for medicines starting October 1st, which is in addition to the annual adjustment of 1.47% approved earlier this year.
HFA demanded that the department clarify the basis for this increase, including methods for assessing its impact on healthcare programs and households, and whether healthcare programs and consumer representatives were consulted before the decision was made.
Tonishan Naidu, CEO of HFA, stated that the association requires greater clarity regarding the evidence supporting this increase. He noted that 'the increase was implemented with only one week's notice, creating operational difficulties for administrators, programs, pharmacies, and patients, and generating uncertainty regarding drug pricing and benefits administration.'
Drug price increases may affect future costs
Naidu added that this increase could affect healthcare spending after 2026, as it will form the basis for calculating future annual drug price adjustments. HFA estimates that the additional adjustment could increase healthcare program costs by approximately 1 billion rands, and direct household drug expenses by another 400 million rands annually.
The association had informed the Department of Health in August after the government announced consideration of an additional increase following discussions with pharmaceutical industry representatives.
HFA questions lack of consultation
The association emphasized that healthcare programs and consumer representatives were not consulted before the increase was approved. They believe that 'their participation could provide expenditure data, help verify assumptions about affordability, and inform the consideration of possible alternatives.'
Furthermore, HFA requested an explanation from the department as to why a general price increase was approved instead of considering exceptional increases for specific drugs, which is permitted by pricing regulations. The association calls on the National Department of Health to provide evidence and affordability assessments justifying the extraordinary adjustment, and to create a structured opportunity for healthcare programs to participate in future pricing discussions.