New Clicks Holdings - Medicine Pricing Regulations
Release Date: 26/05/2004 11:41:40 Code(s): NCL
NEW CLICKS HOLDINGS - MEDICINE PRICING REGULATIONS
NEW CLICKS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1996/000645/06)
JSE share code: NCL
ISIN: ZAE000014585
(`New Clicks`)
MEDIA RELEASE
NEW CLICKS IN COURT ACTION TO SUSPEND PRICING REGULATIONS
Cape Town - New Clicks Holdings has instituted urgent legal proceedings against
the Minister of Health and the Chairperson of the Pricing Committee out of the
Cape High Court, to suspend the operation of the medicine pricing regulations
and to have them set aside and declared invalid.
Trevor Honneysett, group leader of New Clicks, said the group believes the
pricing regulations are financially and legally unsustainable, and would cause
irreparable damage to retail pharmacy and the pharmaceutical supply chain.
`In South Africa retail pharmacy is an important distributor of medicine to the
general public. The destruction of retail pharmacy would have a serious impact
on the provision of medication to the public, particularly people in rural
areas.`
He said New Clicks had supported the introduction of a transparent pricing
mechanism to bring discipline into the pharmaceutical supply chain and to
eliminate pricing anomalies. `One of the key drivers behind New Clicks` move
into the pharmacy arena has been to achieve cost savings and efficiencies, and
to provide lower prices.`
`New Clicks is committed to a sustainable pricing model which delivers price
savings for the consumer and ensures the long-term viability of retail pharmacy.
Following the publication of the draft pricing regulations in January this year,
we engaged with the Department of Health on alternative financial models but to
date these efforts have not met with any favourable response.`
New Clicks has been left with no alternative but to challenge the regulations in
court, he said.
The basis of New Clicks` challenge is two-fold. Firstly, the way in which the
Minister has established the single exit price is not in accordance with the
Medicines Act and consequently the single exit pricing mechanism is irregular.
Secondly, the Minister has not complied with her obligation under the Medicines
Act to prescribe `an appropriate dispensing fee`. The fee which has been
prescribed is not appropriate because it imperils the economic viability of
retail pharmacy in South Africa and frustrates - rather than facilitates - the
objectives of the Medicines Act.
Honneysett added that the pricing regulations have created uncertainty and
suspicion and already damaged the pharmaceutical market and the interests of
patients and consumers they were intended to benefit. The relationship between
pharmacists and the Department of Health, which is essential for the upliftment
of healthcare delivery in the country, has also been damaged, he said.
He stressed that the group remains committed to finding a solution to the
medicine pricing issue which achieves the objectives of the National Drug Policy
of making medicines more accessible and affordable, while retaining the retail
pharmacy distribution infrastructure.
Ends
Issued by Tier 1 Investor Relations on behalf of New Clicks
For further information contact
Tier 1 Investor Relations
Tel (27 21) 702-3102
Cape Town
26 May 2004
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