Medical Schemes Amendment Bill; Occupational Diseases in Mines and Works Amendment Bill: finalisation

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18 October 2002
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

18 October 2002

Mr. Ngculu (ANC)

Documents handed out:
Medical Schemes Amendment Bill [B37 - 2002]
Occupational Diseases in Mines and Works Amendment Bill [B39 - 2002]
ANC Amendments to Medicines and Related Substances (Appendix 1)
NNP Amendments to Medicines and Related Substances (Appendix 2)
IFP Amendments to Medicines and Related Substances (Appendix 3)
African Christian Democratic Party Amendments to Medicines and Related Substances (Appendix 4)

The Committee debated and unanimously passed the Medical Schemes Amendment Bill and the Occupational Diseases in Mines and Works Amendment Bill - both with amendments.

Medical Schemes Amendment Bill [B37 - 2002]
Ms Mnumzana (ANC) alerted the Chair to the fact that the ANC had an Amendment it proposed to introduce to the Bill. She explained that the amendments were occasioned by submissions made to the Committee by the Old Mutual, which the ANC found to be most helpful. She said that the ANC proposed to delete subsection (b) of section 1 referring to 'the transfer of members from one medical scheme to another' and in its place to insert (a) and (c) in order to provide for proper regulation of brokers. Please refer to Appendix 1

Dr. Rabinowitz(IFP) observed that the amendment ensured that those in the profession were regulated and that it did not propose to exclude anyone from practising as such. She said to that extent she fully supported the amendment.
The Chair noted that the Committee was in agreement with the amendment and was passed accordingly.

Ms Baloyi (ANC) introduced another amendment from the ANC at section 65 where she proposed to delete section 2(a) (1) referring to 'a medical scheme may compensate a broker only in accordance with its rules' and substitute it with subsection (1) to bar anyone from operating as a broker unless they were duly accredited by Council upon payment of the appropriate fee.

Ms Baloyi also introduced another amendment, which added clause (3) at section 65 and deleted subsection (c) (7) since it has already been covered by the aforesaid amendment.

The Chair put the two amendments to the floor and members endorsed them unanimously.

Dr. Rabinowitz (IFP) asked why the provision on the code of conduct had been removed from section 67 (1) (n). Refer to Appendix 3.

Mr. Harrison - from the Department - explained that the code of conduct for all financial advisors was comprehensively provided for by the Financial Services Board (FSB). In addition to this, specific conditions for financial advisors would be promulgated in the regulations.

The Chair then called for a vote on the Bill and the Committee passed it unanimously upon which the Chair read the Motion of Desirability, which was unanimously agreed upon and passed as well.
Deliberations on the Occupational Diseases in Mines and Works Amendment Bill
Ms Dudley (ACDP) asked if any of the parties that were consulted made representations on the Bill.
The Chair replied that he was not aware of any submission save for the Chamber of Mines, which had tendered submissions in support of the Bill.

Ms. Baloyi (ANC) introduced the ANC's amendment at section 36A of the principal Act. She proposed to substitute subsection (1) to ensure that even if a miner left the mine or worked where he contracted compensatable diseases, such works or mine continued to pay the reasonable costs of such period.

Ms Kalyan (DP) lamented that a once off compensation was problematic and wondered what happened afterwards.
The Chair concurred that the section made a limit of not more than two years and this was problematic.

Ms. Baloyi explained that instead of saying 'not more than two years' the amendment substituted for the word 'legitimate' and that not only reasonable costs were paid but other attendant legitimate provable costs as well. She explained that the amendment effectively removed the two-year limit while at the same time guarded against unfounded or unreasonable claims.

Dr. Rabinowitz said that she was happy with the amendment as drafted.
The Chair then put the amendments to vote and the Committee endorsed them unanimously. He then read the Motion of Desirability, which was agreed upon, and the Bill passed accordingly.
The Chair proposed that members finalise the Medicines and Related Substances Amendment Bill on the 22 October.

Meeting adjourned.

Appendix 1


Amendment I
DELETE: In 1(a) lines 1O and 11: "justice means a justice as defined in section 1 of the Criminal Procedure Act, 1997 (Act No.51of 1977) [flagged for state law advisor to clarify]

Amendment 2
DELETE: line17-1.(c)

Amendment 3
Insert in Section 4 (18 C) line 33, after the words medicines the
foIlowing: "and such regulations shall also provide for an enforceabIe
Code of Practice"

Page 4 ( MOVE Dr JASSAT)
Amendment 4

Section 6 (b) (22C) insert in line 54 after the word medicine the words "or medical device"
Amendment 5 (page 4) (MOVE Dr. JASSAT)
Insert in 6 (b) line 56 after the word medicine the words: " or medical device"

Page 5 ( MOVE Ms Mnumzana)
Amendment 6
F(3) ACT 90, 97 THE FOLLOWING WORDS: "And shall inform the
persons prescribing the medicines of the substitution referred to in 22f

Amendment 7

Section (22G) , 8 (b) line 45 after the words distributors INSERT the words, " or any other person selling schedule 0 medicines"

Amendment 8

Section (22G ) 8 (c ) line 49 insert after the word wholesaler the words "or distributor"

Amendment 9

Section 28, in 11(1) (c) line 5 after the word seize insert the words:
"any book, record, or documents"

Amendment 10

Section 28 in 11(b) (5) delete in lines 9 and 10 the word " justice"
Appendix 2
Proposed NNP Amendments to B40-2002 (Medical & Related Substances Amendment Bill)

1. Pg 4 Line 23 (Act 90 of 97) After "prescribed", add:
Refer to WHO definitions for further definitions in this regard.

2. Pg 10 Line 47 (Act 90 of 97)
Insert the words "to the state" after affordable medicines

Pg 3 Line 33 (B40-2002) After "medicine", add:
"and the enforcement thereof'

4. Pg 5 Line 6 (B40-2002)
Replace SA Pharmacy Council with:
"Health Professions Council: of SA, the Allied Health Professions Council of SA and the SA Nursing Council as applicable" and vice versa.

5. Pg 24 line 12 (Act 90 of 97) Delete Clause (3)
(Renumber as appropriate)

6. Pg 5 after line 23 (B40-2002) Add clause (f) as follows:
"The dispenser of an interchangeable multisource medicine accepts legal liability for any substitution he/she affects and must take all reasonable steps to inform the prescriber of any substitution.

7. Pg 6 (B40-2002)
After line 29 add:
"(8) An Appeal shall lie from any decision of the Minister or the appeal committee to the High Court."

Appendix 3
IFP Amendments: Medicines & Related Substances Control Amendment Act Amendments to Act 90 of 97 and Bill 40 of 2002

1. P4 Sn1 (k) add to(4)

" Which will require the same standards for safety quality and efficacy as all other medicines produced marketed and sold in Republic of South Africa"

2 P6 Sn3

Add "The members shall include persons who are experts in the professions and fields of practice relevant to the issues regulated by this legislation, including, but not limited to pharmacology, pharmacy and medicine"

3. P6 Sn5 leave (2) (b)

4. P6 Sn5 (3) leave "subject to provision of Sn3"

5. 15c
(a) Within the framework of the Patents Act 1978 (Act 57 of 78) the Minister shall prescribe conditions for the granting of voluntary licence for the production and sale of generic medicines
(b) Leave as is
(c) Add "prescribe regulatory procedures for, as well as use of, medicines referred to in (a) & (b) according to the same quality, safety and efficacy requirements as all other patent and generic medicines produced and sold in South Africa.

6. 22c (1) a Pg 22 Delete
7. 22g (3a) Pg26 Change single exit price " to maximum nett exit price" Change in L 40 " only price" to "maximum nett price"

Appendix 4
Submission by Cheryllyn Dudley MP 18 October 2002

Suggested Amendments to:
Medicines and Related Substances Control Amendment Bill

South Africa's Obligations under the T.R.I.P.S. Agreement.

Page 10 of Act 97 from line 46

Concern has been raised that the Medicines and Related Substances Amendment Act 1997 is inconsistent with South Africa's international obligations under the T.R.I.P.S. Agreement.

The ACDP recognises the need for generics and therefore the necessity fo[ Ministerial legislative authority to act for the supply of affordable medicine to the State, when the public interest so demands. However, the amendment seems to allow the Department of Health the legal' right to arbitrarily interfere with the Patents Act, and the individual rights of patent holders.

The ACDP recommends the following amendment:
15C the Minister may prescribe conditions for the supply for more affordable medicine to the state . when in the interest of public health and /or order , including but not limited to the protection of human life, and /or the prevention of serious prejudice to the public. In such circumstances the minister may

2 Exclusion of private Sector from potential benefits of parallel importation*

Page 10 of Act 97 from line 54
Private sector participation in this process could encourage manufactures to lower prices on locally patented medicines and exclusion could result in a cost spiral due to no incentive to supply more affordable medicine to the private health care sector. It could also restrict research and economic growth. Other developing countries have recognised this possibility, and adapted domestic law to encourage research and/or development. Developing countries dealing with this area of law, do not make the distinction between benefits for the
State and the private sector, when there is a common good. ic medical experimentation and/or clinical research.

International Examples:
Mexican law (Industrial Property Law, 1991 as amended in 1994)

Argentina (Patent Law) No.24.481, 1195 article 36(a) b

Brazil (Patent Law) 1996, refers to those

Panama, (Law No.35, 1996 Article 19.2)

Trinidad and Tobago [Act No 21 of 1996, article 42(b)]

The ACDP recommends the following amendment:

15C prescribed the condition on which any medicine which is identical in composition , meets the same quality standard and is interested to have the same proprietary mane as that of another medicine already registered in the Republic , but which is imported by a person who is the holder of the registration certificate of the medicine already registered and which originated from any site of manufacture of the original manufacture as approved by the council in the prescribed manner, may be imported . provided that such medicine conform to section 4 Part III of the T.R.I.P.S agreement.

C Pharmacy ownership currently an unaccetable monopoly*
The Pharmacy Act states that only a 'pharmacist' may own a pharmacy, and the amendments do not address this. Pharmacy ownership must be extended to other role players in both the health care and business sector, so as to allow legitimate competition. This situation contributes to the hi2h cost of medicines in South Africa and the Act should therefore allow 'owners', as envisaged by the Pharmacy Ownership Regulations of November 1999, to compete in the market as well. The current monopoly is unconstitutional.

4 Volume discounts * Page 12 Act 97 from line 20
The legislation is silent on volume discounts (which are a universally practised business reality in South Africa). Amendments should provide for a discount mechanism, where large purchasers of' pharmaceuticals are able to purchase at a reduced rate and pass these savings onto the consumer.

The ACDP recommend the following amendment:

Section 18A
No person shall supply any medicine according to a bonus system, rebate system of any other incentive system , but this shall not include a transport volume-base discount system

5 Pricing Committee Page 26 Act 97 22G / page 5 of the Bill sec8 line 40
The ACDP supports transparent pricing but believes it is a mistake for the state to interfere in the pricing mechanism, which amounts to tampering with rights and liberties. Availability of generics and open competition will be sufficient to drive down prices. As it stands the pharmaceutical sector and private hospitals are not represented on the pricing committee. ~ is unfair to regulate, control and dictate to these sectors without affording them the ri2ht of representation and without fair representation of all stakeholders affected there is no incentive for them to belong or form part of the broader intention, and legitimate questions around unconstitutional exclusivity can be raised.

6 Single Exit Price Page 26 of Act 97 from line 39
The ACDP is not in favour of state interference in pricing

The ACDP recommends that the pricing committee be scrapped as this in itself will drive up costs and ultimately prices. There are 1 5000 manufacturers in the vicinity of Bombay alone and provided medicines are tested and regulated such huge competition will be the only effective way to drive prices down.

7 SuppIimentary qualifications for Doctors
page 22/24 of Act 97 sec 14 from line 52 and pages of the bill sec 6(b)

The ACDP objects to competition policy being decided by the DC through licensing determined by need, which will ultimately drive up prices. Liberty requires more public choices therefore the more supply points the better.
The ACDP recommends that:
Additional courses for Doctors to dispense must be available and encouraged but not mandatory.
This material should be included in the university curriculum to encourage more access points {or the public. Just as Pharmacists should be able to prescribe ethical medicine, thereby giving the public more choices which is the best public protection.
If courses are made mandatory for Doctors they must only apply to future Doctors and not those presently dispensing.

* Adapted from proposals by: Adv. K.WorralI-CIare



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