Medicines & Related Substances Amendment Bill [B44-2008]

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27 August 2008
Chairperson: Mr L Ngculu (ANC)
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Meeting Summary

The Committee assessed the Department of Health’s amendments to the Bill. Members approved of amendments made to clauses 11, 14, 15, 17, 18, 19, 20, 21, 22, 24, 25, and 26. There were three clauses that the Committee discussed in depth.

Clause 7 spoke about certification and registration of products. The Department amended the clause to say that the Minister could establish an appeal committee to deal with objections to the registration of new medicines if the objections were not based solely on efficacy, safety and good quality. A Member of the Committee was concerned that anybody, including rivals, would be able to object to the registration of the new product, thereby delay the registration process. The Member was also concerned that the process for registration was too long, and that allowing objections based on public health interests would result in a two-tier process and uncompetitive behaviour. The Department informed the Committee that anybody could object to the registration of a new product before; this was not a new clause and was happening currently. The timeframe that was given in the clause represented the maximum amount of time in which registration of a new product could be dealt with. The Member reiterated his view that objections should only be based on efficacy, safety and good quality. He wanted it on record that he rejected the idea that objections could be based on public interest.

Clause 23 looked at the licensing of a wholesaler or manufacturer to distribute products. Members wanted to know what qualifications and training a wholesaler needed to have in order to be licensed by the Authority. The Department informed the Committee that medical devices came with training and instruction manuals.

Clause 27 spoke about the purchasing and selling of medical products. The Clause was amended to say that wholesalers were only allowed to sell products with scheduled substances to the retailers; however, wholesalers were also allowed to sell schedule 0 products to the public as well as to retailers. Members were confused by the clause. They thought that the clause would restrict some wholesalers from selling some Schedule 0 products and thought there were confusions with the term “wholesaler”. The Committee needed to differentiate between ordinary wholesalers and pharmaceutical wholesalers. The Department informed the Committee that the issue was not about distinguishing between wholesalers; it was about understanding the clause. To eliminate confusion, the Members decided to add a subsection to the clause that would inform people that provisions in the clause did not apply to Schedule 0 medicines. This made it clear that a wholesaler could continue to sell Schedule 0 products to the public.

It was noted that the Committee would proceed with clause 28 in the following week.

Meeting report

Amendments and Deliberations
Mr Thami Mseleku, Director General of the Department of Health, reminded the Committee that Members had asked the Department to make a substantial amendment that would introduce a single system of registration as well as a process of appeal to the Minister for certain aspects of decisions.

Clause 7 amending Section 15: Certification and Registration of Products
Mr Mseleku read out the Department’s amendments. He informed the Committee that the previous amendments to Section 15 reflected errors in drafting. He explained that the Department was giving expression to the Committee’s proposal that it must be the Authority that registered medicines so that there was no two-step process. Because of the possibilities of objections to the registration of a new medicine that were not necessarily based on the issues of efficacy, safety and good quality, the Minister would be allowed to establish a committee could consider the objections. Objections could also be based on public interest. Members had to bear in mind that there was a section that granted any person that did not agree with the decision of the Authority the ability to appeal against the decision of the Authority. An appeal committee could be established. Public interest issues were to be defined in a new subsection (g) and were not related to the proposed Section 15(3)(a), which related to safety, good quality, efficacy, suitability and compliance with prescribed requirements.

Mr S Dithebe (ANC) welcomed the clear definition of “public interest”. He wondered if it was possible to define public interest such that it was not directly or indirectly linked to the Constitution. The Committee knew that anything that was in conflict with the Constitution would be declared unconstitutional. He told the Committee this so that they could pre-empt any intervention or argument by any party.

Mr Mseleku stated that the Member’s concerns would apply across the board. The Department had not yet found anything unconstitutional with its definition of public interest.

Mr M Waters (DA) noted that the clause was saying that anybody, such as competitors could object to the registration of a new product in the market. If Company 1 wanted to register a new drug that was more effective than Company 2’s drug, then Company 2 could delay the new products registration by objecting to it. The period it took to register a product amounted to 134 days. He thought that the clause showed the Committee that it was back to the two-tier system. If there were any objections, they had to be based on efficacy, safety and quality. By bringing back public health interests, economic interests and the likelihood of registering and improving access to healthcare for vulnerable groups, the Department had effectively brought back the two-tier system. He wondered what these three factors had to do with registering a product. Products should be registered on the principles of efficacy, safety and good quality. The proposed new subsection did not involve the Minister, but did involve the Authority. The public health system did not have to provide certain drugs if they were not on the essential drug list. Private medical aids did not have to provide these drugs to their patients either. He agreed that there had to be the option of objecting to certain drugs; however, it had to be based on efficacy, quality and safety only. He wanted to know if the Department was in consultation with the Competition Commission regarding this issue, as the proposals could go a long way towards restricting competition in the market.

Mr Mseleku answered that the Department had followed the proposal that came from the Chairperson, which said that there had to be a role for the Minister to deal with some possible objection to the registration of new drugs. He referred the Committee to Clause 30, which spoke about appealing against the decision of the Authority. The clause said that any person that disagreed with the Authority’s decision, including rivals, could appeal against the decision by notifying the Chief Executive Officer (CEO). This was not new as this provision was also included in the current Act. The Department could not limit the rights of people who were not considered rivals. Rivals had a right to say if they thought there was a public issue regarding the registration of a new drug. He suggested that Mr Waters should not read the number of days that it took to register a drug in the way that he did, as this was incorrect.  When the clause said “within thirty days”, it could mean that a part of the process could happen within a day. The Department was simply saying that there was a certain period of time in which they would deal with the new medicine. The clause showed the maximum amount of time that the Department could take to deal with the registration of the medicine but the process could happen over a shorter period of time.

Mr Mseleku stated that he did not think that there was any uncompetitive behaviour. The Competition Commission did not object to having clause 30 in the Bill. The possibility of objecting to the registration of a drug did not mean that there was uncompetitive behaviour.

Mr Waters informed Mr Mseleku that he had mentioned the timeframe for registering the drugs because the Department of Health was not the most effective Department in the country. Given the Department’s history, it would probably take them thirty days to get their act together. He noted that the Department did not want sectional type of access of drugs for people; however the essential drug list restricted access to some drugs from the majority of people in the country. By registering drugs, people were given more choices. The Department also had to look at whether certain drugs reached vulnerable groups. He commented that the current Act stated that anybody could object to a drug being registered but they had to pay a prescribed fee. He noted that this could help reduce the number of people and rivals who simply wanted to object to the registration of certain drugs based on their own personal interest.

The Chairperson stated that the prescribed fee was inserted in to the clause years ago because at that time the sector was uncompetitive. The Committee wanted to amend this clause now. He stated that people objected to the registration of drugs for a number of reasons. The Bill was being amended to say that any person that wanted to object to the registration of drugs could do so but that there had to be good grounds for the objection.

Mr Waters agreed that if people wanted to object to a drug’s registration, then they could. He suggested that the Committee limit the factors on which the objections could be based. He reiterated his view that the objections should only be related to efficacy, safety and good quality.

Mr Mseleku stated that Mr Waters was saying that the new Act would allow anybody to object to the registration of new drugs, including competitors, but he repeated that the existing Act allowed for this anyway. Anybody could object under the Bill, just as anybody could object before. The issue was simply around the grounds on which people could object. These grounds were currently efficacy, safety and good quality. The Department was saying that there could be issues other than efficacy, safety and good quality, which would be valid, such as issues of competition that would affect the industrial policy of the country.

Mr Dithebe commented that he thought the regulatory regime for the registration of medicines was quite stringent and sought to preclude members of the public from lodging complaints against products that were going to be registered. He thought the clause was self-explanatory and appealed to Mr Waters to refrain from the temptation to object to it.

Mr Waters stated that he understood the issue of competition. However, South Africa had to become more competitive as a nation if it wanted to compete with the rest of the world and export its goods to other countries. He added that the Appeal Committee in the new Bill should have the same precautions that the current legislation had for the Appeal Committee, and that this should be inserted into the new section 15 (3)(d).

Mr Waters stated that he wanted it on the record that he approved of the dual system; however, he rejected the proposed sub-clause (g) altogether.

Mr Mseleku stated that Mr Waters was entitled to reject the clause. However it was unfair to label the process a two-tier system. This system showed that the Authority registered the medicines. When objections were made, the appeal committee would make suggestions to the Authority. There was only one system.

Mr Waters stated that the Authority was evaluating drugs and medical devices for efficacy, safety and quality, but there was also the possibility of objections being raised on other grounds, which meant that the Appeal Committee would have to be called in. This was what made it a two-tier system.

Mr A Madella (ANC) thought that Mr Mseleku had explained the recommendation adequately. He appealed to Mr Waters to be more flexible and less rigid in his approach to the recommendation. He added that it could be assumed that some of the objections would be based on the fact that there was not significant improvement in access to medication.

The Chairperson suggested that the Committee move on.

Clause 11 amending Section 16: Cancellation of Certification and Registration
The Department proposed the deletion of the word “certification” in the Act wherever it appeared. The section would now be called “Cancellation of Registration”. Mr Mseleku stated that the Department proposed the deletion of the Bill’s initial proposals for Section 16(1)(c), as it was now covered in Clause 7. The proposals for Section 16(3)(b) would then also be deleted.

Mr Dithebe commented that he thought the Committee was moving toward a new drafting style in terms of legislation. He wondered if there was any reason that the Department used the word “shall” instead of “must”.

Ms Ntombebandla Mnyikiso, State Law Adviser in the Office of the Chief State Law Adviser, stated that the word “shall” was outdated; however, the problem was that they were amending a portion of the old Act.

Clause 14 amending Section 18A: Bonusing
Mr Anban Pillay, Cluster Manager: Department of Health stated that people wanted clarity on what was meant by the bonus system and incentive scheme. The industry suggested that they have regulations that clearly defined what bonus rebates and incentive systems were, and the Department had agreed that these were needed.

Mr A Mlangeni (ANC) stated that he was a new Member and not familiar with what was going on. He wanted to know if the Department was saying that the manufacturer of certain medicines could not supply medical products at a discounted rate. He wanted to know how the Department planned on controlling this.

Mr Waters informed the Member that this issue had already been corrected.

Mr Mlangeni asked if the Department would be able to monitor this system.

The Chairperson informed the Member that the Department was already monitoring the system. He also noted that the South African Medical Device Industry Association (SAMED) had proposed the appropriate allowance of discounts.

Mr Mseleku answered that the clause stated that the Minister could allow acceptable discounts. The principle of the matter was that no person was allowed to sell products and medical devices on the basis of a bonus system. However, the Minister may prescribe acceptable bonus systems.

Clause 15 amending Section 18B: Sampling of Products
The Chairperson read out the clause. He noted that were no objections to the clause.

Clause 16 amending Section 18C: Marketing of Products
The Chairperson noted that there were no objections to the clause.

Clause 17 amending Section 19: Prohibition on sale of products which do not comply with prescribed requirements and furnishing of information regarding products to the Authority
The Chairperson noted that there were no objections to the clause.

Mr Mlangeni stated that he did not understand what the clause was saying.

Mr Pillay explained that the clause spoke about the prohibition of the sale of medicine. This was not a new clause.

Members agreed to the amendments.

Clause 18 amending Section 20: Publication or Distribution of False Advertisements Concerning Products
Mr Dithebe stated that the clause provided an excuse for ignorance on the part of anybody who engaged in false advertisements. He wanted to know what steps were being taken to ensure that both the primary manufacturers (who provided information to intermediaries on the understanding that this would be passed on to the consumer) and the intermediaries could not plead ignorance in the event that they were prosecuted for publication or distribution of false advertisements.

Mr Mseleku stated that in most cases intermediaries were not aware of nor directly in touch with manufacturers. For example, there were people who bought Schedule zero drugs and then marketed them in a particular way. The clause would still be necessary, so that intermediaries could prove to the satisfaction of the court that they were not aware that other manufacturers were advertising false claims. This was not an issue of “ignorance of the law”; it was about not knowing that an advertisement was in fact false or misleading.

There were no other questions. Members agreed to the amendments.

Clause 19 amending Section 21: Authority may Authorise Sale of Uncertified or Unregistered Products for Certain Purposes
The Department proposed the deletion of “in consultation with the Minister” as well as the words “certified or”. The Committee agreed to the amendments.

Clause 20 amending Section 22 of Act 101 of 1965
The Department had amended the clause and read out the wording (see attached document). The words “Director-General” would be amended to “the Authority”. There were no objections to the amendments. 
Clause 21 amending Section 22A of Act 101 of 1965
The Department’s amendments were adopted.

Clause 22 amending Section 22B of Act 101 of 1965: Publication of Information Relating to Products or Scheduled Substance
There were no objections to the amendments.

Clause 23 amending Section 22C of Act 101 of 1965
The clause stated that the Authority, on application, could issue a licence to manufacture a product to a manufacturer, wholesaler or distributor of a product,

Mr Madella informed Members that they had to look at other proposals that amended the clause.

The Chairperson stated that SAMED were proposing a limitation to why people could be licensed. 

Mr Mseleku stated that licensing was different from registration. Most practitioners of alternative medicine did not need to be licensed in the same way for distributing medicine. This licensing was for dispensing or compounding medicines. He stated that the clause dealt only with licensing, whereas before it dealt with registration and scheduling. There were two forms of licensing. There was an individual licence to dispense medicines and there was the licence of the “premise”. Various submissions stated that the Department should not have a requirement for licensing for practitioners. Therefore, the word “practitioner” was deleted. For example, doctors and nurses were not allowed to dispense medicine; however, they could be licensed to distribute and compound medicine.

The Chairperson wondered about the conditions and prescribed minimum conditions for practitioners and doctors to be licensed.

Mr Mseleku stated that the Bill did not prescribe the qualifications needed in order to handle medicinal products. It said that anybody else who was not qualified in one way could be licensed on the basis of something else.

The Chairperson stated that he was not convinced.

Mr Dithebe wondered if the amendments were of such a nature that they ensured that people were well equipped to do what they were supposed to do.

Mr Mseleku stated that distributing medical devices meant that there had to be instructions and training support. It was not a question of qualifications. The Department was talking about instruction manuals, which trained people how to use medical devices.

Ms Madeleine Pearce, Head of Regulatory Affairs, SAMED, stated that when a person received a licence to distribute or manufacture medical devices in this country, that authorisation would come with accompanying documentation that set up an appropriate quality management system. There had to be essential requirements in place to show that the devices were safe, effective and of good quality. It would be in the company’s interest to train the people who would be using the devices, simply because a number of post-marketing incidents would cause them to lose their reputation. She assured Members that this clause was equivalent to other countries’ laws.   

Clause 24 amending Section 22D of Act 101 of 1965: Period of Validity and Renewal of Licence
There were no objections to the amendment.

Clause 25 amending Section 22E of Act 101 of 1965
The Committee agreed with the amendments.

Clause 26 amending Section 22F of Act 101 of 1965
The Committee agreed with the amendments.

Clause 27 amending Section 22H of Act 101 of 1965
The Department proposed the insertion of the words “other than Schedule 0 substances” after the words “purchase products”.

Mr Mseleku stated that this amendment responded to issues that were raised by the Committee. The issue was that some wholesalers were arguing that some of individuals bought a whole range of medicines and sold them to other companies and the public. Therefore, the Department decided to exclude Schedule 0 substances. A wholesaler could sell products other than Schedule 0 products only to the retail sector. The Bill also stated that wholesalers were not allowed to purchase products other than Schedule 0 substances from any source other than the original manufacturer or the primary importer of the finished product.

The Chairperson stated that the way Mr Mseleku explained the clause confused him. He wondered how the Department would include Schedule 0 drugs in the clause in a way that it did not constrain wholesalers.

Mr Mseleku explained that the legislation currently said that wholesalers would only sell products to the retail sector. The Department’s understanding was that the wholesalers were arguing that that they sold products that could actually be subject to the laws for Scheduled products. They sold these products not only to the retail sector, but sometimes to the public as well, and therefore feared that they would be hit by clause 27, preventing them from selling scheduled substances to the public, as the clause now stated that wholesalers could only sell Schedule 0 drugs to the public, although they could sell all Scheduled drugs to retailers.

The Chairperson still did not understand what the clause meant.

Mr Mseleku stated that the clause did not say that wholesalers could not sell certain scheduled substances. He explained that the clause stated that wholesalers could sell all scheduled substances only to retailers; however, they could now sell Schedule 0 drugs to the public as well.

Adv Jaco Roestoff, Attorney for National Association of Pharmaceutical Wholesalers (NAPW), stated that there was confusion with the term “wholesaler”. He stated that the Committee had to differentiate between pharmaceutical wholesalers such as the NAPW and Massmart or Pick’n’Pay-type wholesalers. The rationale behind this clause was to prevent counterfeit drugs from being sold to patients. Therefore, the wholesaler who was the intermediary in the supply chain of medicines had to buy from the original manufacturer only, and the wholesaler could only sell to the retailer, the person responsible for dispensing the medicine. Wholesalers other than pharmaceutical wholesalers had expressed their concern with the Bill, as they were also involved in selling Schedule 0 medicines and products to consumers. The wording of the clause showed that they could no longer sell these products, as they would only be able to sell to retailers. The confusion occurred because there was no proper definition for wholesalers.

Mr Mseleku stated that his interpretation of the clause differed. Whether a wholesaler was a pharmaceutical wholesaler or an ordinary wholesaler, he would be able to sell Schedule 0 medicines to retailers as well as to the public. Therefore there was no need to distinguish between the two types of wholesalers. The clause stated that all scheduled substances and products could only be sold to retailers, except Schedule 0 products, which could be sold to retailers as well as the public.

Mr Mlangeni wondered why the Department used the words “other than” rather than “except”, as it was simpler.

The Chairperson noted that this was going to be quite a fundamental issue.

Mr Pillay used Pick’n’Pay’s submission as an example to clarify issues. Pick’n’Pay were retailers but could be considered wholesalers as well, because of their hypermarket brand. They sold general merchandise, Schedule 0 medicines, food and toiletries directly to the public as well as to small retailers. The submission stated that the clause, if  not amended, would make it very difficult to conduct business, as it would not be possible for Pick’n’Pay to tell if a customer in a store was a retailer or consumer.

The Chairperson stated that he did not understand the proposal. The clause caused confusion. The Department had to remedy this problem.

Mr Mseleku stated that the clause stated that whether the products were classified as scheduled substances, cosmetics or foodstuffs, they could only be sold to retailers. The wholesalers wanted this to be amended. The Department then suggested that the amendment should keep the element that any product that was scheduled should only be sold to the retail sector, except if the product contained Schedule 0 substances. Products containing Schedule 0 substances could be sold to retailers as well as to the public. Mr Mseleku did not understand the difficulty that Members were having in understanding the clause.

The Chairperson stated that the term “wholesaler” in the clause did not have the same meaning as “pharmaceutical wholesaler”. The Committee had to discuss and differentiate between the two terms. Both terms had to be defined separately in the clause.

Mr Mseleku commented that it was not a matter of having a discussion about definitions; it was about understanding what the clause was saying.

The Chairperson stated that no wholesaler could purchase products from any source other than the original manufacturer. His understanding was that the Committee had to assist the Inspectorate to keep track of the movement of medicines at all times to avoid the sale of counterfeit drugs. The confusion arose when there were certain companies such as Makro and Massmart who were supposed to be wholesalers but were technically retailers. They could be classified as retailers because they sold straight to the public. The clause sought to ensure that medicine could be tracked and found at any given moment of its movement. If this issue was not remedied, the Committee would be legislating for a loophole that they would regret. The Committee had to find a way of regularising the pharmaceutical industry.

Mr Mseleku stated that he thought he understood the Chairperson’s concerns about pharmaceuticals. He suggested that the Committee find another way of dealing with the issues in the clause instead of trying to define the term “wholesaler”, which would be very troubling.

Mr Dithebe stated that the Committee had to find the definition of “wholesaler” that was most appropriate for South Africa.

Dr R Rabinowitz (IFP) stated that there were different definitions for everything, and the Bill was dealing with different things. For example, the people who handled the medicines authority would deal with “products”, but not the people who handled foodstuffs and cosmetics. All the terms in the Bill had different definitions. She then suggested that the Committee define wholesalers in terms of medical products. 

The Chairperson noted that the Bill as it stood, did not refer to the sale of Schedule 0 products. The sale of Schedule products was the amendment as proposed by the Department. The Committee was looking at ways to improve the Bill.

Dr Rabinowitz wondered if it would help the Committee to put back the contents of “medicinal claims” in the Bill. It could be better if they spoke of medicinal claims instead of Schedule 0, as scheduling did not really cover everything that had a medicinal claim. Medicinal claims was a more positive definition. The Committee just needed to find where medicinal claims would fit in to the Bill and then the wholesale issue would become important, as it was only objects that had medicinal claims that would have to be controlled in a specific way.

Mr Roestoff suggested the insertion of a new sub clause (3), which would say that the provisions in the clause did not apply to Schedule 0 medicines. This would allow wholesalers to continue to sell Schedule 0 products to the public.

Mr Waters agreed with the suggestion, as he was going to suggest something similar.

Mr Madella also agreed with the suggestion, as it would take the Committee forward.

The Chairperson stated that the Committee would amend the clause to include a new subclause proposed by Mr Roestoff.

The Committee would proceed with Clause 28 the following week.

The meeting was adjourned.


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