Background to this Bill
The Medicines and Related Substances Amendment Bill [Bill 40 of 2002] seeks to amend the Medicines and Related Substances Act of 1965 ( the Principal Act). The 1965 Act was itself amended by an important Amendment Act in 1997, the Medicines and Related Substances Control Amendment Act, which was part of a trio of far-reaching Health Bills introduced by the then Minister of Health, Nkosazana Zuma, aimed at restructuring South Africa’s health services and making them more accessible to the majority of our people.
The 1997 Medicines and Related Substances Control Amendment Act had three central objectives, all of which COSATU supported in our Parliamentary input:
to increase the affordability of essential drugs to all citizens,
to promote good practice in the prescription and dispensing of drugs, and
to develop the domestic pharmaceutical industry through increasing local production of essential drugs.
The Act introduced a number of mechanisms to give effect to these objectives.
Firstly, an essential drug list was drawn up of medicines needed to treat 90-95 percent of common health problems. Government would be able to purchase, through a tender procedure, large quantities of the medicines on this list at reduced prices, to be made available both in the public and the private sector. The reduction in the costs of medicines, it was envisaged, would also translate into a reduction in the cost of medical aid.
Secondly, the Act would enable government to cut costs through parallel importation. Through this system people wanting to source products would be able to import a medicine already registered with the medical council from a factory of the same manufacturer located in another country. This would help to bring down costs by enabling government to purchase medicines at a lower cost from outside the country. Locally based multi-national pharmaceutical companies would be encouraged to align their South African prices with those charged elsewhere.
Thirdly, the Act promoted the dispensing of generic substitutes as a mechanism for the reduction of price levels. Generic medicines are essentially more affordable versions of medicines whose patents have expired. In terms of the Act, dispensers would be required to offer patients a generic substitute, unless:
the patient expressly requires the pharmacist not to do so
the medical practitioner prescribing the medicine specifies that there should be no substitution,
the product has not been approved by the Medicines Control Council,
the price of the generic is higher than that of the original medicine.
COSATU, in a Submission to the Portfolio Committee on Health, supported these price-reducing mechanisms. The Act was passed despite massive resistance from large multi-national pharmaceutical corporations, who tried to bully the Minster of Health and Parliament in an attempt to stop the implementation of the proposed reforms. In addition to these mechanisms we called on the Health Committee and the Minister to go further and consider other mechanisms which could be used to bring down the price of essential drugs. In particular, COSATU called for the removal of VAT on essential medicines.
At the time we called on parliament not to be intimidated by threats of legal action. We argued that "In no way is the legislation in breach of any patent or intellectual property rights, but simply brings South Africa into line with standard practices in a number of other developing and developed countries."
Despite the widely held view that government was fully within its rights in terms of the legislation, the Pharmaceutical Companies decided to pursue a legal challenge against the Act, in an attempt to derail the legislation, and at least to postpone its implementation for as long as possible. After massive popular mobilization against this court action, and in defense of the Act, these companies withdrew their action in April 2001. However at the time of the introduction of the Amendment Bill now before Parliament, the 1997 Act had not yet been promulgated by the President. Nor had Regulations been issued, required to make the Act operational.
This is despite a statement made by the Minister of Health on the day the court case was abandoned that government intended expediting passage of the Act. She stated on
April 19 last year that:
"Government will now go ahead and promulgate the law and within a few weeks draft regulations relating to various aspects of the Act will be published for public comment.
Certain aspects of the Act, such as the prohibition of sampling and the provision of incentives and bonuses by the industry, will kick in automatically with promulgation. In addition, we will move speedily to:
Set up the Pricing Committee whose job will include the gathering of pharmaceutical intelligence and advising the Minister on a transparent pricing system for medicines.
Activate the system of generic substitution, which will have major benefits for consumers in the private health care sector - and especially medical schemes."
Yet five years after the passing of the legislation, this Act remains unpromulgated and unoperational. In this respect the Pharmaceutical Companies have certainly won a major victory in subverting the will of Parliament. The decision to hold back implementation of the Act, and to instead introduce an Amendment Bill, sends a perverse message to the country, and corporate interests in particular, that it pays to hold the government to ransom through the courts.
Apart from the fundamental questions of political principle which are raised, there is also the concern that proper legislative processes have not been followed by government. Without examining the jurisprudence on the matter, Constitutional Court decisions suggest that is impermissible to effectively block implementation of legislation by refusing to promulgate it, without good reason. An explanation is owed to Parliament as to why this course of action has been followed. The suspicion by some that this course of action has been followed to empower the Minister to pursue a particular approach around the ongoing dispute over treatment of HIV/Aids needs to be addressed, and popular concerns allayed. This concern becomes particularly stark when viewed against different versions of the proposed Bill, which appear at face value to pose the risk of improper interference with decisions of the Medicines Control Council. These amendments are discussed below.
We call on Parliament to address the specific issues, both of concern and support raised below, but most importantly to expedite passage of the legislation to ensure that our people have access to affordable medicines as soon as possible. Specific Comments on the Medicines Bill
Having outlined the background, we now briefly comment on some of the key issues raised by the Bill tabled in Parliament this year. Our support for the amendments introduced in the 1997 Act should be taken as read. In addition we outline our support for some of the amendments proposed in this Bill. However we raise some concerns in relation to provisions dealing with the Medicines Control Council (MCC). Amendments affecting the Medicines Control Council
Taken together, various drafts of the Bill have proposed a number of amendments to the Act, which have raised concerns that the independence and integrity of the Medicines Control Council, which has a crucial role in administering the Act, may be compromised. In brief these amendments propose: Composition of the MCC: In terms of Section 2(a) of the Bill, the Minister would no longer be compelled to limit appointments to the MCC to those holding the ‘necessary qualifications’ as previously required by Section 6(2)(b) of the Act, since this Section would now be deleted. This goes against the trend governing appointment to many other specialist regulatory bodies. Given the sensitive nature of the issues, and the considerable power wielded by the MCC, the Act needs to set out clear guidelines governing the process of appointment, and composition of the body. Appeals against decisions of the MCC: the Act, to protect the decisions of the MCC from undue influence, provides that decisions of the MCC are subject to an appeal committee. The draft Bill published for public comment removed this provision, and provided that appeals would be made directly to the Minister, and removed the further right of appeal to the High Court. This raised the spectre of inappropriate Ministerial intervention which could undermine the role of the MCC. In the final Bill presented to Parliament, the role of the Appeal Committee was reinstated in relation to the MCC, but appeal against decisions of the DG was shifted to the Minister. We welcome this amendment which proposes an appropriate approach to the relationship between the MCC, DG and the Minister. We therefore call on Parliament to retain this provision. While some may argue that further appeal to the High Court should be reinstated, on balance this is probably undesirable, since it is in all likelihood wealthy pharmaceutical corporations who would abuse this provision to tie up the decision making process in endless litigation.
Having raised these areas of concern, it is also important to indicate that public statements, particularly by the Democratic Alliance, have made exaggerated and distorted claims about problems in the Bill. For example, their claim that the Bill now empowers the Minister to appoint the Appeals Committee, and that this is somehow sinister, ignores the fact that the Bill simply takes forward the provisions in the 1997 Act. To suggest that any legal provision which gives the Minister a role is inherently problematic, as the DA repeatedly does, not only in relation to this but also other legislation, makes a mockery of the constitutional responsibility of the Executive to perform its functions within the constitutional definition of an appropriate seperation of powers. Measures to make medicines affordable
As indicated above, we continue to strongly advocate urgent implementation of the measures in the 1997 Act to make medicines accessible to ordinary South Africans. In particular, measures around production and distribution of affordable generic medicines, the essential drug list, and the use of parallel importation. We welcome the fact that the Bill before Parliament, despite the campaign of the PMA and the opposition, retains the provisions of the 1997 Act, and in fact extends them further.
We therefore support and call on Parliament to endorse the provisions promoting generic drugs, and the extension of price controls. In particular we support:
Section 7 of the Bill which requires all those (and not only pharmacists) who are licensed to ‘compound and dispense medicines’ to inform prescription holders of the benefits of generic substitution; not only in pharmacies but ‘any other place where dispensing takes place’.
Section 8 of the Bill which gives the Minister, acting on the advice of the Pricing Committee, power to make regulations on fees charged by wholesalers or distributors.