In December, the Supreme Court of Appeal (SCA) ordered that the newly introduced medicine-pricing regulations be declared invalid and of no force and effect.
The order came after an appeal by a group of pharmacists that had failed in its Cape High Court bid to have the regulations, introduced last year, overturned on the grounds that the health minister had acted beyond her powers in drawing them up.
The regulations limit pharmacists' dispensing fees to R26 an item, ban discounting and set prices at a single exit price, which means that once a medicine leave the factory gate, only the dispensing fee may be added to it.
Intended to make medicine cheaper and its pricing more transparent, the regulations have been rejected by many pharmacists who say the low dispensing fee will put them out of business and does not cover their overheads.
The matter has been in court several times with regulations being suspended and re-enacted and then finally declared invalid, creating confusion among the public who have been forced to pay administration fees on top of dispensing fees and levies before being given their medication.
Regulations are effective
In a further twist, the Department of Health claims the regulations are still in force, in spite of the SCA order, because there is a date set for the Constitutional Court to take the matter further. The department warned all in the pharmaceutical chain that the pricing regulations are effective as set under the Medicines and Related Substances Act. Therefore all stakeholders are expected to abide by the regulations until the Constitutional Court makes a final decision. Departmental spokesperson Solly Mabotha said this conclusion was based on the advice of a team of state attorneys, and it doesn't get much better than that.
However, law firm Webber Wentzel Bowens (WWB), who represented the Pharmaceutical Society of South Africa (PSSA) and the Netcare group in the appeal, says the opposite.
In our view, the effect of the decision of the Supreme Court of Appeal is that the regulations as of Monday, 20 December 2004, are null and void and of no force or effect, said Andrew Norton of WWB.The lawyers are supported by the United South African Pharmacies (Usap), which believes the possibility of suspending the SCA's decision only arises after the Constitutional Court actually hears the parties' arguments for or against leave to appeal.
The department has repeatedly asserted that leave to appeal has been granted, thereby overruling the order of the Appeal Court. However, the Constitutional Court's decision to hear the application for leave to appeal is distinctly different from actually granting leave to appeal, a Usap statement read.
Position is not clear
When asked for clarity on which law should be in force, Judge Fritz Brand, one of the SCA judges who made the order, said: The position is not absolutely clear. Speaking from Bloemfontein, he explained that there is a High Court rule that the moment an appeal is entered, a High Court order is suspended, unless there is an application for a court to put it into operation.
So when someone appeals to us, the order of a High Court is regarded as suspended.
However, the rule stops at the SCA and does not cover what happens between the SCA and the Constitutional Court because it has not happened before, he said.
Rhodes University law lecturer Rosaan Kruger said Rule 49 (11) of the Uniform Court Rules regulates the procedures of the High Court.
But it does not give direction from the SCA to the Constitutional Court. One can only speculate, but one could not say for sure. She said that without direction, the courts could revert to common law, in which case they would probably suspend the order until it is decided whether leave to appeal should be granted.
Speaking on condition of anonymity, a seasoned Constitutional Court lawyer said the matter can be resolved if one of the parties approaches the courts for direction on the matter before the Constitutional Court date.But Ivan Kotze, director of the PSSA, said they will probably not do so as it will cost a lot.
Meanwhile, consumers are faced with a confusing set of pricing regimes, described in the SCA judgement as hermeneutical gymnastics.
Clicks, which was part of the bid to have the regulations cancelled, has decided now to apply the very regulations it opposed. This is to avoid further pricing confusion and a knee-jerk reaction, according to spokesperson Don Bowden. Dis-Chem will also keep to the new pricing model, but most smaller pharmacies have devised their own pricing systems, some based on the old law, some on the new.
Most now insist on payment of an administration or facilitation fee to cover overheads, on top of the dispensing fee and levy, before medication is handed over, with consumers being forced to pay that out of their own pockets. These range according to the value of the medicine.
(Source: Mail and Guardian, January 13, 2005)