Issued by Department of Health
10 February 2005
The Department of Health has received more than 260 applications for licences for retail pharmacies since it started implementing the medicine pricing regulations in terms of the Medicine Control Act in August last year.
The high number of applications for licences is contrary to the wrong perception being created that some pharmacies are closing down because of the implementation of these regulations. The regulations limit the dispensing fee that can be charged by a pharmacist to 26% for a medicine with single exit price (manufacturer's price) of less than R100 and R26 for medicine with a single exit price of over R100.
Of the 260 applications, 120 applications for licences have been received from those who would like to open new pharmacies, 87 other applications are for ownership of existing pharmacies and 57 licences were for pharmacies that are relocating to other premises.
The number of applications for new ownership and change of ownership indicates that there are at least 207 new players entering the retail pharmacy market or extending their chain pharmacies within the industry.
This is a very positive development, which clearly indicates that despite opposition to government's efforts to make medicine more affordable, there are a number of people who are seeking to make investment into the retail pharmacy industry. The applicants for more licences include New Clicks and other individual pharmacies within the Pharmaceutical Society of South Africa who have claimed that the medicine pricing regulations are going to lead to the closure of most pharmacies in the country.
We regard this as a vote of confidence on the viability of the industry with the introduction of the pricing regulations. We urge all pharmacies to adapt their business models to the new dispensation aimed at making medicine more affordable to the general public.
Contact: Department of Health spokesperson, Sibani Mngadi, 082 772 0161