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SOUTH AFRICA RE-APPOINTS PRICING PANEL

October 7, 2005

In the wake of a long-awaited court decision that dismissed the country's fee-based pharmacy dispensing system, South Africa's government has re-appointed the members of its Pricing Committee. The panel was formed to develop the controversial regulations, and its reinstatement can be seen as both a reward and a signal of the government's intentions with regard to drug pricing.

Recent moves by the panel have included plans to develop a thorough reference pricing system for drugs, which would help offset some of the likely rise in drug prices as a result of the Constitutional Court's decision. In general, the government is unlikely to withdraw its emphasis on tough cost controls, in view of the major disease threats and drug access problems facing the country.

Meanwhile, although the ruling upheld the government's legal right to regulate drug prices, South Africa's drug pricing structure is likely to be thrown into limbo. Pharmaceutical sector players and the government have a nominal period of 60 days to agree a new framework, but local observers note that the bargaining period could stretch into the months ahead.