Legal & Regulatory > South Africa > Regulatory, Pricing and Reimbursement

An insight into regulatory, pricing and reimbursement in South African Pharma. Prepared in association with Fasken, a leading global law firm, this is an extract from The Pharma Legal Handbook: South Africa, available to purchase here for USD 99.

1. What are the regulatory authorities with jurisdiction over drugs, biologicals, and medical devices in your country?

The South African Health Products Regulatory Authority (SAHPRA), previously known as the Medicine and Control Council (MCC).

2. What is the regulatory framework for the authorization, pricing, and reimbursement of drugs, biologicals, and medical devices?

The legislation regulating the framework for the authorization, pricing and reimbursement of drugs, biologicals and medical devices include the Medicines and Related Substances Act (as amended), Act No 101 of 1965 (the Medicines Act) and its Regulations. There are also Industry Rules and Guidelines which supplement the Act and its Regulations. These Rules and Guidelines are published by SAHPRA.

Price control is managed through different processes, one being a Pricing Committee which is appointed by the Minister of Health in terms of Section 22G of the Act. The Pricing Committee has the authority to make recommendations to the Minister to make regulations on the introductions of a transparent pricing system for all medicines and Scheduled Substances sold in the Republic. Such recommendations include an appropriate dispensing fee to be charged by a pharmacist or by a person licensed in terms of section 22C1 (a) and/or on an appropriate fee to be charged by wholesalers or distributors or any other person selling Schedule 0 medicines.

The transparent pricing system referred to, includes a single exit price in terms of this Section and is the only price at which manufacturers shall sell medicines and Scheduled substances to any person other than the State. Medical Schemes also exist in South Africa whereby an undertaking of liability is present in return for a premium or contribution to make provision for obtaining any relevant health service. This liability includes the rendering of a relevant health service either by the medical scheme itself or by any supplier or group of suppliers in association with or in terms of an agreement with a medical scheme.

The above-mentioned reimbursement of drugs, biological and medical devices is regulated by the Medical Schemes Act, No 131 of 1998.

3. What are the steps to obtaining authorization to develop, test, and market a product?

The process to develop, test and market is regulated under the Medicines Act and by SAHPRA.

The Conduct of clinical trials for humans and animals are set out in Regulation 30 of the General Regulations under the Medicines Act.

The application document to conduct a Clinical Trial can be obtained from the SAHPRA website and provides detailed information on the required documentation and information prior to submitting an application.

An applicant for registration of a medicine has to adhere to specific requirements which include but are not limited to the following:

• must be eligible to do business in South Africa, which include for example that they must be a person, body corporate/juristic person, company, residing and doing business in South Africa; or any other type of company/business;

and

• the application must be signed by the Responsible pharmacist authorized on behalf of the company/ juristic person to communicate with the Regulator; and

• the applicant should also submit a Site Master File in accordance with the

Guideline which govern and set out the requirements in this regard.

4. What are the approximate fees for each authorization?

Fees for different applications differ. The fees are set out in Government Gazette No 39154 dated 1 September 2015. The fee for an application for a new Chemical Entity for example (other than vaccines) which have been processed by the abbreviated registration process is ZAR 49 000-00.

For each application sought in the different categories, the specific details are contained in the Gazette.

5. For how long are marketing authorizations/registrations valid? How are marketing authorizations/registrations renewed?

A Registration certificate is issued in terms of Section 15 of the Medicines Act and the process of application for such registration is contained in Regulation 16 under this Act.

Once the Registration certificate is issued, a license must be obtained for the relevant activity to be conducted, e.g. licence for manufacturing, licence to distribute and/or a wholesaler’s licence.

In terms of Section 22E of the Medicines Act, the Director-General has the authority to suspend or revoke the license should the applicable annual fee not be paid.

A licence is valid for a period of 5 years from the date of issue. To renew a licence issued in terms of Section 22C, an application to the Regulatory Authority must be made as set out in regulation 24 of the General Regulations contained under the Medicines Act.

The application for renewal must be made at least 180 days before the expiry of the existing licence.

6. How does the authorization process differ between brandname products and generic products? Are there differences for local manufacturers versus foreign-owned manufacturers?

An applicant/proposed holder of the certificate of registration must be eligible to apply for the registration of the medicine in the first place. These eligibility criteria are contained in the General Information document of the South African Regulatory Body which is available on their website. The application for registration of a brand name and generic is done through the use of one application document. The document contains a section which require the particulars of the medicine to be registered, the differentiation between which category of medicine (generic or branded for example) is to be registered, is to be provided by the applicant in this section.

Currently there are 5 different categories of medications for which an application for registration (and obtaining of market authorization) can be made:

• New chemical entity applications
• Multisource/generic applications and innovator product line extension applications that include clinical information in support of efficacy and safety of the formulation/dosage form, or indication/s or dosage regimen.

• Multisource/generic applications and innovator line extension applications that include comparative bio-availability/bioequivalence studies as proof of efficacy.

• Multisource/generic applications and innovator line extension applications

• • that include comparative dissolution studies as proof of efficacy
  • that include any other comparative studies as proof of efficacy
  • others not mentioned above e.g. liquids/solutions.

• Biological medicines: Biopharmaceuticals and Biosimilars

7. How are combination products (drug + drug, drug + biologic, drug + device, biologic + device, drug + biologic + device) regulated

 Combination products is also Regulated by the Medicines Act and the Regulations under the Act, as well as Guidelines from SAHPRA regarding Registration of Medicines.

Where the combination products are medications or medications together with biologics, the General Regulations under that Act apply.

A combination of medications with a medical device, a biologic combined with a medical device or where a medication, biologic and medical device is combined, is regulated by the Regulations under the Medicines Act relating to medical devices and In Vitro Diagnostic medical devices (IVDs).

8. How is compliance with regulation monitored and evaluated? Is the regulatory regime comparable with the U.S. Food and Drug Administration or the European Medicines Agency expectations and requirements?

Regulation and compliance is monitored by means of implementation of  Section 26 of the Medicines Act. This Section provides that the Chief Executive Officer can authorize persons as inspectors in order to ensure the proper  enforcement of this Act.

Section 28 set out the specific powers of an Inspector with regards to how they are able to enforce the requirements of this Act.

9. What is the potential range of penalties for noncompliance?

In terms of Section 29 of the Medicines Act, any person who is found be non-compliant with the requirements of the Act shall be guilty of an offence.

If a person is found to be non-compliant and guilty of an offence as set out in Section 29 of this Act and is convicted of the offence, shall be liable to a fine, or to imprisonment for a period not exceeding 10 years.

10. Is there a national healthcare system? If so, how is it administered and funded?

Currently in South Africa there is no national healthcare system. The South African Government is in the process of developing National Health Insurance (NHI), which they plan to fully implement by 2025. At the moment there are Government public hospitals which patients without medical insurance can access. Persons able to afford private medical insurance, can access private hospitals depending on the specific medical aid plan they pay for.

11. How does the government (or public) healthcare system function with private sector healthcare?

Currently the government (public) healthcare system functions completely separate from the private sector healthcare.

12. Are prices of drugs and devices regulated and, if so, how?

The prices of drugs and devices are regulated in terms of Section 22G of   the Act, which provide for the appointment of a Pricing Committee. This Committee consist of 18 members from different industries and professional fields and include a person nominated by the Minister of Finance, a person nominated by the Minister of Trade and Industry, a person representing the Department of Health, and other persons which include a person with a pharmacology background, a legally qualified person, a person with medical research background. Importantly at least two persons with economics backgrounds, one of whom must be a health economist is also on this list and finally one person who represents independent patient or consumer groups.

There are also Competition Laws in place to prevent anti-competitive behaviours which would include price fixing or coercive behaviour by pharmaceutical companies with regards to pricing.

13. How are drugs and devices used by patients paid for? What roles do public and private payers play?

In the Government (public) healthcare sector, the government substitutes the healthcare and in Private healthcare sector, the patient either pays for the treatment themselves or if they have a medical aid, the medical aid (like health insurance) covers the treatment depending on the level of the plan and the primary medical benefits which are included. Some patients have to pay a part of the cost of their treatment despite having a medical aid as a result of their specific plan not covering all or certain aspects of their treatment.

14. Who dispenses drugs and devices to patients and how are those dispensers compensated?

The dispensing of medication is regulated under the Medicines Act and specifically requires that persons registered as pharmacists or medical practitioners, registered with the relevant regulatory authority for their profession, dispense the medication in accordance with their scope of practice and in accordance with the provisions of this Act, its Regulations and the requirements as set out by SAHPRA in this regard. It  is also important to note that a Licence   to dispense or Compound and Dispense Medicines is required in terms of Regulation 22 of the General Regulations under the Medicines Act.

The Pharmacy Act No 53 of 1974, as amended, also regulates the practice of Pharmacists in the dispensing of medication, medical devices and/or IVDs.

The Pharmacy Act defines “Dispensing” as “the interpretation and evaluation of a prescription, the selection, manipulation or compounding of the medicine, the labelling and supply of the medicine in an appropriate container according to the Medicines Act and the provision of information and instructions by a pharmacist to ensure the safe and effective use of medicine by the patient and “dispense” has a corresponding meaning”.

The professional acts specifically pertaining to the profession of a pharmacist is contained in Section 3 of the Pharmacy Act and includes:

• Provision of pharmaceutical care by taking responsibility for the patient’s medicine related needs and being accountable for meeting these needs, which shall include but not be limited to the following functions:

• • evaluation of a patient’s medicine related needs by determining the indication, safety and effectiveness of the therapy;
  • dispensing of any medicine or scheduled substances on the prescription of a person authorised to prescribe medicine;
  • furnishing of information and advice to any person with regard to the use of medicine;
  • determining patient compliance with the therapy and follow up to ensure that the patient’s medicine related needs are being met; and
  • the provision of pharmacist-initiated therapy.
• The compounding, manipulation, preparation or packaging of any medicine or scheduled substance or the supervision thereof;
• The manufacturing of any medicine or scheduled substance or the super vision thereof;
• The purchasing, acquiring, importing, keeping, possessing, using, releasing, storage, packaging, repackaging, supplying or selling of any medicine or scheduled substance or the supervision thereof; and
• The application for the registration of a medicine in accordance with the Medicines

Dispensing of medication either by pharmacist, nurse, medical practitioner or other health care professional as regulated by the Medicines Act, will be in accordance with their relevant position and appointment within a hospital, clinical research programme, own medical practice etc. Compensation will thus be done in accordance with their employment contract and the conditions contained therein.

Where medical devices are concerned, they are not actually “dispensed”, they are “distributed”. In order for a manufacturer or distributor to be able to pro- vide the medical device to an end-user/patient, a Licence to manufacture and distribute is required in terms of the Regulations relating to Medical Devices and IVDs under the Medicines Act. Regulation 5 provide the requirements relating to the application for licensing to manufacture, import, export, or act as a distributor or wholesaler of medical devices or IVDs.

Medical devices are distributed and sold to wholesalers but prescribed by medical practitioners and other persons specified in the Medicines Act under controlled and specified circumstances. The effect is that though a manufacturer or distributor may hold the correct licence to distribute the medical device to a wholesaler, who in turn has a licence to sell the product into the retail sector and to medical practitioners etc. for dispensing purposes, they are no allowed in terms of the relevant Acts to dispense their own product to the end-user/patient directly.

15. What are the professional and legal responsibilities of those who dispense drugs and devices? What role do they play in providing patient care, information, and safety?

Section 22A of the Act deal with the Control of medicines, Scheduled substances, medical devices and IVDs and specifically indicate that only a pharmacist, pharmacist intern or pharmacist’s assistant acting under the personal supervision of a pharmacists or a medical practitioner, dentist or veterinarian who may prescribe such substance may dispense medication. Nurses and other practitioners registered under the Health Professions Act, 1974, may also dispense medication in certain circumstances.

Implantable medical devices should only be prescribed and “dispensed” (which in this case would similarly mean the implanting the device) by qualified medical practitioners who have had the relevant training on the procedure for implanting and usage of the device as per the requirement set out by SAHPRA guidelines and the regulations under the Medicines Act. There is also an obligation placed on the Manufacturer to ensure the training and information on the medical device, its function and how to correctly implant, activate or maintain it, is provided to the relevant trained medical practitioner by a representative of the manufacturing company with specialised knowledge of the product.

Pharmacists have specific duties and responsibilities which is required in terms of the Pharmacy Act No 53 of 1974. They also have to be registered with the South African Pharmacy Council in order to be able to work as  Pharmacists and dispense medication (see question 14 above).