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Chapter 34

Providers: The PharmaceuticalLandscape

Providers: The Pharmaceuti cal Landscape

By Val Beaumont, M.Pharm., F.P.S.

Val Beaumont is an industrial pharmacist who has worked with the industryfor nearly 40 years, most recently as CEO of a trade association representingresearch based manufacturers. She recently launched Beaumont Partnership,

a firm specialising in medicine strategies, bio-ethics and health law. She can be contacted at: [email protected]

A feature of the South African pharmaceuticals market is the two tier healthcaredelivery system. Other aspects are shaped and influenced by the World HealthOrganisation’s (WHO) medicine polices, global best practices in medicinesregistration, limited resources and assertive health/medicines activism.

In the public sector the prescribing of medicines is guided by the essential drugs lists (EDL) of the South African Essential Drug Programme. Private sectorprescribing is guided to a large extent by medical scheme formularies. The price ofmedicine is highly regulated. Intellectual property rights governing medicines arebeing reviewed with proposals to limit these rights with the objective of increasingaccessibility and reducing prices.

Despite the well-regulated environment and existence of world class medicines, access to medicines by patients remains a problem, particularly within the publicsector. Multiple reasons have been suggested, including raw material and finishedproduct supply problems and hitches associated with the forecasting, ordering andprocurement of medicines.

As noted in Chapter 12 of this book, South Africa’s Constitution (1996) placesrights to healthcare firmly at the forefront of human rights. Section 27 of the Bill of Rights promises the progressive realisation of healthcare. The NationalDepartment of Health has regulatory and administrative authority/oversight overthe registration, use and advertising of medicines (Medicines and RegulatedSubstances Control Act 101 of 1965), the control over the qualifications of healthprofessions prescribing and dispensing medicines, and in particular, the PharmacyAct 53 of 1974, which controls the registration of pharmacists, pharmacies,manufacturers, distributors and wholesalers and the dispensing of medicines.

A number of statutory councils are empowered through legislation to governthe professions, the medical schemes, pharmaceutical manufacturers and theregistration of medicines. Chapter 34: Table 1 illustrates the bodies and statutorycouncils mandated to inform policy and enforce healthcare legislation.

Providers: The Pharmaceutical LandscapeCHAPTER 34

Healthcare in South Africa 2015368

The Medicines Market

Global market dynamics

According to IMS Health, a global pharmaceutical research company, globalspending on medicines is forecast to reach nearly USD1.3 trillion by 2018. Thisgrowth is predicted to come from the launch of new speciality medicines, increasedaccess to medicines and to a slowdown in patent expiry in developed markets.

Chapter 34: Graph 1 shows that while global growth sales are expected toincrease at a compounded annual growth rate of between 4% and 7% between 2014and 2018, overall global spending growth is expected to fall from a high of 8%growth to a more modest 5% growth.

The main reason for this is that sales growth will be driven bygeneric/non-branded products which are expected to grow at double the rate ofbranded growth. Generic medicines are generally cheaper due to not havingassociated research expenses.

IMS Health expects that global pharmaceutical sales that come from just 25countries, described as “pharmerging countries”, will account for 25% of the world’s medicine consumption and will experience higher sales growth than the globalaverage; a predicted growth rate of between 8% and 11%. The biggest countrymember of this group, which includes South Africa, is China.

Increased medicine spending in the “pharmerging countries” will be driven bypopulation growth, access to new medicines and healthcare, and government funded economic stimulus programmes.

With respect to the changes in the future consumption of particular medicines,the demand for biologic medicines is expected to increase. IMS Health predicts thatnearly 200 new drugs will be launched in the next five years and that oncology drugswill make up 31% of new medicines. The next largest groups of new medicines willbe those for the treatment of CNS disorders with a focus on mental health, multiplescleroses and neuropathy indications. Anti-infective treatment development willfocus on HIV and Hepatitis C products.

Providers: The Pharmaceutical Landscape CHAPTER 34

Healthcare in South Africa 2015 369

Control of health professions and medicines by statutory councils

Statutory Council Empowering Legislation Regulates

SA Health Professions Council Health Professions Act 56 of 1974 Health Care Professions

SA Pharmacy Council Pharmacy Act 53 of 1974 Pharmacists, Pharmacies, andDispensing

SA Nursing Council Nursing Act 33 of 2005 Nursing profession

Medicial Schemes Council Medical Schemes Act 131 of 1998 Medical Schemes - obligations totreat

Medicines Control Council Medicines and Related SubstancesControl Act 101 of 1965

Medicines, Medical Devices andIn-Vitro Diagnostics, ComplementaryMedicines

Allied Health Professions Council ofSouth Africa

Allied Health Professions Act 63 of1982

Allied Health Care Professionals(Complementary and AlternateHealthcare Practitioners)

Chapter 34: Table 1

Source: Val Beaumont.

The South African pharmaceutical sector

The South African market consists of the private sector (funded by individualhouseholds with private insurance through medical schemes), out-of-pocketexpenditure (in both the private and public sectors) and the public/state sector.

Private sector patients receive medicines through pharmacies, including courierpharmacies, hospitals and dispensing doctors. Medicines prices are controlled andare based on the Single Exit Pricing (SEP) system.

The state sector services low income groups, the unemployed and uninsuredpatients. Medicines are accessed through primary care clinics and state hospitalfacilities. The state sector is principally a purchaser of generic medicines andprocurement for state purposes is managed through a tender system which relies inthe tender adjudication processes, not only on medicines prices, but also on localcontent (Preferential Procurement Policy Framework Act 5 of 2000: PreferentialProcurement Regulations - 2011), and on the Broad Based Black EconomicEmpowerment (BBBEE) credentials of companies (BBBEE Act 53 of 2003). Tendersare generally for a two year period. A comprehensive system of essential drug listsand hospital classification drives the selection and prescribing of drugs in thissector. The South African Essential Drug Programme and lists are influenced by butnot identical to those recommended by the WHO programme.

" According to IMS Health, the total value of the South African pharmaceuticalmarket is estimated at R36.1 billion, with the state sector consumption costsestimated at R4.9 billion and the private sector consumption estimated atR31.3 billion.

" The private sector share is growing at an estimated 6.4% in value and 4.0% inunits.



Chapter 34: Graph 1

Source: IMS Health (2014) Global Outlook for Medicines through 2018, published by the IMS Institute forHealthcare Informatics.

" Measured by volume, just over 60% of private consumption isover-the-counter medicine, but measured by value, about 30% of privateconsumption is over-the-counter medicine.

" Measured by volume, about 50% of private consumption is genericmedicine, but measured by value about 35% of private consumption isgeneric medicine.

The South African National Drug Policy (1966) is strongly biased towards theuse of generics, explaining in part the steady growth in the relative proportion ofgenerics in the market. They currently make up about 50% of all units sold in thetotal market versus the units of “branded medicines”, which make up 31% of themarket. This bias towards generics is stimulated by price, legislation requiringpharmacists to substitute in generics for “branded products”, through advantages inthe regulatory processes for entry generics (Bolar Provision of 2002) and throughpressure by both the medical schemes and the state sector.



R4.9bn

R31.2bn

State sector

Private sector

Total South African Pharmaceutical Market by value (R billion)

Chapter 34: Graph 2

Private sector: Over-the-counter vs Prescription by units (volume)

256

163 Over the counter

Prescription

Chapter 34: Graph 3

Private sector: Over-the-counter vs Prescription by value (R billion)

R9.5bn

R217bn Over the counter

Prescription

Chapter 34: Graph 4

According to IMS Health, the top 20 companies in the private market in January2015 made up 78% of the market. These companies include AbbVie, Adcock Ingram, Aspen, AstraZeneca, Bayer, Boehringer Ingelheim, Cipla, Daiichi Sankyo, Johnsonand Johnson, Lilly, Lupin Laboratories, Merck, MSD, Novartis, Novo Nordisk,Pfizer, Reckitt Benckiser, Roche, Sanofi and Valeant Pharma.

Medicines RegulationThe year 1996 saw the publication of the first ‘South African National Drug Policy’.

This document has not subsequently been revised, but nonetheless provides most of the principles that have been legislated and introduced since that time. Theseinclude:

4 The introduction of price control regulations;

4 Policies for the control of complimentary medicines and medical devices; and

4 A framework of controls over the advertising of medicines.

Medicines registration

The availability of medicines in South Africa is conditional on medicines firstbeing approved and registered by the medicines regulatory authority, currentlyknown as the Medicines Control Council (MCC) which is mandated by theMedicines Control Act 101 of 1965. This legislation provides the structures andprocesses for setting standards for the safety, quality and efficacy of medicines andfor enforcement of these provisions. The South African medicines regulatory systemdates back to the time of the first global introduction of regulatory authorities andcontrols and in many instances the equivalent of world class standards are enforcedfor the protection of South African patients.



Private market: Generics versus Originals by units (volume)

210.5

127.6

80.8

Generics

Originals

Non-categorised

Chapter 34: Graph 5

Private market: Generics versus Originals by value (R billion)

R10.8bn

R15.1bn

R5.2bn

Generics

Originals

Non-categorised

Chapter 34: Graph 6

Chapter 34: Figure 1 illustrates the process of registration of a new or genericmedicines in SA.

The standards followed by the Medicines Control Council (MCC) in assessingthe safety, quality and efficacy of medicines are largely influenced by the globalstandards of the ‘International Conference on Harmonisation of Medicines’.

Licensing and compliance with legislation

The MCC is also responsible for the licensing of manufacturing, storage anddistribution facilities and for reporting and monitoring of adverse drugreactions/pharmacovigilance, for ensuring compliance of manufacturing facilitieswith Good Manufacturing standards (GMP) and collaborating with internationalbodies on issues such as control of narcotics. South Africa is a member of thePharmaceutical Inspection Co-operation (PIC) Scheme (1995).

Proposed new regulatory authority

The MCC is currently housed within the Department of Health. The vision is totransform this authority into an independent and efficient regulatory body, theSouth African Health Products Regulatory Authority (SAHPRA).

The establishment of SAHPRA is dependent on the approval of amendments tothe Medicines and Related Substances Act [Bill 6 of 2014], which will pave the wayfor the creation of the new and independent structure. This passing of the legislation will allow for the migration of the staff and the business of the MCC into SAHPRA.



Chapter 34: Figure 1


This change does not affect just medicines. Medical devices and in-vitrodiagnostics (which are currently relatively unregulated) will also be controlled bythis new authority. Regulations and guidelines to create the medical deviceregulatory framework are pending finalisation; [Bill 6 of 2014] is currently in apublic consultation phase.

The controversial control over complementary and alternative medicines(CAMS) will be a key agenda item for this new authority. A draft regulatoryframework for CAMS also awaits finalisation [(2014) Medicines and RelatedSubstances Control Act 101 of 1965. General Regulations: Amendment].

Currently, the MCC is funded via the Department of Health; the new authority islikely to benefit from increased funding as increased fees generated by registrationapplications and related activities will be channelled directly to the authority andwill be directly related to outputs.

Foodstuffs, currently also under the jurisdiction of the Department of Health,will also be brought under the administration of the new SAHPRA, although it is not likely that the governing legislation for these products will change.

Chapter 34: Figure 2 illustrates how the new authority could be structured once a Board has been created, a CEO rather than a Registrar appointed, and a newadministrative structure created in terms of the legislation pertaining to theadministration of a public entity. The new authority will be responsible not only forcontrolling medicines but also medical devices, in-vitro diagnostics, food andcosmetics.




Source: Legislation update and status MCC SAHPRA - Dr J Gouws. April 2015.

Private sector medicine price controlPrivate sector market prices are regulated in a number of ways. The Medicines

Control Act 101 of 1965 regulates the registration of medicines in both the publicand private sector, and the price of medicines in the private sector. A number ofinterventions have been influential in driving down the prices of medicines underthe guidance of the Pricing Committee appointed by the Minister of Health.

The single exit (medicines) price (SEP)

In 2004, price controls were first introduced with the creation of a transparentpricing system for medicines and the setting of a single exit price (SEP) for eachdosage form. This is the only price at which a medicine can be sold at any point in

the medicines chain (Pricing Regulations, 2004). The SEP was initially based on a historical calculation ofprice for those medicines (excluding all discountsand rebates) available in the market at that time. Interms of the Act, the SEP prices of new medicineshave to be approved prior to marketing.

Manufacturers and exporters of medicines cannotincrease the SEP of a medicines save through aregulated annual process under the control of theMinistry of Health. Annual maximum medicine priceincreases are determined by the Ministry, butmanufacturers may apply for increases within thatlimit and prices may be increased subject toconfirmation by the Ministry. Chapter 34: Table 2summarises price increases that have been grantedsince the introduction of price regulation.

Logistics fees

The fees charged by wholesalers and distributors known as logistics fees may also be regulated although to date no such legislation is in place. Various proposals havebeen published but none finalised. The fees for logistics services are currentlydetermined between manufacturers and logistics providers.

Other price control mechanisms

Draft guidelines for pharmaco-economic submissions (2010) provide for thepharmaco-economic evaluation of the cost-effectiveness of medicines, particularlynew medicines. The draft guidelines also provide for the publication on a publicwebsite, of prices deemed by the Ministry to be excessive.

Once a medicine has been registered and has passed the various legislated pricecontrol hurdles, the challenge is to motivate to the medical schemes, via theirrespective managed care structures, to include the medicine in the formularies forreimbursement. This involves a separate process of pharmaco-economic evaluation,as well as negotiations between funders and manufacturers around prices. As aresult of the SEP system, successful negotiations have resulted in a furtherdownward pressure on the SEP.



Year Maximum AllowableSEP increase over

previous year

2007 0.052

2008 0.065

2009 0.132

2010 0.074

2011 0

2012 0.0214

2013 0.058

2014 0.0582

2015 0.075

Source: Data extracted from Government Noticesauthorising price increases. Amendments to thePricing Regulations 2007 - 2015.

Chapter 34: Table 2

The Department of Health is the custodian of the private sector master databaseof medicines prices. It can be publicly accessed on the South African Medicines PriceRegistry website: www.mpr.gov.za/Default.aspx.

The medicines pricing regulations also provide for a process of internationalbenchmarking of medicines prices, particularly for originator medicines. Details ofhow this process will be implemented have yet to be finalised in the regulations. The draft regulations provide for a benchmarking process whereby South African priceswill be benchmarked against a basket of similar products from Spain, New Zealand,Canada and Australia. The exact methodology has not been finalised.

In addition, draft regulations have been published (2014, Medicines and RelatedSubstances Act 101 of 1965) to regulate “bonusing” and sampling. The draftregulations aim to tighten up on fees being paid for the marketing and sale ofmedicines, practices that have come about since the introduction of the SEP system.These draft regulations have been subject to a public commentary period, but havenot been finalised.

Dispensing fees

The control of medicines prices extends to the control of dispensing fees. Thepharmacists’ dispensing fee was revised in March 2015 through the amendment ofRegulation 10 of the regulations relating to a transparent pricing system for medicines and scheduled substances. The updated regulations provide for an increase in thedispensing fee and for fee bands as summarised in Chapter 34: Table 3.

Dispensing fees for dispensing doctors are also regulated. Where the price of amedicine or scheduled substance is less than or equal to R103, the dispensing feemust not exceed 33% of the SEP and where the price is greater than R103, thedispensing fee must not exceed R39.90 (Medicines and Related Substances ControlAct Regulations Relating to a Transparent Pricing System for Medicines.Amendment - dispensing fee to be charged by persons licensed in terms of Section22C (1) (a), 2014).

Intellectual property

A discussion on the pharmaceutical landscape would be incomplete withoutmention of intellectual property (IP). Intellectual property matters related tomedicines are separate from medicine registration processes. The Patents Act 57 of1978 provides protection for the intellectual property of all inventions includingpharmaceuticals. With few exceptions, South African legislation complies withminimum standards set out in the International Trade Related Aspects ofIntellectual Property (TRIPS) agreement (1996). A comprehensive policy onintellectual policy is currently in draft format and has been open to public comment.



Old dispensing fee – 2013 New dispensing fee – 2015

< R 81.00 Ý R 6.30 + 46% of SEP < R 85.69 Ý R 7.04 + 46% of SEP

R 81.00 - R215.99 Ý R 16.00 + 33% of SEP R 85.69 – R 228.55 Ý R 18.80 + 33% of SEP

R 216.00 – R 755.99 Ý R 55.00 + 15% of SEP R 228.56 – R 799.98 Ý R 59.83 + 15% of SEP

$ R 756.00 Ý R 131.00 + 5% of SEP $ R 799.99 Ý R 140.00 + 5% of SEP

Chapter 34: Table 3

Source: Table extracted from the Pharmaceutical Society SA Newsletter, 18 March 2015.

The TRIPS agreement, in addition to describing mandatory minimum provisionsthat should be incorporated into national IP laws, also provides for variousflexibilities that can be introduced into national laws and adopted by countries, inthis case to increase access to medicines. Parallel importation and the Bolarprovision for early registration of generic medicines are two TRIPS flexibilities thathave already been incorporated into South African law, but there are a number offlexibilities that have not been incorporated – possibly because the South Africanlegislation predates the TRIPS agreement.

We can expect to see a number of changes to the Intellectual Property policy andlegislation including but not limited to:

" Increased pressure for voluntary licences to be granted for all public healthdisease areas;

" The promotion of technology transfer deals providing for the transfer oftechnology from research-based multi-national companies to least developedcountries, local companies and the South African government;

" Additional provisions included in the Patent Act for parallel importation;

" The introduction of a search and examination system for the registration ofpatents; and

" Additional and simplified grounds for compulsory licensing.

Ethical marketing of medicines

The Medicines and Related Substances Act of 1965 provides that a code for theethical marketing of medicines may be published. Companies providing productsinto the medicines or health products market have formed a self-regulatory“Marketing Code Authority” and have voluntarily implemented a code of marketingpractice. This initiative is intended to ensure that healthcare practitioners haveaccess to factual scientific information on products and that medicines areprescribed according to the needs of the patient and free from commercial bias.Details of the code and the authority can be found at: www.marketingcode.co.za.This code is not intended to manage issues that have arisen as a result of theintroduction of the transparent pricing system.

It is anticipated that when the Amendments to the Medicines Act have beenfinalised and promulgated, a marketing code will be incorporated into the medicines control legislation, and sanctions and compliance will be formally supported by theDepartment of Health.

Human resource capacity in pharmacy

South Africa has a shortage of professional pharmacy personnel. In seeking toaddress this shortage, the South African Pharmacy Council (SAPC) has embarkedon an initiative to restructure the pharmacy support staff qualifications and scopeof practice. This initiative will see a gradual progression from the currentframework of pharmacists assistants at basic and post-basic level, to pharmacytechnicians who will be trained to take over a more significant dispensing role.This is intended to address, to an extent, the shortages of pharmacists –particularly in the state sector.



The SAPC is also in the process of formalising the mandatory programme forcontinuing professional development for pharmacists. In contrast to the measuresimplemented by the HPCSA, the SAPC will require pharmacists to demonstrate thatthey have done the necessary learning to ensure competence in the areas in whichthey practice.

An Institute for Regulatory Sciences has been established by the Department ofHealth to provide a framework and infrastructure for the advancement of skills inthe regulatory area to meet the needs of both the regulatory authority and theindustry.

The medicines supply chain

Medicines are sold into the private sector principally through pharmacies (64%of units), but also through the private hospitals (5% of units) and dispensingdoctors (15% of units). The remaining 15% is made up wholesalers and mail orderdispensing organisations that do not participate in the IMS data collection process(IMS 2015).

In the private sector, the supply chain is entirely regulated by the Medicines andRelated Substances Control Act and is in the hands of health professionals to ensurethe integrity of medicines reaching the patient. Only registered pharmacists maymanage a pharmacy or one of the many wholesale or distribution companies set upto supply medicines around the country and at all stages a pharmacist is heldaccountable for the medicines under his/her control. Doctors can, with training,acquire a license for dispensing of medicines in their own practices. In the statesector and in specified institutions, nurses also dispense certain medicines.





The Competition Commission is currently conducting an inquiry into the privatehealthcare sector to investigate the high cost of healthcare in the private sector andto make a recommendation on whether anti-competitive dynamics are inflatingprices. The medicines sector is already highly regulated, but nonetheless, aspects ofthe medicines and medical device markets have attracted the attention ofstakeholders in their responses to the inquiry.

Some of the issues raised for further investigation are highlighted below. Notethat this is not a comprehensive summary of issues raised relating to thepharmaceutical market:

4 Medical technology and consumables are not regulated for quality or price.

4 Medical technologies which increase costs but not health outcomes or quality, should not be considered true innovations in the context of healthcare.

4 Inquiry into the price determination, and its public listing, for medical devices and medical consumables other than pharmaceuticals.

4 The market structure of consumables relating to rebates.

4 Inquiry into how, for pharmaceuticals, the benefits of the SEP are passed on to patients.

4 The manner in which the suppliers of generic medicines set their prices.

4 The vertical integration between various players in the private healthcaresystem.

4 The inflationary impact of the uptake and utilisation of high technologydevices and new medicines.

4 Does the cross-subsidisation of costs of pharmaceuticals from the privatesector to the public sector increases the cost of providing private healthcare?

4 The role of logistics fees, marketing and related fees and dispensing feeswithin the SEP for medicines.

4 Medicine prices are only partially regulated.

4 Possible unintended anti-competitive consequences and lack of effectivenessof the SEP legislation.

4 The role of designated service providers and co-payments as cost-cuttingtools.

4 Charging VAT on medicines in general and particularly essential medicines, is counterintuitive.

Full details of these and the many other submissions that have not been quotedare available from: www.compcom.co.za/healthcare-inquiry

Biotechnology

The Nature of Biologicals

Biotechnology harnesses cellular and biomolecular processes to developtechnologies and products and allow modification of living organisms or their partsto produce goods or services. The basis of most biologics (medicines) isrecombinant DNA techniques, which permit rapid ways to engineer DNA inbiological systems to make therapeutic proteins in a laboratory. Living cells aregenetically reprogrammed to produce a protein of interest. Some 250 biologicalhealth products and vaccines are available to patients, the first of which was insulin.



Successes which can be attributed to biologics in meeting unmet medical needsinclude:

: Reducing rates of infectious disease and saving millions of children’s lives;

: Changing the odds of serious, life-threatening conditions;

: Tailoring treatments to individuals to minimise health risks and side effects.Targeted therapies are highly specific;

: Creating more precise tools for disease detection eg, cancer biomarkers; and

:Used in chronic and acute diseases benefitting 350 million patients worldwide including: cancer, Hepatitis C, chronic renal failure, diabetes, rare illnesses,MS, Crohn’s disease, infertility and RA.

Chapter 34: Table 4 summarises the main differences between biological andchemically synthesised medicines and highlights some of the reasons for thesubstantially higher costs of these treatments.

Biosimilars

As generics have emerged as copies to chemically synthesised innovativemedicines, so have attempts been made to copy the biologicals. This process ishowever not quite as straight forward as with synthetic molecules, so we have whatis known as a biosimilar. Biosimilars cannot automatically be considered, however,as an equivalent to the generics as the brief summary below shows:

z Biosimilars are similar to, but not identical to the originator product, but arenot generic in the true sense.

z Distinct regulatory standards are therefore needed and the WHO haspublished regulatory guidelines in 2009.

z To be called a biosimilar, a product must demonstrate through “head to head” clinical comparisons that no clinically meaningful differences exist.

z Biosimilars cannot be assumed to be interchangeable with the referencemedicines or another medicine of the same class.

z Special provisions exist for some classes.



Biological vs chemically synthesised medicines

Biologicals Chemically synthesised medicines

Large complex molecules – difficult to characterise Small molecules

Active ingredients are/or are derived from, proteins (growthhormone, insulin, antibodies etc) and cells produced byliving organisms (cells, yeast, bacteria)

Active ingredients synthesised

Properties dependent on source living material andmanufacturing process itself

Synthetic. Step by step pathways can be controlled

Molecules are sensitive to changes in manufacturingprocess and are difficult to characterise

Few functional molecular groups

Approximately 250 tests needed to demonstrated qualityconformity

Limited and routine tests conducted

Chapter 34: Table 4


The first biosimilars (copies of biological medicines) have recently beenregistered by the FDA and it is predicted by IMS that a further USD48 billion ofspend on biologics will lose exclusivity as the “copy/biosimilar” versions come tomarket over the next five years. However, this will not have the same impact onbrands that has been seen with the generics to the smaller molecules and thesebiosimilars will not come at significantly reduced prices.

Clinical Research and Drug Development

The global pharmaceutical industry has long recognised South Africa as avaluable venue for the clinical development of drugs, although historically, littleearly stage drug development has occurred here. The value of South Africa as aresearch venue is attributed to the high level of training of healthcare practitioners,the facilities available in both the public and private sector and the existence of astrong regulatory authority. On the downside, the time it takes for the approval ofclinical trial protocols often exceeds that of competing research orientated countrieswhich too often win the final trial contract. The National Health Act 61 of 2003regulates the conduct and requirements of the ethical committees, important in theresearch process.

The Department of Science and Technology has published a policy documentadvocating the value of scientific research to the economy and health andbiotechnology research are an important part of this imperative(www.pub.ac.za/files/Bioeconomy%20Strategy.pdf). Local medicines research,particularly into African traditional medicines, features strongly in this strategy.

Challenges in the pharmaceutical landscape

Regulatory realities

It is important for the pharmaceutical manufacturers to gain access to the marketfor new medicines, as soon as possible, once development is complete. This appliesto both generic medicines and to new chemical entities. Currently the regulatoryauthority is weighed down by a large backlog of medicines, mainly generic, awaitingprocessing and registration and also by a skills and funding shortage. This is perhaps the key challenge facing the industry.

Potential solutions to this problem lie in the migration of the MCC to theplanned independent SAHPRA; a move which awaits the finalisation of legislationand capacity development for the preparation and evaluation of the medicineregistration applications through the planned South African Institute for RegulatorySciences within the MCC/SAHPRA. This “virtual” college will link providers oftraining, allowing practitioners to further develop their skills and hopefullyencourage new entrants into this high-technology space for the benefit of both theregulatory authority and the industry.

Intellectual property draft policy

It has been suggested that the proposed changes to the intellectual propertylegislation proposed in the draft intellectual property policy will present a keychallenge to the industry, should the assessment bodies that are proposed, not beefficient or effective. The medicines regulatory issues are probably a bigger problem.(2013 Draft IP policy).



Counterfeit medicines

Counterfeit medicines are medicines which have been deliberately manipulatedto resemble authentic medicines, but may contain no or incorrect amounts of activeingredients. They may present a risk to patients. Counterfeit medicines should notbe confused with generic medicines.

Counterfeit medicines have traditionally been a problem in Africa, but probablyas a result of the legislation and controls of the regulatory authority in South Africa,counterfeiting is not such a major problem in South Africa. Typically, counterfeitersof medicines target the high value products, such as in the malaria preventionmarket, undermining public health efforts.

Acknowledgements – IMS for making available and authorising the use of IMS market reports.

References

Legislation– Broad Based Black Economic Empowerment Act no 53 of 2003.

– Constitution of the Republic of South Africa (1966).

– Draft Guidelines for Pharmaco-economic Submissions (2010).

– Draft National Policy on Intellectual Property (2013).

– Draft regulations to the Medicines and Related Substances Control Act: Relating to Bonusing andSampling (2014).

– Medicines and Related Substances Control Act 101 of 1965.

– Medicines and Related Substances Control Amendment Act (2012).

– Medicines and Related Substances Amendment Bill [Bill 6-2014].

– Medicines and Related Substances Control Act 101 of 1965. General Regulations: Amendment (2014).

– Medicines and Related Substances Control Act 101 of 1965: Regulations relating to a TransparentPricing System for Medicines and Related Substances (2014).

– Medicines and Related Substances Control Act: Regulations relating to a transparent pricing systemfor medicines and related substances. Dispensing fee for pharmacists dispensing fee (2015).

– National Drug Policy (1996).

– National Health Act 61 of 2003.

– Patents Act 57 of 1978.

– Pharmaceutical Society SA Newsletter, 18 March 2015.

– Pharmacy Act 53 of 1974.

– Preferential Procurement Act 5 of 2000.

– Preferential Procurement Policy Framework Act 5 of 2000: Preferential Procurement Regulations 2011.

– Medicines and Related Substances Control Act 101 of 1965: Regulations relating to a TransparentPricing System for Medicines and Related Substances (2004).

Documents– COLUMBIA UNIVERSITY PRESS. The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012.

– ICH Quality guidelines.

– GANA, R L. (1996) Agreements of Trade Related Aspects of Intellectual Property Rights. Law &Policy 18(2-3): 315-354. [Online] Available from:http://onlinelibrary.wiley.com/doi/10.1111/j.1467-9930.1996.tb00175.x/full. Accessed April 2015.

– IMS. (2014) Global Outlook for Medicines through 2018. IMS Institute.

– IMS. (2015) Monthly Market Report. Data Period - January 2015.

– GOUWS, DR J. (2015) Legislation update and status MCC SAHPRA. April 2015.

