South Africa's drugmakers bemoan low medicine price hikes

South Africa’s Department of Health announced last week that pharmaceutical companies will be allowed to increase their private sector prices by a maximum of 5.8% this year, a move that is likely to disappoint the local pharmaceutical industry, BizCommunity, the daily industry news, reported.

Last November, Jonathan Louw, chief executive of South Africa’s largest domestic drugmaker Adcock Ingram, said local manufacturers expected that the formula used by the department would yield price increases of about 7.14%, but industry ideally needed a "close to double digit increases" to counter the effects of the depreciation of the rand and the sharp increase in utility costs.

Local generic drugmaker Aspen Pharmacare also said the low price increase was disappointing, BizCommunity noted. "It is lower than we had expected. We had been hoping for an increase closer to 7%," said Aspen Pharmacare's head of strategic trade, Stavros Nicolaou, adding: "Given the rand's weakness and inflationary pressures we are experiencing in the economy, we are disappointed," he said.