Drugmakers in South Africa have asked the government for more time to respond to new moves by the Department of Health to cut the prices of branded medicines in the country.

The government has published proposals to “benchmark” the South African prices of individual innovator drugs against the lowest price charged for them in a "basket" of comparator countries - Australia, Canada, New Zealand and Spain. However, it also says that: “to cater for the possibility that some prices may be drastically reduced unfairly,” it is proposing two “protections” for drugmakers. First of these is that the process would be phased in, delaying the implementation of the ultimate benchmark price by two years and permitting the manufacturer to charge the average of the lowest three prices out of the five during this period.

Second, it proposes an exemption process, which would permit drugmakers to challenge the ultimate benchmark price in exchange for full disclosure of all aspects of how they arrived at a product’s South African price, and why it would be economically unviable for them to reduce this price if they are able to sell it for less in other markets.

On August 29, the Department issued a call for comments on the proposals to be received within 30 days. However, the Pharmaceutical Task Group (PTG), an umbrella body which represents the five major pharmaceutical industry associations in South Africa, has asked for the deadline to be extended to the end of October.

The Department says the new system will bring the prices of branded drugs in South Africa into line with the rest of the world. The comparator countries have been chosen because their pricing systems are transparent, they have similar intellectual property rights agreements to those in place in South Africa, and similar drugs are available on their markets at affordable prices, it goes on.

The government first proposed international benchmarking as a way of reducing domestic drug prices back in October 2006, but at that time it also wanted the process to cover generics, whose prices, it said, should be set 40% lower than those of the originator products. Claiming that this would reduce their revenues in the country by around 35%, the branded drugmakers proposed instead that the South African price should be based on the average in the five countries, rather than the lowest. They also called for some essential drugs, such as HIV/AIDS treatments, to be exempted from the proposed regulations.

- The PTG’s five member associations are the Innovative Medicines of SA, the Pharmaceutical Industry Association of SA (Piasa), the National Association of Generic Manufacturers, Pharmaceuticals Made in SA and the Self-Medication Manufacturers Association of SA.