FROM: The Registrar, Supreme Court of Appeal

Please note that the media summary is for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal

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PHARMACEUTICAL SOCIETY OF SOUTH AFRICA AND OTHERS v THE MINISTER OF HEALTH AND ANOTHER

NEW CLICKS SOUTH AFRICA (PTY) LIMITED v DR MANTO TSHABALALA-MSIMANG NO AND ANOTHER

The Supreme Court of Appeal today granted leave to appeal to, and simultaneously allowed the appeals of, the Pharmaceutical Society of SA and New Clicks SA (Pty) Ltd against the Minister of Health and the Chairperson of the pricing committee on whose recommendation the minister promulgated the ‘Regulations relating to a Transparent Pricing System for Medicines and Related Substances’.

In upholding the appeal from the Cape High Court, the SCA set aside the regulations on the ground that they did not pass the test of legality and were consequently ultra vires the enabling Act.

The regulations in essence provide for a pricing system that defines and controls the single exit price of manufacturers and for a dispensing fee, which, for pharmacists amounts to either 16% of the exit price (if it is less than R100) or R16 (if more than R100) without a medical prescription If there is a prescription the figures are 26% (if it is less than R100) and R26 (if more than R100, whether R100 or R1000).

The main findings were that (a) the dispensing fees, which have to be ‘appropriate’, are not appropriate because they did not take into account the viability of the dispensing industry and (b) regulations relating to the single exit price introduced a price control mechanism, which the Act did not envisage, and, in any event, were overboard

On the preliminary issue, namely whether the SCA had jurisdiction to hear and determine the matter, it was held that the filing of an application for leave to appeal before the ruling by a high court on on application for leave that was before it, is not fatal provided a ruling is given before the judgment of the SCA. In this case the ruling was given two days after close of argument. Further, the delay in making a ruling by the Cape Court was in the circumstances of the case so unreasonable that it amounted to a breach of the right to a fair hearing and to a constructive refusal of leave.

The Minister was ordered to pay the costs in both courts.