birth control

medication pixabay

Read: Junk status downgrades could soon increase price of medicine

Another extra cost?

birth control

medication pixabay

It’s no secret that South Africa has been downgraded to junk status by two rating agencies (the 3rd is expected to do the same), working class South Africans and economists alike have warned of the effects for all, especially the poor.

Now it seems that the cost of medication will be affected too, the Department of Health’s chief director of sector-wide procurement, Gavin Steel, spoke to Talk Radio 702’s Xolani Gwala about how the downgrade will affect people’s right to quality and affordable healthcare.

Steel explained that many of the “active ingredients” in the medication used and made locally, have to be imported.

“active ingredients are important they consitute anything from ABOUT 30% OF THE COST OF GOODS, UP TO 70% IN SOME EXCEPTIONAL CIRCUMSTANCES WITH GENERIC MEDICINE.”

“THERE WILL BE A PROPORTION OF THE COSTS OF MEDICINE THAT WILL BE AFFECTED BY THE EXCHANGE RATE. PROBABLY TO A LESSER EXTENT THAN SOMETHING LIKE FUEL THOUGH”

When asked why medicine would be affected to a “lesser extent”, Steel explained that aside from the “active pharmaceutical ingredient” (API/30% imported cost), the remaining 70% of the costs occur locally through things such as packaging and transport and transforming the chemical into the finished tablet.

Steel says that it’s not just the imported product (API) costs that will be pushed up.

“the impact of foregin exchange will directly affect that 30%, the impact of foregin exchange on general inflation will then drive up the remaining 70%”

Gwala asked Steel what the Department of Health can do to make sure that the poorest of the poor are still able to receive their crucial medication without having to pay more than they can afford. Steel explained that in the department’s tenders with pharmaceutical companies, there is a formula that allows for adjustments to protect the consumer when there are changes to the rate of exchange.

In short though, the word from the Department of Health seems to be “don’t panic, we have regulations and systems in place to adjust accordingly when things change”. Let’s hope those crafty pharmaceuticals don’t find any loopholes to milk more of a profit.