South African consumers could soon face higher dispensing fees for prescription medicines if a new plan becomes law.

The proposed pricing regulation would see consumers cough up exorbitant fees added to the price of medicines.

The fees structure separates medicine into four pricing categories depending on the single exit price (SEP) of the medicine.

Different dispensing fees that will affect consumers include:

• Medicine costing less than R75 being dispensed at no more than 46% of the SEP, plus R6.

• Medicine costing between R75 and R200 will have a dispensing fee of not more than 33% of the SEP, plus R51.

• Medicine costing more than R200 but less than R700 will have a dispensing fee of not more than 15% of the SEP, plus R15.

• Medicine costing more than R700 will have a dispensing fee of not more than 5% of the SEP plus R121.

To make matters worse, medical aid rates would also increase by up to 4% above inflation if the fee system was enacted.

Although the four-tier fee schedule is still being reviewed, it has elicited mixed reactions.

The amendment to the pricing register in the Medicines and Related Substances Act of 1965 was released for comment in July.

Comments are under review by the pricing committee.

South Africa has no statutory regulation for dispensing fees. The Department of Health believes the proposed regulations are intended to "improve medicine affordability and transparency in pricing".

Spokesman for the ministry Fidel Hadebe said there was a legal requirement to be transparent about medicine prices and emphasised that the fee would cap what a pharmacist could charge.

Some medical schemes have imposed a self-regulating standard dispensing fee of R26 for medicine under R100, or 26% of the dispensing fee. Pharmacy chain Clicks adds a dispensing fee of R26 on items up to R100 and a 26% dispensing fee on items costing more than R100.

Ina Wilken, the vice-chairman of the National Consumer Forum, said the new regulations would mean that if someone bought medicine for R350, the dispensing fee would be an additional R51 plus R52.50 (15% of a single exit price), amounting to R453.50.

Wilken wanted to know if the new regulations could put medicines out of reach for consumers.

"Will the medical aids be prepared to foot the bill and what is going to happen with the majority who cannot afford the higher prices?" she said.

Meanwhile, medical schemes are widely opposed to the proposal.

Rajesh Patel, the head of benefits at the Board of Health Care Funders, said there would be a sudden, big increase in member contributions of 2% to 4.5%, over and above inflation.

"The new model literally doubles the amount that they may have to pay out," Patel said.

"It affects our medical scheme members."

He said that while pharmacists seemed happy with the proposal, it meant a "massive jump" in the cost of medicine.

"If this proposal does get to be implemented, it's a massive jump. Dispensing fees will more than double," he said.

Discovery Health CEO Jonathan Broomberg said his group was concerned that the proposal would negatively affect the private healthcare sector.

He said costs were bound to rise. "We estimate that if this approach is implemented, medical schemes and their members would spend an additional R2-billion per annum on dispensing fees.

"Discovery would ensure that its members have access to a wide range of pharmacies that charge at or below the applicable rate, so that members should face no significant impact from this."

Meanwhile pharmacy chains such as Clicks and community pharmacies have welcomed the four-tier proposal.

Michael Harvey, Clicks' MD, said the proposal provided a fair return to retail pharmacists while also benefiting consumers.

Harvey said the proposal would bring an end to the "uncertain regulatory environment" and bring much-needed stability to the pharmacy sector.

He said it affected consumers as many pharmacists appear to have capitalised on the uncertainty and charged far higher administrative and service fees.

However, Sham Moodley, the joint chairman of the Pharmaceutical Stakeholders Forum, which represented the Pharmaceutical Society of SA, and CPS, United South African Pharmacist and the SA Progressive Pharmacy Association, said there was no evidence of abuse in the industry and that even if a pharmacist attempted to abuse the system they would do themselves a disservice as patients would seek services elsewhere.

Moodley described the proposal as a "tight model" and said pharmacists would be entitled to charge a reasonable fee for their service.