TAC Electronic Newsletter

TAC Electronic Newsletter

31 January 2005


Calculation of mortality in South Africa confirms massive increase in AIDS deaths
Minister of Health and the Pharmacists - An Updated Fact Sheet on the Medicines Act and the Pricing Regulations
Calculation of Mortality in South Africa Confirms Massive Increase in AIDS Deaths

TAC Says Treat 200,000 People by 2006.

A report published in the journal AIDS on Friday by Medical Research Council and University of Cape Town researchers confirms that there has been a massive increase in AIDS deaths in South Africa (Groenewald et al., AIDS, 2005, 19:193-201). This yet again demonstrates the need to speed up the implementation of the Operational Plan for Comprehensive HIV and AIDS, Care, Management and Treatment (published by the Department of Health on 19 November 2003), particularly the rollout of antiretroviral medicine and the mother-to-child transmission prevention programmes.

The Actuarial Society of South Africa estimates that over 300,000 people died of AIDS in South Africa in 2004; the number will rise in 2005 unless many more people receive treatment. Only 20,000 people were receiving treatment in the public sector as of October 2004. This is why the TAC's campaign theme for this year is Treat 200,000 People by 2006.

The rise in AIDS deaths also signals how urgent it is to improve prevention efforts so as to stem unnecessary mortality in the future. Over 1,000 people are estimated to be infected daily in South Africa. A new bold approach to prevention is needed: one that encourages HIV testing and that is much more forthright about the need for condoms to be distributed in schools, places of worship and work. Public messaging must also include people with HIV, sex-workers and gay men and not seek to promote interventions or policies that stigmatise people.

End the Denial

AIDS denialists who argue that there is not a substantial AIDS epidemic have received publicity over the last year in the South African and British media. Yet not once have any of their views been published in peer-reviewed scientific journals. This is because their arguments have no scientific basis. The report by Groenewald et al. should signal to the media that continuing to give large space to AIDS denialists is irresponsible and contributing to public confusion. The questions that really do need to be debated more extensively in the media are much more important and complex such as:

What are the barriers to the successful rollout of antiretroviral treatment and how can they be overcome?

What are the most effective ways of preventing new HIV infections?

How can we encourage more people to be open about their HIV-status?

Should voluntary counselling and testing of people with HIV become routine for all patients who show AIDS symptoms at clinics and hospitals?

Given the overwhelming evidence of a large increase in the number of deaths, it is an insult to the dignity of people with HIV as well as people who have lost family and friends to AIDS to continue denying that there is a massive HIV epidemic in South Africa.

What the Report by Groenewald et al. Shows

In 2001, Statistics South Africa (Stats SA) published a study that used a 12% sample of death certificates for the period 1996 to 2001 to calculate the proportion of deaths associated with different causes. Because death certificates frequently do not state HIV as the underlying cause of death, the proportion of deaths caused by HIV was substantially underestimated. Nevertheless, the study shows explicitly that HIV had become the largest cause of death (as indicated on death certificates) in women by 2001 and that a pattern of mortality had emerged in which young adults (aged 15-49) were dying in increasingly large numbers relative to the rest of the population.

Stats South Africa states "In cases where HIV or its synonyms (e.g., immunocompromised, immunosuppression, retroviral disease, wasting syndrome) are stated on the certificate, an appropriate code related to HIV is used. ... On the other hand, if HIV or its synonyms are not stated on the certificate, the reported diseases are coded as stated, with no relation to HIV. For example, if a physician certifies the death of a 25-year old urban, educated and employed person as being that of acute tuberculosis, with no mention of HIV, the code for acute tuberculosis is used. This is where official statistics stop and research begins." (p. 28)

The new report by Groenewald et al. takes up the research challenge, presented by the Stats SA report, to determine how many deaths classified under the disease categories other than HIV were actually due to HIV. It analyses the pattern of deaths for 22 different disease categories in particular ages. Nine causes of death categories showed substantial increases between 1996 and 2000-2001, with increases being particularly significant in young adults and in children below the age of 5. These categories are all death categories or opportunistic infections frequently associated with HIV (e.g. TB, pneumonia, diarrhoea). The only plausible explanation for the increase in deaths in most of these categories is an AIDS epidemic.

When combined with the deaths that were actually classified in the HIV category, the researchers found that they accounted for 93% of the deaths due to AIDS estimated by the Actuarial Society of South Africa's ASSA2000 model in 2000-2001. Furthermore, since people were presumably dying of AIDS before 1996, the actual number of AIDS deaths may be somewhat higher. AIDS denialists have frequently criticised ASSA2000 as merely a mathematical model not based on reality. The results of this report show, once again, the lie to this. Incidentally, the ASSA2002 model subsequently replaced the ASSA2000 model, and the estimated number of AIDS deaths in 2000-2001 was 7% lower in ASSA2002 than in ASSA2000.

It is untenable to argue that the increase in mortality is due to population growth. The Stats SA report shows a rise in the proportion of deaths due to HIV/AIDS and population growth affects the total number of deaths rather than the cause of death profile. Equally, it cannot be due to improved death registration, for the same reason. Nor can it be explained by poverty. Provision of housing, social grants and electricity have all improved since 1994 and employment and income-levels of the poorest have not changed dramatically enough to cause a massive increase in poverty-related deaths. It would be expected that diseases of poverty would primarily affect the elderly and the young, but the rise in the proportion of deaths due to TB, pneumonia and other frequent AIDS-related conditions in young adults can only be explained by an AIDS epidemic.

The findings of Groenewald et al. add to the large body of knowledge about increased mortality in South Africa including:

An MRC report published in 2001 that examined death certificate data and found a steep rise in mortality.

An analysis of Home Affairs death data from 1996 to 2003 published in the South African Medical Journal in 2004 that found a 68% rise in adult registered adult deaths.

A recent study by IDASA that found the proportion of deaths on the voters roll during subsequent periods increased and that this increase showed the same age-pattern of increased mortality in young adults that can only be explained by an HIV epidemic.

Main Reference

Groenewald, P., N. Nannana, D. Bourne, R Laubscher and D. Bradshaw, Identifying deaths from AIDS in South Africa, AIDS, 2005, 19:193-201.


Minister of Health and the Pharmacists - An Updated Fact Sheet on the Medicines Act and the Pricing Regulations

The court case between the Minister of Health and pharmacists has attracted a lot of attention in the media lately - rightly so, because -- as recognised by both the Department of Health and the Pharmaceutical Society of South Africa -- the Medicines Act is an important mechanism for reducing the prices of medicines. The details of the case are complex, therefore we have updated a fact sheet we released last year to clarify matters for the public.

Many poor people use the private health sector in South Africa because they do not live near adequate public health facilities or are unable to access the services that they need in the public sector. Although most people use the public sector most of the time to obtain their medicines, nearly everyone buys medicines in the private sector at some time or another. Put simply, many users of the public health system often have no choice but to purchase medicines from private pharmacies or their doctors. In some cases, this is because the medicines they need are not available in the public sector. Some essential medicines are unavailable in state hospitals and clinics, often because of their cost.

But, even where medicines are available in the public sector, they are often available only at hospitals and not at local clinics. Because of the distance, time and cost involved in accessing these medicines, people often rely on community pharmacies or dispensing doctors. In other cases, low wage earners cannot afford, or are unable to take time off from work, to wait in long queues at state pharmacies in public health facilities. Frequently however, poor people cannot access essential medicines in the private sector because prices are too high.

The Medicines and Related Substances Control Amendment Act, 90 of 1997 ("the Medicines Amendment Act") was introduced to address this and other similar problems regarding access. It correctly targets the entire medicines supply chain for regulation. Dealing with all role-players from manufacturers through to retail pharmacists, it seeks to eliminate practices that limit access to medicines. This is to be done by the Act as well as two sets of regulations: the General Regulations and the Pricing Regulations. The General Regulations, which came into effect on 2 May 2003, are still in force. The pricing regulations, which started to come into effect a year later on 2 May 2004, were set aside by the Supreme Court of Appeal ("the SCA") on 20 December 2004.

What is the history of the Medicines Amendment Act and why did it take so long to come into force?

The Medicines Amendment Act was passed by Parliament in 1997. But before it could be promulgated, the Pharmaceutical Manufacturers’ Association (PMA) – and all but one of its members – sought an interdict preventing President Mandela from bringing it into effect. When the matter finally came to court in March 2001, the Treatment Action Campaign (TAC) obtained permission to intervene as amicus curiae, or friend of the court. Six weeks later, and following worldwide protests called by the TAC and its international allies against the pharmaceutical industry, the PMA withdrew its lawsuit.

It took a further two years before the law, by now slightly amended by the Medicines and Related Substances Amendment Act, 59 of 2002, started to come into force. On 2 May 2003, some of the provisions of the new legislation came into effect, as did the regulations that give them detail. The full regulatory framework, which only came into effect last year, was delayed for two reasons. First, Act 59 of 2002 expressly delayed the coming into effect of certain provisions of the law until 2 May 2004. Second, a further set of regulations dealing with medicine prices could not be drafted until the Pricing Committee had made recommendations to the Minister in this regard, and the committee could only be established once certain provisions of the 1997 Medicines Amendment Act had come into effect.

What is a regulation as opposed to the Medicines Amendment Act itself?

Often, laws do not contain the full details of their implementation. In these cases, they make provision for regulations to be developed by the Ministry responsible for the law. Regulations do not have to be approved by Parliament and are therefore easier to change than the laws they regulate. For example the Medicines Amendment Act itself enforces the concept of a single exit price ("SEP"), but it was the pricing regulations that determined exactly how the SEP was to be calculated.

What were some of the key aspects of the pricing regulations?

Single Exit Price

The SEP was meant to ensure that pharmaceutical companies sell a medicine at the same price to everyone in the private and not-for-profit sector. Simply put, manufacturers and importers were not allowed to sell medicines to anyone other than the state at prices higher or lower than the relevant SEP. This SEP was to be printed on the medicine package or the container in which the medicine is sold. The SEP came into effect on 2 June 2004 and was set aside a little over six months later on 20 December 2004.

Dispensing Fees

>From 27 August 2004, pharmacists were no longer able to put a markup on medicines in the way this happened before. Instead, they were only allowed to charge the following dispensing fees (exclusive of VAT):


For each schedule 1 and 2 medicine without a prescription – 16% of the SEP up to a maximum of R16

For each schedule 3,4,5,6,7 and 8 medicine (and schedule 1 and 2 medicine with a prescription) – 26% of the SEP up to a maximum of R26

Dispensing doctors:

For all medicines regardless of scheduling, 16% of the SEP with a maximum of R16

How was the SEP to be established?

The pricing regulations set out two mechanisms in terms of which the manufacturer or importer of a medicine would determine a particular medicine's single exit price:

The first mechanism, which came into effect on 2 June 2004, removed the "cost" of incentive schemes such as bonuses, rebates and discounts. This effectively averaged prices out (at 2003 levels) without making any significant difference to the manufacturers' bottom lines.

The second mechanism was somewhat more complex. It involved the development – by the Director-General of Health (DG) – of a "methodology for conforming with international benchmarks". This was to ensure that medicine prices in South Africa are in line with those in other countries where medicine prices are regulated. Manufacturers and importers were to have three months to adjust their SEPs once the DG had published the "methodology". This process may very well have resulted in a significant reduction in medicine prices, particularly if comparisons were made with developing countries like India. But until the DG acted – and the regulations did not say when this would be – the first mechanism would continue to be used.

This meant that in the short term, the average prices of medicines sold in the private sector should not have changed much as a result of the new law. Prices for those who buy medicines from large pharmacies in major cities would have gone up, whereas prices for those who buy from small pharmacies outside of the major metropoles and cities may have dropped. This is because the discounts and rebates offered in the past to some resulted in higher prices for others.

What was wrong with the new dispensing fees?

In evaluating the appropriateness of the dispensing fee allowed by the pricing regulations, the SCA considered its impact on the viability of pharmacies. In particular, it drew attention to the need for an appropriate balance to be struck between the interest of the public in being able to purchase affordable medicines and the interests of pharmacists as suppliers of medicines.

In short, the SCA held that access requires affordability and availability. Low medicine prices do not necessarily guarantee access. Medicines also need to be available. Therefore a dispensing fee that is so low that it threatens the viability of pharmacies cannot be considered appropriate, because its effect is generally to limit access to medicines by ensuring that they are only available for purchase from a "few large dispensers located in relatively affluent areas". The evidence before the court supported this conclusion.

What was wrong with the rest of the regulations?

One of the key principles underpinning the Constitution is legality, which means that a person empowered to act in terms of a particular power set out in a law may not exceed the scope of that power. In other words, if the law says that the Minister may pass regulations dealing with the setting of an "appropriate dispensing fee", she cannot set a fee that is unfair and inappropriate. Also, if the law says that she may pass regulations on the recommendation of the pricing committee, she cannot decide on her own to regulate on matters not considered by the committee.

The SCA did not consider whether the Constitution allows for practices such as international tendering or the way in which the SEP was to be set. What it said was that the Medicines Act did not give the Minister the power to make the type of regulations that she made. In short, the Act gave her the power to regulate on topic X and she passed regulations on topics Y and Z. In other words, she acted without having the power to do so. The best way to deal with this is to amend the Medicines Act again and clearly set out what powers the Minister has or does not have.

Where to from here?

The SCA’s decision will most likely be considered by the Constitutional Court when it convenes on March 15th to consider government’s application for leave to appeal against the unanimous order striking down the regulations in their entirety. If the Court decides to consider the matter, the order of the SCA will be suspended automatically. But until then, the regulations are null and void. If the Court decides to hear the matter and agrees that the regulations are bad, it will have to consider whether to strike them down with immediate effect or whether it should keep them – or part of them – alive for a period to allow for government to pass new laws.