Consumers retain the right to choose their pharmacy

South Africans lucky enough to be members of a medical scheme are increasingly accustomed to being pushed by their scheme to purchase their medicines from a designated service provider (DSP), often a select group of pharmacies or courier services arbitrarily selected by medical schemes.

If this does not suit members, and they opt to buy from their preferred pharmacy, a punitive co-payment is levied on the medicine, up to 40% in some cases. 

This applies particularly to the dispensing of chronic medication – used for the management of long-term illnesses like diabetes, high blood pressure and epilepsy, among others.

Chronic medication accounts for some 50% of medicines dispensed in the country. 

In theory, the practice of using DSPs helps the medical scheme manage the cost of chronic medicines dispensed in South Africa and in the process helps to keep a curb on medical inflation, which is out of control in the country. 

But theory and practice are two different things, and this practice is being challenged and is likely to change following a recent judgment that found in favour of the Independent Community Pharmacy Association (ICPA). 

Judge Bernard Ngoepe, who chairs the Appeals Board, supported by two other members of the Board, found that the Council for Medical Schemes’ (CMS), decision to stay the process in terms of section 61 of the Medical Schemes Act was irrational and the process should be continued, and finalised.

This is because in the process, other pharmacies, who are able to provide the same medicines at the same price and provide as good or better service, are cut out of the loop, which is financially detrimental to them.

Patients who build up a relationship with their local pharmacist are often forced to obtain their chronic medicines from a different scheme-selected pharmacy, often a courier service, or pay exorbitant penalty co-payments, which is an infringement of their right to choose a healthcare provider and is adversely affecting their care.

It follows then, that the unilateral determination by the medical schemes on how co-payments will be calculated, which has resulted in certain schemes charging so-called “penalty” co-payments, should also be declared an undesirable business practice.

“This issue is fundamental to patient rights,” says Jackie Maimin, CEO of the Independent Community Pharmacy Association (ICPA). “To pay money to a medical scheme and then be dictated to… particularly when pharmacies are prepared to provide the same service at the same rates is a practice that we are opposed to.” 

Previously, the ICPA dealt with the issue on a case by case basis, settling with Fedhealth and GEMS medical schemes, but as the practice gathered momentum, it became apparent the issue would have to be dealt with at a policy level. 

In 2015, the ICPA, which represents about 1,000 independent pharmacies, laid a complaint with the Registrar of Medical Schemes regarding the growing practice of schemes appointing these closed DSPs and charging penalty co-payments. They requested that the Council initiate a process towards declaring these practices undesirable. 

CMS refused to initiate the process and this led to ICPA’s first appeal. The Appeal Board in the first appeal ruled in 2016 that the practice of selecting DSPs and imposing excessive co-payments should be investigated and the process for declaring these practices as irregular undesirable practices by medical schemes should begin. 

The judge was scathing about the Council’s reasons for not complying with the previous order.