South African Generics Substantially Cheaper Than in US, Europe

According to surveys conducted by local generic drugmakers, selling prices of generics in South Africa are substantially lower than in developed and comparable markets in the Western hemisphere. Although currency differentials account for some of the differences, the mechanisms of drug provision in South Africa account for much of the local market's low pricing.

Of the 42 bioequivalent generic products surveyed, 11 were lower than a seven-country average that included Australia, Brazil, Canada, the Netherlands, Germany, the UK and the US. South African products were also cheapest in more than half of the remainder of the basket, and only one locally produced generic was more expensive than in all other markets included in the comparison.

The report cites changes to pricing regulations in South Africa last year, which oblige producers to charge AIDS treatment facilities only the lowest price, while invoicing other private and nongovernmental organisations for a so-called maximum Single Exit Price. New laws to remove discounts have also forced drugmakers to move from a gross to a net price, substantially lower than those permitted previously. Government efforts to control pricing in South Africa have attracted criticism from the multinational sector, which also continues to operate under lax local patent conditions.