HFA says the increase will primarily put pressure on people on chronic medication.
The increase kicked in on 1 October 2026. Picture: iStock
The Health Funders Association (HFA) has warned that increasing medicine prices could hurt struggling households and increase medical scheme expenditure.
HFA CEO Thoneshan Naidoo said that for medical scheme members and households, a medicine price increase is more than a percentage on paper. It affects the cost of maintaining healthcare cover and obtaining necessary treatment.
HFA is a non-profit organisation representing 23 medical schemes and three administrators in South Africa. The organisation’s role includes representing member interests in critical industry discussions, providing access to key resources and expertise, and advocacy on regulatory and policy matters through submissions and engagement with key stakeholders.
Medicine price increases
Naidoo said the organisation is seeking clarity and understanding of the evidence supporting the enforced extraordinary adjustment, how the impact on patients and affordability was assessed and how the perspectives of medical schemes and consumers were considered before the decision was taken.
This follows the National Department of Health’s authorisation of a 2.88% increase in the Single Exit Price (SEP), effective 1 October 2026. SEP is the regulated maximum allowable price at which manufacturers sell medicines into the private market.
The department also approved a 1.47% annual adjustment earlier this year.
“The increase was implemented with just one week’s notice, creating operational challenges for administrators, schemes, pharmacies and patients, while also creating uncertainty regarding medicine pricing and benefit administration,” said Naidoo.
Medicine price increase to hurt households
According to Naidoo, the organisation estimates that the adjustment could increase medical scheme expenditure by approximately R1 billion and households’ direct medicine spending by an additional R400 million per annum.
“The actual impact will depend on medicine use since medicine expenditure is driven by both price and utilisation as well as the mix of products,” he said.
“This is why medical scheme medicine expenditure has been rising at levels in excess of the Consumer Price Index (CPI).”
He noted that for medical scheme members, higher medicine expenditure places further pressure on medical scheme contributions. Schemes pool members’ contributions to fund their healthcare, so increases in the cost of treatment ultimately affect the affordability of cover.
Pressure on households
Naidoo said the increases will mostly put pressure on people who are on chronic medications.
“Members paying for medicines from their own pockets will feel the impact more immediately through higher direct costs at the point of purchase.
“These pressures matter particularly for people who require ongoing treatment. Medicines are a recurring necessity for many households, including those managing chronic conditions. Higher prices can add to the financial strain on members and their families at a time when maintaining healthcare cover is already challenging.”
He worries that once the increase is implemented, it becomes part of the price base on which future annual increases are calculated. Its cost therefore extends into 2027 and compounds over time.
“An affordability assessment should consider both the immediate increase and its continuing effect on contributions and household spending.”
Clarity required
Naidoo said the organisation has written to Health Minister Dr Aaron Motsoaledi and the national department to seek clarity on the process and basis for determining the increase. He has also raised an issue that medical schemes and consumer representatives were not consulted before the adjustment was approved.
“Medical schemes and consumer representatives’ participation could have contributed expenditure data, helped test assumptions about affordability and informed consideration of possible alternatives. Consultation would also allow members’ and patients’ experiences to form part of the assessment.
“The pricing regulations also provide a mechanism for manufacturers or importers to seek exceptional increases for particular medicines. HFA would welcome clarity on why a broader blanket adjustment was considered appropriate in this instance and how targeted alternatives were evaluated.
“In a country where many households already face difficult healthcare choices, these decisions have real consequences. Transparency and consultation can help ensure that the financial pressures facing members and patients receive full consideration alongside the need to maintain a reliable medicine supply,” he said.
