Health Issues: Pharmacists to make an urgent submission to the VAT review panel
People have many competing needs and often can barely afford to pay for medicines. By offering some relief with zero-rated medicines, improved access to medicine can be more affordable.
The Pharmaceutical Society of South Africa (PSSA) has announced that it intends to make a submission to the recently appointed panel of experts which is to review the current list of Value Added Tax (VAT) zero-rated items.
For many years, the PSSA has supported the concept that essential services and products should be exempt from VAT in order to make them more accessible to consumers. This includes medicines which are essential to maintain healthy productive citizens in this country.
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The National Department of Health’s Essential Medicines Programme recognises the medicines that are not only essential for healthcare but are also closely aligned to the burden of disease in this country.
While they may be given free of charge to patients who rely on public sector healthcare facilities, it must be noted that there are many occasions when a member of the public may choose to buy these medicines from a community pharmacy, rather than forfeit a day’s wages and pay transport costs to get to a public sector facility.
“No-one wants to spend money on medicines,” says Prof Sarel Malan, President of the PSSA.
People have many competing needs and often can barely afford to pay for medicines. By offering some relief with zero-rated medicines, improved access to medicine can be more affordable.
Many consumers are patients in the lower income groups that would gain the greatest benefit from VAT exemption. Medicine is not a normal commodity of trade – it is a necessity in most cases – and the demand and supply characteristics do not follow classic market principles.
Even for those people who belong to a medical scheme, there are substantial amounts of “out-of-pocket” medicine expenditure, in terms of self-medication and paying for either acute or chronic medication in cash if these medicines are not listed in the scheme’s formulary.
The PSSA therefore urges the panel of experts to consider zero-rating some or all registered medicines.
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