Joint Submission: Medicines and Related Substances
Amendment Bill, 2002
Portfolio Committee on Health
National Assembly, Parliament
17 September 2002
Drafted by Jonathan Berger
Researcher: Law and Treatment Access Unit, AIDS Law Project
(011) 717-8627 (T); (011) 403-2341

BACKGROUND
On 19 April 2001, the Pharmaceutical Manufacturers’ Association of South Africa (PMA) and numerous multinational brand-name pharmaceutical companies abandoned their legal challenge to the Medicines and Related Substances Control Amendment Act, 90 of 1997 (the Medicines Amendment Act). This came a little over six weeks after the Pretoria High Court had admitted the Treatment Action Campaign (TAC) as amicus curiae in support of the legislation then under attack. It is widely recognised that TAC’s intervention—which included significant local and international mobilisation—was central to the abandonment of the case.

Speaking at a press conference shortly after the abandonment of the case, the Minister of Health stated as follows:

"We regard today's settlement as a victory in the sense that it unfreezes our law and restores to us the power to pursue policies that we believe are critical to securing medicines at affordable rates and exercising wise control over them….

Government will now go ahead and promulgate the law and within a few weeks draft regulations relating to various aspects of the Act will be published for public comment.

Certain aspects of the Act … will kick in automatically with promulgation. In addition, we will move speedily to:
Set up the Pricing Committee whose job will include the gathering of pharmaceutical intelligence and advising the Minister on a transparent pricing system for medicines.
Activate the system of generic substitution, which will have major benefits for consumers in the private health care sector - and especially medical schemes."

Despite the Minister’s stated commitment to speedy implementation, the legislation has yet to be promulgated and regulations have yet to be issued. Instead, Cabinet decided on 15 May 2002 to approve the Medicines and Related Substances Amendment Bill (the Cabinet-approved Bill), which amends both the Medicines and Related Substances Control Act, 101 of 1965 (the principal Act) and the Medicines Amendment Act. The Cabinet-approved Bill was thereafter published for comment on 22 May 2002, after which an amended draft Bill was tabled in Parliament. It is in respect of the amended draft Bill (the Bill) that this submission is made.

PROCEDURAL IRREGULARITIES
We are concerned that the legislative process—accompanied by the President’s failure to promulgate the Medicines Amendment Act, either in part or in full—has not only resulted in a further (and largely avoidable) delay in implementation of the Medicines Amendment Act, but has also resulted in probable unconstitutional conduct in the form of a breach of the separation of powers doctrine. In this regard, the Constitutional Court’s recent judgment in S v Walters and Another is instructive:

"This power conferred on the President [to bring the Act into force] ... is a public power and has to be exercised lawfully for the purpose for which it was given in the enactment.  It could not lawfully be used to veto or otherwise block its implementation.  The new section ... remains in abeyance for reasons that Parliament did not contemplate when the power to implement was given to the President.  Resolution of the objections to the new section is the exclusive prerogative of Parliament."

While Walters dealt with another statute, the principle nevertheless remains applicable. In that case, the Constitutional Court made it plain that promulgation of legislation may only be delayed for good reason. Thus, for example, if legislation requires regulations before it can be promulgated, it would make good sense to delay promulgation pending the finalisation of the regulations. This does not, however, provide license to delay unnecessarily the regulation drafting process.

What is also clear from Walters is that Parliament's will—that the legislation be brought into effect when it is appropriate to do so—cannot be undermined because the person tasked with implementing the act believes it to be bad or inappropriate. If that person is the President, he or she may only refer legislation back to Parliament if there are "reservations about the constitutionality of the Bill", and then only prior to assenting to the Bill.

In the case of the Medicines Amendment Act, former President Mandela raised no constitutional concerns and duly assented to and signed the legislation before him. In the result, the matters dealt with by the Bill do not provide a lawful basis in terms of which President Mbeki may delay the promulgation of the Medicines Amendment Act.

PURPOSE OF THE SUBMISSION
Notwithstanding these concerns, our submission on the Bill is focused on one substantive area of concern—the independence of the Medicines Control Council (MCC). In this regard, the submission deals with the composition of and appointments to the MCC, as well as processes in terms of which decisions of the MCC are to be reviewed. In addition, this submission provides support for several of the new amendments proposed. In particular, we consider provisions dealing with generic substitution and the pricing committee.

INDEPENDENCE OF THE MCC
The ALP and TAC are concerned that the provisions in the Bill dealing with the MCC’s composition have the potential to undermine its operational independence and the efficacy of the drug regulatory process. Our concern is that these provisions, read together with the amendments introduced by the Medicines Amendment Act, will allow for political considerations to be placed above the broader public interest, with the health and safety of people—as well as constitutional rights to life and access to health care services—potentially being put at risk.

Parliament has an obligation to ensure that this does not happen. Writing for a unanimous Constitutional Court in Dawood and Another v Minister of Home Affairs and Others; Shalabi and Another v Minister of Home Affairs and Others; Thomas and Another v Minister of Home Affairs and Others, Justice O’Regan held that "[i]n a constitutional democracy such as ours the responsibility to protect constitutional rights in practice is imposed both on the Legislature and on the Executive and its officials."

Composition of and appointments to the MCC
While section 3 of the principal Act—which sets out the qualifications necessary for appointment to the MCC—was amended by section 3 of the Medicines Amendment Act so as to remove any reference to necessary qualifications, implicit in section 6(2)(b) of the principal Act is that the Minister’s discretion to make appointments to the MCC in terms of section 3 is somewhat restricted. Section 6(2)(b), as amended, provides that a "member of the council shall vacate his or her office … if he or she ceases to hold any qualification necessary for his or her appointment."

While the Minister’s discretion to appoint council members would be somewhat broader upon promulgation of the Medicines Amendment Act, given that he or she would no longer be required to appoint people with particular qualifications, implicit in section 6(2)(b) is the principle that appropriate qualifications—although not expressly defined—are nevertheless a prerequisite for appointment to the MCC.

In terms of section 2(a) of the Bill, however, section 6(2)(b) of the principal Act is to be deleted. While suggesting that appropriate qualifications are no longer a prerequisite for appointment to the MCC—indicating that expert knowledge on matters of medicine and pharmaceutics is no longer required before being entrusted with making decisions on the safety, quality and efficacy of medicines—the proposed amendment makes it plain that even if council members were appointed because of particular qualifications, that loss of such qualifications would not necessitate vacation of office.

In addition, section 2(b) of the Bill—by deleting the words "subject to the provisions of section 3" from section 6(3) of the principal Act—makes it plain that temporary appointments to fill vacancies for the unexpired portions of periods of office are not dependant on any particular qualifications. Thus, for example, the temporary replacement for a person with special knowledge of pharmaceutics does not have to be a person with such knowledge. In this way, the Bill removes the last remaining reference to qualifications necessary for appointment.

A comparison with other regulatory bodies is instructive. The National Health Laboratory Services Board (NHLS Board), established in terms of section 7 of the National Health Laboratory Services Act, 37 of 2000, consists of a specified number of members appointed either on the basis of representing a particular sector (or governmental department or level) or on the basis of having particular knowledge. In respect of NHLS Board members representing particular sectors or branches of government, the Minister is required to make appointments after consultation with relevant bodies and institutions, being under an express instruction to appoint "appropriate laboratory professionals". In respect of NHLS Board members appointed on the basis of their special knowledge, the Minister is obliged to call for public nominations.

While providing less detail, section 4 of the Medical Schemes Act, 131 of 1998 establishes a Council for Medical Schemes whose members are to be appointed by the Minister "taking into account the interests of members and of medical schemes, expertise in law, accounting, medicine, actuarial sciences, economics and consumer affairs." A further example is the Media Development and Diversity Act, 14 of 2002, which not only set out qualifications for appointment to the Board in detail, but also provides for an open selection process conducted by the National Assembly, subject to certain stated principles.

It is the responsibility of the legislature to ensure that when it confers discretionary powers—such as the power to make appointments to the MCC—that the empowering legislation is drafted in such a way as to limit the risk of an unconstitutional exercise of such powers. To remedy the unconstitutionality caused by a broad discretionary power granted in the absence of statutory guidance circumscribing its use, the Constitutional Court in Dawood referred the legislation back to Parliament to determine what guidance should be given to the decision-makers.

It is our submission that the Bill should not only address requirements for appointment to the MCC, but should also provide guidance regarding the exercise of ministerial discretion in making appointments to the MCC. In this regard, we propose the following formulation to replace section 3 of the principal Act:

"Composition of and appointments to Council
The council shall consist of not more than 24 members, appointed by the Minister.
Persons appointed to the council must possess suitable qualifications, expertise and experience. When viewed collectively, such persons must have knowledge of and expertise in—
The practice of medicine;
The practice of pharmacy;
The action and application of medicines for human use;
Pharmacology or pharmaceutical chemistry; and
Pharmaceutics.
The Minister may appoint members of council only after consultation with relevant bodies and institutions, including ________________.
(a) The Minister must, before appointing members, by notice in the Gazette and in a national newspaper circulating in every province of the Republic invite all interested persons to nominate, within the period specified in the notice, persons who in the opinion of such interested persons are fit to be so appointed, stating the grounds upon which such opinion is based.
(b) If a suitable person or the required number of persons is not nominated as contemplated in subsection (a), the Minister must appoint an appropriate person or persons who qualify to be appointed in terms of subsection (2)."

We also submit that section 6(2)(b) of the principal Act—as amended by the Medicines Amendment Act—be retained (its deletion is proposed by section 2(a) of the Bill), or that it be redrafted as follows:

"A member of the council shall vacate his or her office—
…
if he or she ceases to hold any qualification necessary for his or her appointment or the reason for his or her appointment to council is no longer applicable; …."

In addition, we submit that Section 6(3) of the principal Act, as amended by the Medicines Amendment Act, be retained (its amendment is proposed by section 2(b) of the Bill) so that it makes reference to the provisions of section 3. Section 6(3) currently reads as follows:

"If the office of any member becomes vacant before the expiration of the period for which he or she was appointed, the Minister may, subject to the provisions of section 3, appoint another person to hold office for the unexpired portion of the period for which his or her predecessor was appointed."

Appeals against decisions of the MCC
As the MCC exercises control over a very lucrative and powerful industry, as well as regulating the safety, quality and efficacy of medicines and medical products, the public interest demands that its decisions be protected from undue influence. The mechanism chosen by the Medicines Amendment Act to ensure fair play is by allowing any person who is aggrieved by a decision of the MCC to refer that decision to an appeal committee comprised of both legal and medical experts. The appeal committee’s decision, in turn, would be subject to a further appeal to the High Court.

In this way, the Medicines Amendment Act seeks to guarantee the independence of the MCC from partisan interests. Although currently regulated somewhat differently under the principal Act, the essential principle regarding independence is nevertheless still maintained. In essence, independent legal and medical experts are tasked with hearing appeals against decisions of the MCC.

In terms of the Cabinet-approved Bill, however, this was to change. Section 12(b) of the Cabinet-approved Bill was to replace section 24(1) of the principal Act so that it reads as follows:

"Any person aggrieved by the decision of the Director-General, the department or the council, as the case may be, may, within the prescribed manner and upon payment of the prescribed fee, appeal against such decision to the Minister for the purposes of the appeal concerned."

Thus instead of the expert appeal committee deliberating on contested MCC decisions, the Cabinet-approved Bill allocated the power to the Minister while simultaneously removing the further right of appeal to the High Court. In essence, the decisions of a regulatory authority dealing with technical matters were to be made subject to appeal to a political office-bearer, without the benefit of that decision being subject to a full appeal to an independent judiciary.

The Bill replaces such a provision by reinstating the provisions dealing with the expert appeal committee, but removing the right of further appeal to the High Court. In the light of recent controversies concerning the MCC and the possible deregistration of nevirapine for use in reducing vertical transmission of HIV, as well as our ordinary concerns regarding the MCC’s institutional independence, we welcome the shift. However, we remain unconvinced that there is no need for a further right of appeal to the High Court, as indicated by the removal of section 24(5) of the principal Act (as amended by the Medicines Amendment Act).

OTHER PROVISIONS
Generic substitution
We welcome the amendment to section 22F of the principal Act extending the obligation on pharmacists to inform prescription holders of the benefits of generic substitution to include all persons licensed in terms of section 22C(1)(a) "to compound and dispense medicines". In addition, we welcome section 7(b) of the Bill which ensures that this obligation is not only applicable within pharmacies but also extended to "any other place where dispensing takes place". These amendments simply recognise that the dispensing of prescription drugs is not limited to pharmacists and pharmacies. 
 
Pricing Committee
In terms of section 8(a) of the Bill, appointments to the pricing committee are limited to terms of a maximum of five years. This is to be welcomed. In addition, section 8(b) of the Bill extends the powers of the Minister, on the recommendation of the committee, to make regulations "on an appropriate fee to be charged by wholesalers or distributors."  In terms of the Medicines Amendment Act, wholesalers and distributors were not affected by price controls. As this had the potential to undermine the objectives of increasing access to medicines, the proposed amendment in this regard is therefore welcomed.

We are concerned, however, that the Bill is silent on the qualifications necessary for appointment to the pricing committee and the process whereby such appointments are made. In this regard, we refer to the arguments made earlier in reference to the composition of and appointments to the MCC. In the result, we submit that section 22G(1) of the principal Act—as inserted by the Medicines Amendment Act—be replaced with the following:

(a) The Minister shall appoint such persons as he or she may deem fit to be members of a committee to be known as the pricing committee.
Persons appointed to the pricing committee must possess suitable qualifications, expertise and experience. When viewed collectively, such persons must have knowledge of and expertise in law, pharmacology, medicine, economics and consumer affairs.
No person may be appointed to the pricing committee if he or she directly or indirectly has financial interests in the pharmaceutical sector.
In appointing persons to the pricing committee, the Minister must take into account the interests of consumers and the ability of persons appointed to work within the National Drug Policy."

CONCLUSION
While the TAC and ALP welcome the opportunity to make representations on the Bill, we nevertheless remain of the view that this process should in no way contribute to further delays in the implementation of the Medicines Amendment Act. Our support for the Medicines Amendment Act is based on recognition of the statute as a reasonable legislative measure taken by the state to increase access to health care services and to promote the achievement of equality. In our view, nothing in the Bill justifies any further delays. In the result, we trust that government will perform its constitutional obligations diligently and without delay.