Medical aid costs could fall by 10 to 20% thanks to new drug pricing regulations, which were expected to yield a drop of up to 70% in medicine prices, medical aid administrator Medscheme said yesterday.

"Medicines comprise 25 to 30% of the average medical aid premium, so the claimed 40 to 70% savings would have a dramatic effect on the cost to the consumer," Medscheme group services managing-director Gary Taylor said in a statement.

"Medical aids may see a real reduction of 10 to 20% if the savings in medicine costs projected by the draft regulations materialise".

Health Minister Manto Tshabalala-Msimang unveiled the new regulations in Pretoria on Thursday, saying they should see massive drug price cuts by May.

The regulations, currently in draft form, made provision for a transparent medicine pricing system and limited distribution and dispensing fees.

They are to be published in the Government Gazette yesterday as part of the Medicines and Related Substances Control Amendment Act, and should come into effect on May 2.

The draft document compels manufacturers and importers to drop by at least 50% the price of medicines listed as yesterday, January 15. Annual price rises would be limited to a ceiling determined by the government in line with inflation and exchange rate considerations.

The regulations determine that wholesalers or distributors could add no more than 15% to the manufacturer's exit price of a medicine under R40, and a maximum R6 fee for more expensive drugs.

Pharmacists could charge a dispensing fee of no more than R24. Taylor said the medical aid industry welcomed initiatives allowing it to keep premiums affordable.

"The support of the medicine manufacturers and pharmacists will be essential to ensure that the new regulations translate into real savings for the consumer," he said.

Medscheme predicted that any real impact would only be felt late this year, as the industry would need some time to adjust to the changes.

The Pharmaceutical Society of SA (PSSA) has also welcomed the move.

"This is strongly supported by the Pharmaceutical Society of South Africa because it removes the focus from the price of medicine as a mere commodity of trade," it said on Thursday.

"(It) shifts it to providing an appropriate medicine for the indication.

The objective of a transparent pricing system is to bring equity into the system". – Sapa.