Minister of Health and Another NO v New Clicks South Africa (Pty) Ltd and Others (Treatment Action Campaign and Another as Amici Curiae)

• Jurisdiction: South Africa
• Judge: Chaskalson CJ, Langa DCJ, Madala J, Mokgoro J, Moseneke J, Ngcobo J, O'Regan J, Sachs J, Skweyiya J, Van Der Westhuizen J and Yacoob J
• Judgment Date: 30 September 2005
• Counsel: M T K Moerane SC (with him P Coppin and B Vally) for the applicants/appellants J J Gauntlett SC (with him A E Bham) for the first respondent W H Trengove SC (with him A Cockerell and M du Plessis) for the second to eighth respondents D I Berger SC (with him F Ismail and A Hassim) for the first Amicus Curiae.
• Docket Number: Case CCT 59/2004
• Court: Constitutional Court

The Court: A

[1] The Medicines Act was first enacted in 1965. [1] It has been amended on no less than 15 different occasions since then. From 1965 until 1997 the main focus of the Medicines Act was quality control. [2] In 1997 measures were introduced into the legislation directed towards making B medicines more affordable. [3] This, to give effect to the State's constitutional obligation to provide everyone with access to health care services. [4]

[2] The newly introduced measures, especially those contained in ss 15A - C, ss 18A - C and ss 22B - H, do not fit comfortably into an Act designed to serve other purposes. They pose new problems for those who have to implement them, for those who are directly affected by them C as well as for those who have to adjudicate them. The grafted sections make provision for controls to be introduced in respect of the production, importation, distribution and sales of medicines, [5] the relaxation of certain patent restrictions, the promotion where possible of generic substitution of D medicines, and the establishment of a Pricing Committee to make recommendations for the introduction of a pricing system for all medicines sold in the Republic.

[3] The new measures provoked strong opposition from within the pharmaceutical industry, including litigation challenging the validity of certain of the provisions of the amending legislation. The 1997 Act E was meant to be brought into force by proclamation. However, from 1997 until 2002 the amending legislation remained dormant. [6] In 2002 the dormant provisions were amended by the Medicines and Related F

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Substances Amendment Act 59 of 2002, and the sections as amended A were brought into force on 2 May 2003. [7]

[4] The present litigation arises out of regulations made to give effect to the pricing system for the sale of medicines by the Minister of Health (the Minister) on the recommendation of the Pricing Committee. The validity of these regulations has been challenged, and the challenges have been the subject of contrary decisions in the Cape B High Court (the High Court) and the Supreme Court of Appeal (SCA). The proceedings aroused extensive public interest and a great deal of emotion.

In the High Court C

[5] In May 2004 two applications challenging the regulations on various grounds were instituted in the High Court by, in the one case, New Clicks and, in the other, the Pharmaceutical Society of South Africa (PSSA) and others (for ease, the applicants in both cases are referred to as 'the Pharmacies'). The challenges included an attack D on the functioning of the Pricing Committee, the procedures used by the Pricing Committee and the substance of the regulations promulgated by the Minister on the Pricing Committee's recommendation. The Pricing Committee chose to abide the decision of the High Court.

[6] The matters were consolidated and heard by a Full Bench of E three Judges. Judgment was handed down on 27 August 2004. A majority dismissed the challenges to the regulations while a minority judgment held that the regulations should be set aside on various grounds. [8] The applicants sought leave to appeal against the order of the High Court, and the application for leave to F appeal was by agreement heard in the High Court on 20 September 2004. Judgment was reserved.

In the SCA

[7] There was a delay in delivering judgment on the application for leave to appeal, and the Pharmacies decided to approach the SCA G directly for leave to appeal. On 10 and 11 November 2004 they lodged applications in the SCA for leave to appeal. The SCA set the matter down for argument on 30 November and 1 December. Counsel for the Minister contended that the SCA did not have jurisdiction to hear the appeal, as no decision had yet been given on H the Pharmacies' application for leave to appeal, and asked for argument on the issue of jurisdiction to be separated from argument on the other issues raised in the application. The SCA, however, directed that both the question of jurisdiction and that of the merits be dealt with at a single hearing. At the hearing counsel for the Minister persisted in the position that only the question of I

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jurisdiction be entertained at that stage. When the hearing went A ahead on both aspects, counsel for the Minister declined to present any argument on the merits.

[8] On 3 December, after the hearing but before the SCA had given its judgment, the High Court delivered a judgment in which it ordered by a majority that leave to appeal be B refused. [9] On 20 December the SCA handed down a unanimous judgment holding that it had jurisdiction to hear the matter, granting leave to appeal and holding the regulations to be invalid. [10] The Minister and the Pricing Committee then applied for leave to appeal to this Court against the decision of the SCA. They later made a separate application to this Court for a declaration to the effect that the lodging of the C application for leave to appeal automatically suspended the order of the SCA. A separate judgment refusing that application is to be handed down at the same time as this judgment. The applications were heard together in this Court on 15 and 16 March. [11]

In this Court D

[9] The application for leave to appeal to this Court was brought on behalf of the Minister and the Pricing Committee. The Pharmacies contended that the Pricing Committee, having elected to abide the judgment of the High Court, was not entitled to appeal against the decision of the SCA. This Court will not ordinarily grant leave to a party who has abided the decision of the lower Court to appeal to this Court against the decision given by that Court. There may be special E circumstances where that would be permissible. This is not an issue, however, that needs be decided in this judgment. The application for leave to appeal to this Court is against the order made by the SCA. It appears from the record of the proceedings in the SCA that the Pricing F Committee lodged an affidavit opposing the application for leave to appeal to that Court. The SCA judgment refers to the argument being addressed to them, and the appeal being opposed by, 'the respondents'. There is nothing, however, to indicate whether objection was taken to the standing of the Pricing Committee to oppose G the application or whether this issue was considered by the SCA.

[10] In this Court the Minister and the Pricing Committee were both represented by the same attorneys and counsel and relied on the same record, the same application and the same arguments. Nothing turns on whether the arguments must be dealt with as having been addressed to H

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us on behalf of them both, or on behalf of the Minister alone. In A particular, there is no prejudice to the Pharmacies in so doing. In the circumstances, and since it appears that the Pricing Committee opposed the application for leave to appeal to the SCA and was party to those proceedings, we have decided that it should be allowed standing to participate in the appeal to this Court as well. B

[11] The Minister and the Pricing Committee argued that the SCA had not had jurisdiction to hear the appeal on the merits and that the appeal should succeed on that ground alone. They contended further that the Minister had complied with the terms of the Medicines Act when making the regulations. [12] The Pharmacies argued that the SCA had been entitled to hear the appeal and that, both in C terms of the process followed and in regard to their substance, the regulations had failed to comply with the requirements of the Medicines Act. More particularly, they claimed that the fee the pharmacists were allowed to charge was not 'appropriate' as required by the Medicines Act. D

[12] Although the Court was aware of the need to bring to an end the uncertainty that reigned in the pharmacy sector, it was obliged to give full and appropriate consideration to the many questions raised. On most matters the Court is unanimous. On certain issues, including the question whether the dispensing fee to be charged by the pharmacists is appropriate, members of the Court adopt different E positions. There are five separate judgments dealing with the merits, and three short judgments indicating concurrences. Taken together the judgments deal with a wide-ranging number of complex legal and factual issues. The summary that follows reflects the key issues raised, the positions taken by each member of the Court on those issues and the F order made by the Court.

The issues raised and the conclusions reached

[13] A list of the principal issues and conclusions follows:

1.

Did the SCA have jurisdiction to hear the appeal by the pharmacies? The Court holds unanimously that it G did. [13]

2.

Was the SCA entitled to hear argument on the merits of the appeal and to deliver a judgment on the merits in the absence of any argument on the merits by the Minister? The Court holds unanimously that it was. [14]

3.

Despite the decision not to argue the merits of the case H before the SCA, are the Minister and the Pricing Committee entitled to appeal to this Court? The Court holds unanimously that, given the circumstances of this case, they are. [15]

4.

Does the Promotion of Administrative Justice Act 3 of 2000 (PAJA) apply to the recommendations of the Pricing Committee and the I

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subsequent making of regulations by the Minister? A Five members of the Court hold that PAJA is applicable. [16] One member of the Court holds that PAJA is applicable to the fixing of the dispensing fee only; [17] and five other members of...