Minister of Health NO v New Clicks South Africa (Pty) Ltd 2006 (2) SA 311 (CC)

Minister of Health NO v New Clicks South Africa (Pty) Ltd 2006 (2) SA 311 (CC)

Facts

In 2004, the Minister of Health promulgated regulations under the Medicines and Related Substances Act 101 of 1965 (the Medicines Act) that fixed the prices at which medicines could be sold at all levels of the supply chain, from manufacturer to consumer. The regulations also set out a formula for calculating the dispensing fees that pharmacists could charge.

New Clicks South Africa (Pty) Ltd (New Clicks), a chain of pharmacies, challenged the regulations in court, arguing that they were invalid. New Clicks argued that the Minister did not have the power to fix the prices of medicines and that the regulations were unreasonable and unfair.

Issue

The main issue in the case was whether the Minister had the power to fix the prices of medicines and whether the regulations were valid.

Reasons

The Constitutional Court of South Africa held that the Minister had the power to fix the prices of medicines, but that the regulations were invalid.

The court found that the Minister's power to fix the prices of medicines was derived from section 22A of the Medicines Act. Section 22A gives the Minister the power to make regulations "for any purpose in connection with the control of medicines". The court held that this power was broad enough to allow the Minister to fix the prices of medicines.

However, the court found that the regulations were invalid because they were unreasonable and unfair. The court found that the formula for calculating the dispensing fees that pharmacists could charge was unrealistic and did not take into account the different costs that pharmacists faced. The court also found that the regulations did not make adequate provision for rural and courier pharmacies.

Conclusion

The court held that the Minister had the power to fix the prices of medicines, but that the regulations were invalid. The court ordered that the regulations be set aside.

Summary

The case of Minister of Health NO v New Clicks South Africa (Pty) Ltd 2006 (2) SA 311 (CC) is a landmark case in South African law. The case is particularly important for its analysis of the following issues:

• The power of the Minister of Health to regulate the prices of medicines;
• The principle of reasonableness in administrative law; and
• The role of the courts in reviewing administrative decisions.

Power of the Minister of Health to regulate the prices of medicines

The Minister of Health has the power to regulate the prices of medicines under section 22A of the Medicines Act. This power is broad enough to allow the Minister to fix the prices of medicines.

However, the Minister's power to regulate the prices of medicines is not unlimited. The Minister must exercise this power in a reasonable and fair manner. The Minister must also take into account the different costs that pharmacists face and the needs of rural and courier pharmacies.

Principle of reasonableness in administrative law

The principle of reasonableness is a fundamental principle of administrative law. The principle of reasonableness requires that administrative decisions must be reasonable and fair.

The courts will review administrative decisions to ensure that they are reasonable and fair. The courts will consider the following factors when reviewing administrative decisions:

• The purpose of the decision;
• The information that was available to the decision-maker at the time the decision was made;
• The reasons that were given for the decision; and
• The impact of the decision on the affected person or group of people.

Role of the courts in reviewing administrative decisions

The courts play an important role in reviewing administrative decisions. The courts ensure that administrative decisions are made in a lawful and reasonable manner.

The courts will not interfere with administrative decisions unless they are unlawful or unreasonable. However, if the courts find that an administrative decision is unlawful or unreasonable, they will set the decision aside.

Impact of the Case

The case of Minister of Health NO v New Clicks South Africa (Pty) Ltd 2006 (2) SA 311 (CC) has had a significant impact on the law of administrative law and the law of pharmaceutical regulation in South Africa.