WEDNESDAY: MINISTRY Paper No. 21/03 listing General Consumption Tax (GCT) Act zero-rated and exempt items tabled in Parliament.
Thursday: Sammy (not his real name), a diabetic, goes to his regular pharmacy to purchase his monthly diabetes drug supplies.
The pharmacist tells him that there had been a run on the pharmacy, for generic drugs, ever since the tabling of the document and the public became aware that the only tax exempted drugs were "any drug specified in the Fourth Schedule (List 4 Drugs) to the Food and Drugs Regulations, 1975, in generic form". Prescription drugs, by the look of things, have been pulled into the 15 per cent GCT tax net.
"The pharmacy was all out of my usual generic drugs by the time I got there on Thursday and even worse, I had to purchase an expensive type of generic drug so I ended up paying almost twice the amount I usually pay for my diabetes drugs," Sammy said.
He has been taking two diabetes drugs for the last year or so Metformin and Danoil. He takes two of each every day a total of four tablets. He spends nearly $900, come May 1, he can expect to pay an additional 15 per cent on prescription drugs $1,035.00. He is now considering how far-reaching the National Health Fund (NHF) will be with the additional taxation cost.
Voluntary, not-for-profit health agencies are also feeling the pinch. Lurline Less of the Diabetes Association of Jamaica, for instance indicates that not only drugs have been pulled in the drag net but medical supplies such as test strips, ECG paper and other sundries which are used in the Association's outreach clinics around the island. These agencies are rushing to beef up supplies before the May 1, deadline.
The $2.5 billion NHF is far less comprehensive, it doesn't underwrite doctors' fees, diagnostic tests, hospital visits; its only focus is on prescription drugs and then only to 70 prescription drugs used in the treatment of 14 chronic, lifestyle diseases. Lobby groups for persons suffering other chronic diseases such as HIV/AIDS and renal diseases are already expressing disappointment that they are not among
the 14.
Registered patients will take their prescriptions to a participating pharmacy and have a portion of the drug cost covered by the NHF. The patient's co-payment is expected to be the difference between the distributor's price and pharmacy's margin or it could be stated that generally the NHF will cover the distributor's price of a drug and the patient will co-pay the balance which is the pharmacy's mark up on the drug. (See example below)
There is now concern that Finance Minister Omar Davies' announcement of the imposition of a 15 per cent General Consumption Tax (GCT) on pharmaceuticals will impact the NHF. Ministry of Health's Health economist, Stanley Lalta said that he doesn't yet have the full information but taxation would affect the NHF's payout and patient's co-payment.
But even with this more narrow focus on pharmaceutical drugs only, Dr. Davidson said that NHF's effect will be far-reaching. He pointed to areas in NHF with far-reaching impact:
disease prevention the focus on health promotion, healthy lifestyle component, wellness and prevention. He said that this is part of the empowerment process, helping the public to become responsible for their health.
institutional aspect strengthening of health institutions at the community level; they can apply for institutional support which Dr. Davidson says is corrective.
targeting outcome he says that once the patient gets a prescription that affects health outcome when he can comply with drug therapy.
"So health promotion is focusing at individual level and then there is institutional support which is both curative and non-curative at the community and regional level. The NHIF was conceptually flawed because it provided a health fund for hospitalisation and it didn't have a strong prevention element. Hospitalisation is the highest
cost of the health structure and undermines primary care,"
Dr. Davidson said.
