21 December 2006

Release Date: 2006/12/21

Cape Town – Health and beauty retailer, New Clicks, says the proliferation of quasi-wholesalers in the pharmaceutical sector is inflating the cost of medicine to consumers and the group has called on the country’s healthcare regulators to apply stricter criteria for licensing wholesalers.

Chief executive David Kneale said there had been a sharp increase in the registration of wholesalers since the introduction of single exit pricing and dispensing fee regulations for pharmacists more than two years ago.

“These quasi-wholesalers are essentially retail buying groups formed by community pharmacists which have been granted licenses to operate as wholesalers. They do not offer a full-line service and negatively affect the turnover of legitimate wholesalers,” he said.

In the New Clicks 2006 annual report issued today, Kneale said legislation on the regulation of logistics fees within the single exit pricing environment could occur in the year ahead.

“These regulations could impact on UPD, the wholesale pharmaceutical distributor in the New Clicks stable. In our submissions to the Department of Health we are addressing the registration of wholesalers and also urging the regulator to distinguish between fine and bulk distribution when setting logistics fees. We believe this split is the most effective way of making medicines accessible throughout South Africa.”

“We continue to engage openly and constructively with the Department of Health on this legislation,” said Kneale.

Kneale today expressed disappointment that the new pharmacy dispensing fees, which were due to be implemented from January 1, 2007, have been suspended following a court application by the Pharmacy Stakeholders Forum (PSF).

“We believe the Department of Health has developed a workable and transparent pricing model that provides a fair return to pharmacists and certainly benefits consumers.”

“Delaying the implementation of these regulations only means that consumers will continue to pay higher prices for medicines. We hope that the issue can be resolved speedily. Regardless of the outcome of this application, Clicks is committed to highly competitive pricing.”

“It is critical that we have stability in the pharmacy sector which has been operating in an environment of uncertainty for far too long. This has negatively affected the profession which is a key component of healthcare delivery in this country,” added Kneale.

Issued by Tier 1 Investor Relations on behalf of the Clicks Group
For further information kindly contact
Graeme Lillie, Tier 1 Investor Relations 021 702 3102 / 082 468 1507

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