100 S African pharmacies closed this year

South Africa's new drug retail regulations introduced in the new year have already accounted for the closure of 100 small pharmacies, as had been predicted by opponents of the changes (Marketletter November 27, 2006).

Jasson Urbach, an economist with the Johannesburg-headquartered Free Market Foundation in South Africa, said: "price controls are normally promoted and devised under the guise of assisting the poor and alleviating poverty. Yet, in almost every case, it is the poor that suffer most from price controls. In South Africa and most other countries, it is the rich that have access to the high-volume, low mark-up retailers that can offer cheaper goods in large urban areas. South Africa's poor generally shop in low-volume, high mark-up establishments in townships simply because they are conveniently located. However, price controls tend to penalize the low-volume establishments that serve the poor, therefore forcing them to travel to urban centers, incurring costs and inconvenience in order to shop."

The Pharmaceutical Society of South Africa has recorded over 100 small pharmacies closing down since the new year. The group also forecasts up to 75% of small pharmacies could close down as a consequence of the new drug regulations.