South Africa Approves Second Single Exit Price Adjustment for 2026

Acting Minister of Health S.T. Ndabeni has authorised a second single exit price adjustment for 2026 of 2.88%, applied to all registered medicines on the database dated 30 September 2026 and effective 1 October 2026. The notice calls the move extraordinary and says it must not be regarded as a precedent.

Six weeks earlier the same department told industry that local manufacturing stress was primarily regulatory, particularly the SEP adjustment, not tender policy. This notice is the department acting on that lever.

The single exit price adjustment

The determination is made under the Medicines and Related Substances Act 101 of 1965. The minister has decided that the single exit price (SEP) of medicines and scheduled substances may be adjusted for the second time in 2026 by 2.88% of the SEP and related pack sizes on the medicines database of 30 September 2026, “regardless of how that SEP was arrived at in the 2026 cycle.” The new SEP takes effect on 1 October 2026.

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The award carries three operating rules:

• No SEPU processing between 15 and 30 September 2026, so the 30 September database can be locked.
• Any SEP update filed after 1 October 2026 must use the 1 October 2026 base.
• All applications under Regulation 9, for individual increases outside the annual formula, are reset. Filings submitted in 2026 that are still unresolved at publication are deemed withdrawn.

The first 2026 single exit price adjustment, gazetted 28 November 2025 as Notice 6881, capped the annual increase at 1.47% on the 22 December 2025 database. If a holder took the full first award and now receives the full second award on the already uplifted price, the compound 2026 list price move is about 4.39%.

Dual in-year single exit price adjustments have happened only three times: 2016 (4.80% plus 2.90% interim, 7.84% compound), 2023 (3.28% plus 1.73% top-up, 5.07%), and 2026. 2024 and 2025 each had a single award (2025: 5.25%). 2026 is unusual in frequency, not generosity: even stacked, it is smaller than 2023 and far smaller than 2016.

Why the second award landed in September

The 1.47% opening award was the tightest recent annual cap, and industry had already put that number on the record.

In mid-August 2026 Syenza News reported Pharmisa’s case to Parliament’s Portfolio Committee on Trade, Industry and Competition: more than 2,500 jobs lost in 18 months, falling local tender value shares (ARVs from 72% in 2008 to 28% in 2025; solid dose from 56% in 2014 to 18%), plant closures, and a private sector SEP rise of only 1.47% against CPI of about 3.6% and sectoral wages of about 6%. The Pharmaceutical Task Group had asked for a 3.2% 2026 SEP increase. Short three-year tenders, high input costs and Asian import competition were the rest of the brief.

The department’s reply, reported by Syenza News on 26 August, is the immediate political context for this gazette. The National Department of Health said industry’s figures used the wrong definition of local, that volume shares of locally produced product had risen on the solid dose and ARV tenders, and that the challenges are primarily regulatory in nature, particularly the SEP adjustment and SAHPRA enforcement actions resulting in the closure of manufacturing sites, and are not related to public procurement. It warned against regulatory capture and said government should not be the guaranteed end market for local plants.

The second 2026 single exit price adjustment is the department using the instrument it named. It does not concede Pharmisa’s procurement argument. It does not lengthen tenders or rewrite local content. It moves the private list price, mid-year, after a 1.47% opening that the department itself later described as part of the industry’s regulatory problem.

What the notice does not settle

Public procurement versus private SEP. The SEP is the price at which a manufacturer must sell to anyone other than the State. State tenders sit on a different track. Localisation politics, including lowest price awards, import share, 70% of purchases in the public sector, and the ARV, vaccine and solid dose tenders, are unchanged by this notice. The 2.88% does not referee that dispute.

Regulation 9. The safety valve for product specific hardship is closed for unresolved 2026 files. Holders that tried to argue API, forex or line cost shocks outside the 1.47% formula start again after 1 October, on a higher base.

Launch SEP and value. Syenza’s longer pricing framework argument still holds: the annual, and now mid-year, single exit price adjustment controls the increase, not the entry price, and forbids private volume discounts. High demand classes such as GLP-1s, which Syenza has tracked through Extensior, grey market volumes and scheme affordability, receive the same 2.88% as a mature generic. No indication based or value based price is created. Syenza tracks how these prices move over time through SEPTrack, which follows the price of every medicine in South Africa as one continuous record across more than 15,000 products and sixty-plus single exit price databases reaching back to December 2009. The platform shows a product’s full price path against inflation, how quickly generics erode an originator’s price, and how affordability has shifted in real terms.

Schemes and NHI. Medical scheme contribution growth has been running ahead of CPI; CMS work on a base package, LCBOs and a multilateral tariff forum is separate. NHI remains in court. October SEP files will feed scheme reimbursement and dispensing fee bands regardless.

Three dual years in a decade

2016 and 2023 still required applications and a 32 working day implementation clock. 2026 applies 2.88% to the whole locked database, freezes SEPU for two weeks, and withdraws open Regulation 9 files. That is a harder administrative cut than the earlier top-ups, even though the full year percentage is smaller.

Immediate implications

Manufacturers and importers should confirm every SKU that must receive 2.88% is on the 30 September 2026 database of medicine prices, and should not file SEPU between 15 and 30 September. Recast post-1 October updates off the new base. Treat unresolved 2026 Regulation 9 files as dead. Model compound 2026 SEP only where the first 1.47% award was in fact taken.

For local manufacturers in the Pharmisa fight, this is relief on the private list, not on tender preference. It answers the department’s own “SEP is the issue” framing more than it answers Cosatu, Giwusa or BPIA. Public volume economics, three year contracts and the definition of local remain the open industrial policy file.

For schemes, pharmacies and patients, private exit prices rise 2.88% on 1 October on top of whatever of the 1.47% was implemented earlier. That flows into reimbursement and dispensing fee bands. It does not automatically move tender prices.

On policy, three dual years in a decade, each with a no precedent clause, means a mid-year top-up is now a contingent instrument when the opening award is tight, not a right.