Minister of Health and Professor D McIntyre NO v New Clicks South Africa (Pty) Ltd and Others

The Minister of Health, on the recommendation of a Pricing Committee, promulgated regulations under section 22G of the Medicines and Related Substances Act to introduce a transparent pricing system for medicines. The regulations introduced a single exit price (SEP) for medicines and a capped dispensing fee for pharmacists. New Clicks and the Pharmaceutical Society of South Africa (PSSA) challenged these regulations, arguing that the dispensing fees would render pharmacies economically unviable, thereby undermining access to medicines. The Cape High Court dismissed the challenge with the majority upholding the regulations. On appeal, the Supreme Court of Appeal (SCA) declared the regulations invalid and of no force. The Minister and Pricing Committee appealed to the Constitutional Court.

• Whether the Promotion of Administrative Justice Act (PAJA) applies to ministerial regulation-making
• Whether the procedures followed by the Pricing Committee and Minister complied with requirements of procedural fairness under PAJA
• Whether specific regulations concerning single exit prices are void for vagueness or constitute unlawful delegations of power
• Whether the dispensing fees set by the regulations are 'appropriate' as required by section 22G(2)(b) of the Medicines Act
• Whether the regulations unjustifiably limit the right to freedom of trade, occupation and profession under section 22 of the Constitution

The appeal was upheld in part. Various specific regulations were declared invalid but with reading-in and severance to cure defects. Regulations 10 and 11 (dispensing fees) were declared invalid and remitted to the Pricing Committee and Minister for reconsideration. Until new regulations are made, pharmacies may charge a dispensing fee. The Minister was ordered to republish the amended regulations within 60 days. The Minister was ordered to pay half the costs of the pharmacies in the Constitutional Court and High Court, and all costs in the SCA.

The binding legal principles established are: (1) The exercise of public power to make regulations constitutes administrative action subject to review under PAJA and the Constitution; (2) Administrative bodies making regulations must follow procedures that are fair, transparent and allow for meaningful public participation; (3) Regulations must be authorized by their empowering statute and must not improperly delegate powers; (4) Regulations must be sufficiently clear and certain to enable those bound by them to understand their obligations; (5) Where legislation requires a fee to be 'appropriate', this is an objective standard subject to judicial review, requiring a balance between competing interests (here, affordability of medicines and viability of pharmacies); (6) Decision-makers must properly consider all relevant factors and must be able to explain and justify their decisions, particularly where fundamental rights are affected; (7) The right to access health care services under section 27 of the Constitution authorizes and requires the state to take reasonable measures to make medicines affordable and accessible.

Several judges made important observations: Chaskalson CJ noted that in a constitutional democracy, all public power must be exercised lawfully and subject to judicial scrutiny, and that the days of top-down government without accountability are over. Sachs J developed an extensive analysis distinguishing between administrative action (adjudicative decisions) and subordinate legislation (rule-making), suggesting the latter should be controlled through an expanded principle of legality rather than through PAJA. He emphasized that constitutional democracy requires both procedural (transparency, participation) and substantive (reasonableness, proportionality) controls on subordinate legislation. Ngcobo J emphasized that the viability of pharmacies is a relevant consideration in fixing dispensing fees because without pharmacies, access to medicines would be compromised. Moseneke J stressed the constitutional imperative to root out poverty and the importance of affordable medicines as part of poverty reduction and the well-being of all people. Multiple judges emphasized that the principle of 'status quo neutrality' should not be used to block transformation or freeze inequitable aspects of society.

This is a landmark judgment on the scope of administrative law in South Africa. It clarified that: (1) The implementation of legislation, including regulation-making, constitutes administrative action subject to PAJA (majority view); (2) Courts have power to review regulations for lawfulness, reasonableness and procedural fairness; (3) The doctrine of legality requires that all public power be exercised lawfully and is subject to constitutional control; (4) Socio-economic rights, particularly the right to access health care services under section 27, impose positive obligations on the state to take reasonable measures to make medicines affordable and accessible; (5) Courts will scrutinize administrative decisions to ensure relevant considerations are properly taken into account; (6) Administrative bodies must provide adequate reasons and explanations for their decisions, particularly where they significantly affect rights. The judgment demonstrates the Court's careful balancing between deference to executive expertise in complex policy areas and robust constitutional review to protect fundamental rights.