Ascendis CEO Karsten Wellner. Picture: TREVOR SAMSON
Ascendis CEO Karsten Wellner. Picture: TREVOR SAMSON

JSE-listed healthcare company Ascendis is pulling products from the market to comply with the Department of Health’s tough new regulations for complementary medicines.

The company estimated on Monday that up to 9% of group turnover would be affected.

Ascendis’s disclosure is significant as few companies operating in the R7bn complementary medicine industry have been willing to discuss details of how the new laws — which have met vocal opposition — affect their bottom line.

Ascendis CEO Karsten Wellner admitted the new laws were proving costly and time-consuming, estimating they affected about 20% of the turnover of Ascendis’s biggest complementary medicine brand, Solal, and 8% to 9% of group turnover.

It had already stopped selling several products, including vitamins and hormones, and dehydroepiandrosterone (DHEA), he said.

"We are ticking all the regulatory boxes. It is a lot of work, it’s expensive," he said in a telephone interview. "We have to absorb it, as we can’t increase prices."

Ascendis had attempted to mitigate the effect of the regulations by applying for temporary exemptions for some products, such as the sleep hormone melatonin, and was reformulating others, said Dr Wellner.

It was seeking new export markets in countries that had less onerous regulatory requirements. These efforts should ultimately reduce the effect of the regulations to about 2% to 3% of group turnover, he said.

The complementary medicines industry is in an uproar over the regulations, which for the first time bring government oversight to the sector. The Health Products Association (HPA) of Southern Africa, which represents 114 companies, last month asked the North Gauteng High Court to scrap the regulations, arguing they were vague, contradictory and unconstitutional.

The regulations, which came into effect on November 15, say products that meet a tight new definition for complementary medicines can stay on the market until they are called up for assessment by the regulator.

But all other products making medicinal claims must now meet strict safety and efficacy criteria laid down for allopathic (western) medicines and can no longer be sold unless registered with the Medicines Control Council. The regulations also require that products containing banned substances be withdrawn, and new labelling rules for complementary medicines be introduced.

The HPA’s court papers argued that Health Minister Aaron Motsoaledi acted beyond his powers in publishing the regulations, that the regulations claimed to replace a set published on April 15 2005, but that no such regulations were published. Regulations were in fact published on April 10 2003, said the HPA.

"The constitution requires laws that are clear," said HPA attorney Neil Kirby. "We’ve made it clear this is not a debate about whether complementary medicines should be regulated; we just want regulations that make sense."

The department’s Anban Pillay said the minister would oppose the matter.

"The unforeseen and most certainly unintentional consequences of these regulations, which do not adequately provide for roughly 60% of CAMS products currently on the market, threaten the immediate survival of a great many reputable companies which sell safe, quality products that can substantiate their advertising claims," said Norman Fels, chairman of the Health Products Association of Southern Africa.

Mr Fels claimed the regulations were already leading to job losses, but could not provide specific examples of companies that had laid off staff as a direct result of the new laws.

He said many "safe, good quality products" would soon disappear from retailers’ shelves, depriving consumers "of their constitutional right of freedom of choice of their health modality".

JSE-listed health and Beauty retailer Clicks said it was working with its suppliers to ensure regulatory compliance. "We have already removed a number of products from our shelves," it said but did not provide details.

Ascendis subsequently disputed the numbers in this story, and sent an email to shareholders on Tuesday morning advising them that only 1.6% of Ascendis's annualised turnover was potentially affected by the regulations.

The email read as follows: "The correct percentage of Group turnover potentially impacted by the Complimentary (sic) Medicine (CAMS) regulations is calculated as follows:

1. Solal is 8% of Ascendis's annualised turnover

2. Up to 20% of Solal's sales are potentially impacted by the CAMs regs, which therefore amounts to 1.6% of Ascendis's annualised turnover being potentially impacted."

Ascendis's share price fell to as low as R9.80 on Tuesday morning from Monday's closing price of R10.20 before recovering to about R10 by midday on Tuesday. At 27,339 shares, the volume of shares traded by midday on Tuesday was small.

Business Day recorded the interview with Karsten Wellner, in which he repeatedly said that between 8% and 9% of group turnover was affected by the CAMS regulations.