Drug maker Adcock Ingram said on Friday it is "highly likely" that the proposed National Health Insurance (NHI) will face legal challenges, which could delay its implementation.

In June 2023, Parliament approved the NHI Bill despite push-back and growing concern over some of its provisions from healthcare and other stakeholders, with the next step including President Cyril Ramaphosa signing it into law.

In its annual report released on Friday, the pharmaceutical producer of brands such as Panado and Corenza-C, said the bill in its current "is highly likely to be challenged through the court processes, either based on it being 'unconstitutional' or for the re-evaluation of the powers of the ministers".

The minimum implementation period is five to 10 years, assuming any of the legal challenges don't delay the implementation or result in a complete redrafting of the bill, it added.

Other industry stakeholders, including medical schemes operators Discovery and Momentum and other health practitioner groups, have raised concerns about the operability and legality of the NHI Bill while still expressing support for universal healthcare coverage.

It is envisaged that, under the control of state-run administrators, the NHI will pool the funds of all those who earn an income to buy healthcare services.

All patients - those who do contribute funds and those who do not - will be referred for treatment at a particular facility.

There are concerns that this may kill private healthcare, which provides services to 20% of the population of 62 million at an estimated cost of R260-billion.

"The impact on pharmaceutical companies is not explicitly outlined in the bill, relative to how other stakeholders will be impacted," said Adcock Ingram. "The NHI pharmaceutical procurement model is expected to be based on negotiated central pricing, combined with balancing of government policy which prioritises reduced medicine costs."

This would be similar to the current single exit pricing model for the procurement of drugs for state institutions, as well as regulated drugs in which the state centrally allocates the amount and price of drugs to be procured from particular producers during a procurement cycle.

"The presence of a single purchaser of scheduled pharmaceutical products [Schedule 3 upwards] may give the NHI Fund significant buying power," it added.

Once the bill is passed into law, NHI implementation will start with the Minister of Health being required to establish various interim committees and bodies to advise him on the implementation of NHI and the initiation of various legislative reforms during the first phase up to 2026. The second phase will "include the establishment and operationalisation of the NHI Fund as a purchaser of health care services through a system of mandatory pre-payment