Nompumelelo Magwaza and Reuters
SOUTH Africa planned to spend $2.2 billion (R24bn) over two years to buy HIV/Aids drugs for public hospitals, Trade and Industry (dti) Minister Rob Davies said yesterday.
Speaking at the Port Elizabeth manufacturing plant of drugmaker Aspen Pharmacare, Davies said the government aimed to buy three quarters of the drugs from local manufacturers. “We are on the cusp of an important tender worth R24 billion by the Department of Health that is for the procurement of antiretrovirals for 2015.”
Davies’s visit was in line with the government’s focus on bolstering growth in the pharmaceutical industry according to its Industrial Policy Action Plan (Ipap).
The industry has been identified as a lever that was key to the country’s growth and development objectives. South Africa has reserved 70 percent of government drug purchases for local manufacturers.
Through the dti, the government also aims to promote local manufactures through the Preferential Procurement Policy Framework. The initial steps towards this framework in joint agreement between the dti, health and treasury departments was for local manufacturers to produce tablets and capsules for the state.
Aspen has been one of the companies to be awarded a tender to produce antiretrovirals (ARVs) for the Health Department. Its site has the capacity of producing 12 billion oral dosage forms annually.
Davies said although much had been attained in Aspen’s manufacturing site, even greater industrial capacity could be unlocked between it and the department.
“Our joint aim is to achieve further domestic investment, a focused export support and orientation and further job creation,” he said.
He added that pharmaceuticals, together with medical devices and diagnostics, were the fifth-largest contributor to the current account deficit that was so costly to the country.
Davies said the government’s policy on intellectual property sought to strike a balance between the needs of public health and the interests of innovative pharmaceutical companies.
“The aim of the intellectual property relating to health provisions is to bring South Africa’s laws in line with international agreements, including the World Trade Organisation’s trade-related aspects of intellectual property rights, which has legal flexibility measured that effectively allow countries to have policy space access to public health and education.”
Davies said that generic medicine which came from innovative medicine would also be allowed. “Ipap requires for pharmaceutical companies to be incentivised if they invest in the country, like the motor manufacturing industry has.”
Aspen’s group chief executive, Stephen Saad, said billions of rand had been invested in capex enhancements at its facility over the years. “Aspen has shown that globally competitive manufacture is possible in South Africa if our strategy is sound and you are prepared to invest in technology and skills.”
He added that the site remained key to the group’s worldwide business and was the location of the most important production capabilities.
“Aspen values its relationship with the dti and welcomes working alongside it in order to further unlock investment, market access and export opportunities in South Africa and across broader geographies.”