The National Department of Health’s decision to give the lion’s share of the latest R15.5bn Aids drug tender to Aspen Pharmacare but shun many of the country’s biggest pharmaceutical manufacturers has received a backlash, reports Business Day.
Boosting Africa’s capacity to make its own vaccines and medicines has long been urged by leaders and the African Union, but this latest Aids drug tender sees only Aspen maintaining a share of the core R12.6bn contract to supply the daily pill taken by most adults, which combines tenofovir, lamivudine and dolutegravir (TLD).
Cipla and Sisonke, which won a portion of the TLD contract in 2022, lost out completely, while Adcock Ingram failed in its bid for the second consecutive time.
The three-year tender runs from 1 December and splits the R7.25bn TLD contract for monthly packs between eight companies, dividing the R5.38bn TLD contract for three-month packs between seven firms.
Aspen, Emcure, Innovata, Barrs, MacLeods, Viatris and Aurobindo won a share of both contracts, while Pharma Dynamics won a share of the monthly pack contract only.
“It’s really disappointing that they have just gone with the lowest possible pricing,” said Adcock Ingram’s prescription MD, Ashley Pearce.
As part of its routine tender process, the Health Department had asked Adcock Ingram if it could improve its initial bid price, but its final offer was still not low enough to win a share of the contract, Pearce said.
Cipla Africa CEO Paul Miller said the company’s TLD price had been only slightly higher than the last successful bidder. “It was disappointing to see that 1% would rule us out of being a participant when we have invested in local manufacturing for many years,” he said.
University of KwaZulu-Natal pharmacologist Andy Gray said that while some local manufacturers might have a legitimate case for promoting local production, there was no clarity on how this should be achieved.
“Merely relying on the department paying a premium is unsustainable, especially given the pressures on the health budget. Other means have to be employed, like tax breaks or other industrial incentives, which would allow for competitive pricing,” he said.
Stavros Nicolaou, Aspen Pharmacare’s head of strategic trade, said the company was pleased to retain its contract for TLD but disappointed that so many local players were excluded.
Health Department spokesperson Foster Mohale said six of the seven companies that won a share of the three-month supply contract met the tender specifications for local manufacturing.
“Local manufacturers are included wherever possible, and their role is vital for building resilience, creating jobs and ensuring future security of supply.”
The department had saved more than R548m compared with the initial bid prices for supply contracts that involved multiple bidders, including reductions on the price of TLD, he added.
Concern
Speaking on behalf of Pharmaceuticals Made in SA (Pharmisa), Nicolaou said the organisation had written to Health Minister Aaron Motsoaledi to express its concern about the lack of alignment between the department’s procurement practices and the government’s localisation objectives, which risked de-industrialising the pharmaceutical sector.
While short-term savings might be provided by companies that were not local manufacturers, in the long run supporting them at the expense of domestic producers would cost SA tax revenue and jobs, he added.
Mohale said: “Pharmisa recommended interventions such as take-off agreements tied to reference pricing, prioritisation of local producers in tenders and the development of a co-ordinated national strategy with Health, the Department of Trade Industry & Competition, National Treasury and the Department of Science, Technology & Innovation.”
Motsoaledi had asked President Cyril Ramaphosa to direct the Ministers of the relevant departments to develop a coherent national plan to strengthen local manufacturing and secure SA’s medicine supply, he said.
BusinessLIVE article – Aids drug tender shuns key local manufacturers (Restricted access)
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