The Black Pharmaceutical Industry Association (BPIA), which says less than 1% of the domestic market is held by black-owned firms, has added its voice to criticism of the Health Department’s procurement processes, claiming that black-owned companies are being hobbled by lack of government support, while still battling to overcome the apartheid legacy, reports Business Day.
Chairperson Kingsley Tloubatla of the BPIA – an advocacy group of more than two dozen black-owned firms, including manufacturers, wholesalers and pharmacies – said white-owned firms had benefited from direct support from the apartheid government, but black-owned companies remained locked out of South Africa’s R56.4bn pharmaceutical market.
Echoing many of the concerns raised in Parliament last week by Pharmaceuticals Made in South Africa (Pharmisa), Tloubatla said more than 2 000 jobs had been lost in the sector in the past 18 months due to lack of government support, with more than 40 pharmaceutical manufacturers having closed since 1994.
“We are discouraged from producing locally, not incentivised. The Minister (of Health) says we cannot produce cheaper than India, but that is true, because those companies operate from special economic zones with export incentives. All finished products are zero-rated, yet when I want to bring in a tableting machine, I’m charged import duty,” he told Business Day.
Tloubatla urged the government to support local players by introducing a list of restricted medicines that could not be imported, fast-tracking the registration of locally manufactured pharmaceutical products, and providing long-term supply contracts of 10-20 years instead of the three-year tenders it presently awarded.
He also called on the Health Department to review its decision to permit only a 1.47% increase in the price of medicines sold in the private sector in 2026, since it was significantly below inflation.
Additionally, the department should introduce explicit transformation quotas in its tenders, with a share of the contracts reserved for black-owned manufacturers, he added.
Pharmisa chair Stavros Nicolaou recently told MPs n the Portfolio Committee on Trade, Industry & Competition that the health department’s focus on price was excluding local players from contracts and jeopardising the government’s plans to reduce reliance on imports.
But in a response, the department said Pharmisa had presented a distorted picture that underplayed issues like the cost of increasingly stringent regulatory requirements.
It said it had “a constitutional duty to procure affordable medicines from reliable sources” and rejected Pharmisa’s analysis.
Business Day article – Black firms claim exclusion from R56bn pharma market (Restricted access)
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