Pharmaceuticals manufacturer Adcock Ingram has called for government incentives to give South African companies a reason to stay in business, warning that continuing global shortages of active ingredients threaten medicine supplies in the country.
Adock, which sells various household name brands here, including Panado, Gen-Payne, Myprodol and Corenza-C, has shifted production of some of its key products to South Africa because of the reduced supply of ingredients, reports News24.
The company said last week that to offset the threat of global ingredient shortages and protectionism to some extent, it is ensuring it has multiple suppliers, and is stockpiling products and active ingredients when necessary.
Although it has three facilities in SA, CEO Andy Hall still flagged ingredient shortages as a risk, as most pharmaceuticals here come from other countries.
Between 50% and 60% of its entire basket sold was imported, either as finished products, or as active ingredients, before being converted into products locally.
The company has urged the government to favour local producers when it comes to medicine tenders, saying price should not be the only consideration influencing procurement.
‘A bit of a problem’
Hall said incentives were imperative to give local manufacturers a reason to keep their factories operating.
“We are seeing some global shortages of active ingredients – in active ingredients in some of our cough mixtures; and in some preservatives …” he said.
He added that “we are experiencing a degree of protectionism … from foreign countries”.
This protectionism is in part an after-effect of the pandemic, when “countries made sure they looked after themselves before they looked after their neighbours”.
And while it has eased somewhat, Hall says Adcock and several others that rely heavily on India for imports have encountered “a bit of a problem”.
Panado tablets mainly come from India from a joint venture manufacturing facility there, but this past year, Adcock Ingram started making it at a Gauteng factory to reduce reliance on foreign jurisdictions. Some production of Myprodol and Gen-Payne is being moved to the same plant, he added.
Other key products in the stable – including cough mixtures – are already manufactured locally because transport costs make them too expensive to import.
The group also manufactures its powders and effervescent products locally as they were subject to humidity controls, making imports problematic, and manufactured its eye drops and intravenous and renal fluids in SA.
But Hall said the biggest risk facing Adcock Ingram was the proportion of imported goods it brought in and how rand weakness affected that, relative to the single exit price increase for products regulated by pricing controls.
“That still remains our biggest risk – what’s happening with the rand is what keeps us up at night.”
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