South Africa's biggest HIV drug tender has been set aside by the Gauteng High Court (Pretoria), which found that the contracts awarded were unconstitutional and invalid, and ordered the National Department of Health to restart the process from scratch, notes MedicalBrief.
The court ruled that two companies – Viatris and Innovata – which won the lion’s share of the R15.5bn HIV drug tender should have been disqualified, while Cipla, which brought the challenge, was unfairly shut out, reports Business Day.
Acting Judge Graham Girdwood set aside the two contracts for monthly and three monthly packs of pills containing tenofovir, lamivudine and dolutegravir (TLD), which have a combined value of R12.63bn, and gave the department 120 days to reconsider eligible bidders and revise how the contracts are split.
The total tender for ARVs, which came into effect in December 2025, is worth R15.5bn, of which R12.6bn is for fixed-dose combinations of the drugs packed in one-month and three-month packages.
The tender was split between various pharmaceutical companies. Local manufacturer Cipla Medpro Manufacturing, which has a strong track record of supplying drugs in the market, did not receive an award to provide the one-month or three-month packs, and scored three smaller awards worth R215m.
Girdwood suspended the setting aside of the awards for 90 days after the department finalises the revised award, and in the meantime, current suppliers would keep delivering to avoid a drug shortage.
The judgment follows separate legal challenges to the tender brought by Cipla and Hetero SA, which were later combined. Both companies were shut out of the two tenders for TLD.
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.
Girdwood found Cipla had been unfairly excluded from the tender process and ordered that it be included in the department’s reconsideration of the awards. The department’s decision to exclude it from negotiations on the grounds that its price was more than 10% higher than that of the highest scoring bidder was arbitrary and irrational, as this rule had not been disclosed, he ruled.
And Innovata and Viatris should have been disqualified from the start, because they did not hold valid local manufacturing licences when the tender bid window closed, in contravention of the tender rules.
The court found that Barrs and Aurobindo had been irregularly granted local manufacturing status, with the department failing to verify the historically disadvantaged individual (HDI) ownership status claimed by the two.
The judge ordered that Innovata and Viatris be excluded from the reconsideration of the bids, that the final bid prices of Barrs and Aurobindo be restored to their prenegotiation price, as they did not qualify for the local manufacturing preference set out in tender rules, and that the erroneous HDI points given to Innovata and Barrs be stripped from their scores.
On Innovata and Viatris, he said it was common cause that they did not have a valid licence for their Isando-based manufacturing site at the time of bid closure, reports GroundUp.
“A licence that has expired is not, and was not on bid closure date, a valid licence,” he said. This meant that they should not have progressed beyond the first stages of the adjudication process.
Cipla had also contended that Innovata’s past performance should have been taken into account. The company had been unable to perform under a previous contract, which it had asked the department to cancel.
The Bid Evaluation Committee (BEC) had treated this history as “materially relevant”. But the Bid Adjudication Committee, which makes a final recommendation for the awards based on the BEC’s recommendations, said there was no evidence Innovata had been prohibited or restricted from doing business with the state. It had directed that Innovata be considered, with reduced volumes, awarding it a 11.38% allocation.
Girdwood said: “Formal debarment is reserved for the most serious cases of established wrongdoing and is not a precondition for, nor a proxy for, an assessment of ordinary supply-performance risk.” He found this was a ground to review the tender.
The department was also ordered to conduct an investigation to determine whether Innovata and Barrs, both held by Avacare at the time of the bid, had prepared their submissions independently.
“The department is assessing the feasibility of the timeframes stipulated …taking into account the procurement processes and operational requirements involved… and will consider the appropriate steps to be taken following the conclusion of its legal consultations,” said the department’s spokesperson, Foster Mohale.
Cipla said it remained committed to working with the state, according to News24. “Our priority remains the patients who rely on consistent access to essential medicines. We recognise the important role of the Department of Health and remain committed to engaging constructively as it considers the judgment and the next steps,” Cipla Africa CEO Paul Miller said in a statement.
“Strong local manufacturing is central to a resilient healthcare system. Cipla’s longstanding ARV manufacturing capability in South Africa supports security of supply, develops local expertise and contributes to sustainable access to quality, affordable medicines. We welcome the judgment’s provision for continuity of supply while the reconsideration process is undertaken,” he said.
Industry association Pharmaceuticals Made in SA (Pharmisa) said the judgment vindicated many of the concerns it had previously raised about the department’s procurement processes, which included companies misrepresenting their broad-based BEE status and local manufacturing credentials.
GroundUp article – Cipla wins court fight over HIV pill tender (Creative Commons Licence)
News24 – Court strikes down R13bn HIV pill tender that shut out Cipla
See more from MedicalBrief archives:
Cipla and Health Department in legal showdown over ARV tender
HIV drugs roll-out under threat in court tender row