The Health Department’s growing dependence on medicines from outside South Africa is jeopardising local jobs and the country’s security of supply, say pharmaceutical companies – as the department disputes allegations that local manufacturing is not being considered in public procurement.
Business Day reports that over the past 10 years, importers have gained a growing share of two of the department’s biggest tenders at the expense of local drug makers, according to analysis by Pharmaceuticals Made in SA (Pharmisa), which shows that in 2008, local companies won more than 70% of the huge Aids drug tender by value, but in 2025, just 24%, while their share by volume plunged over the period from more than 90% to just 22%.
“Public procurement of pharmaceuticals is actually favouring and growing imports, flying against the policy of localisation” said Pharmisa Chairperson Stavros Nicolaou.
Public sector contracts account for about 70% of the pharmaceutical products purchased in South Africa, according to Pharmisa. The health department’s Aids drug tender is the biggest by value (R15.5bn), followed by vaccines (R8bn) and the solid dose tender (R7bn) for pills and capsules.
The latest Aids drug tender saw several local firms that had previously supplied the state shut out completely.
Nicolau said the sharp drop in the number of items supplied to the state by local drug manufacturers potentially means the loss of crucial technology. The trend is most acute in the solid dose tender, which saw local pharmaceutical manufacturers win contracts to supply just 42 products in 2026, compared with 152 products in 2014.
Pharmisa expressed particular concern about the health department’s adoption of a score for historically disadvantaged individuals (HDI) in the preference points it allocates to bidders, as it has unintentionally excluded JSE-listed companies, Nicolau said.
He pointed out that listed companies make outsized contributions to the fiscus through corporate tax, VAT and levies, employ thousands of people, and offer superior supply chain resilience due to their scale. Yet the solid dose tender did not allocate preference points to any listed companies or to any other local manufacturers.
Department spokesman Foster Mohale said that government “continues to pursue a range of measures aimed at strengthening local manufacturing capability while balancing the need to maximise value for money and maintain sustainable access to essential medicines within a constrained fiscal environment”.
While acknowledging the important role of local pharmaceutical manufacturers in supporting medicine security and contributing to South Africa’s industrial development objectives, he said the department’s primary responsibility was “to ensure patients have uninterrupted access to safe, effective, quality-assured and affordable medicines”.
He added that the department will no longer HDI scores to allocate preference points and will in the future use broad-based BEE scores.
Business Day article – Drugmakers warn imports are squeezing out local suppliers (Restricted access)
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