‘Nonsensical’ decisions by the government on medication procurement are hampering the economy and increasing South Africa’s trade deficit in pharmaceuticals, said Stavros Nicolaou, Aspen Pharma’s group senior executive, last week.
Speaking at the annual Black Business Council summit in Ekurhuleni, he said products like ARVsx could be produced locally to benefit the economy, and urged government departments to make decisions based on the impact on the economy instead of solely on price considerations.
South Africa has the world's highest HIV rate but imports most of its ARVs, which is counterintuitive, he added.
“It is insane. Every month we consume 5.5m packs of ARVs in the public sector. Our capacity is 3m packs a month, and we have capacity to install 2m. We import most of the products, on simple yet illogical pricing decisions.
“Instead of looking at what constitutes the best value for money, we say we are saving R1 a pack because we are importing from India, but we forget we are losing R3 a pack in terms of the multiplier impact back into the economy.
“It does not make sense. That is a terrible decision and unfortunately there are departments countrywide, not only in my sector but across the board, making these illogical procurement decisions.”
Because of poor procurement decisions, SA’s trade deficit in pharmaceuticals was growing year on year, to the extent that pharmaceuticals and medical devices were now the fifth biggest contributor to the current account deficit, reports TimesLIVE.
“The decision these departments take is that we will save R1 – so we will be heroes. But we will lose R20m of economic activity. It is nonsensical. Let us hold our government to account for poor procurement decisions. They deny you the opportunity to enter the space and many other sectors.”
He also called for guaranteed offtake opportunities for black entrepreneurs with longer terms.
“Let’s start giving our black entrepreneurs offtakes. It is no use saying we have a tender for two years, and a black industrialist comes in and wins it, but then loses it two and half years later and retrenches people. What is the sense of that? Other countries do not do that.”
TimesLIVE article – Government has made poor decisions on ARV procurement, says Aspen exec
See more from MedicalBrief archives:
Another blow to Aspen’s SA plant: WHO has no plans to buy its vaccines
How Africa can boost local health manufacturing, procurement
Procurement scandal is the ‘ugly face’ of Gauteng Health — Premier
Cipla to produce anti-HIV injection in Benoni, Durban