SA plans on spend­ing R24bn to buy ARVs for hos­pi­tals, says Min­is­ter Rob Davies

The Star Early Edition - - BUSINESS REPORT - Nom­pumelelo Mag­waza and Reuters

SOUTH Africa planned to spend $2.2 bil­lion (R24bn) over two years to buy HIV/Aids drugs for pub­lic hos­pi­tals, Trade and In­dus­try (dti) Min­is­ter Rob Davies said yes­ter­day.

Speak­ing at the Port El­iz­a­beth man­u­fac­tur­ing plant of drug­maker Aspen Phar­ma­care, Davies said the gov­ern­ment aimed to buy three quarters of the drugs from lo­cal man­u­fac­tur­ers. “We are on the cusp of an im­por­tant ten­der worth R24 bil­lion by the Depart­ment of Health that is for the pro­cure­ment of an­tiretro­vi­rals for 2015.”

Davies’s visit was in line with the gov­ern­ment’s fo­cus on bol­ster­ing growth in the phar­ma­ceu­ti­cal in­dus­try ac­cord­ing to its In­dus­trial Pol­icy Ac­tion Plan (Ipap).

The in­dus­try has been iden­ti­fied as a lever that was key to the coun­try’s growth and de­vel­op­ment ob­jec­tives. South Africa has re­served 70 per­cent of gov­ern­ment drug pur­chases for lo­cal man­u­fac­tur­ers.

Through the dti, the gov­ern­ment also aims to pro­mote lo­cal man­u­fac­tures through the Pref­er­en­tial Pro­cure­ment Pol­icy Frame­work. The ini­tial steps to­wards this frame­work in joint agree­ment be­tween the dti, health and trea­sury de­part­ments was for lo­cal man­u­fac­tur­ers to pro­duce tablets and cap­sules for the state.

Aspen has been one of the com­pa­nies to be awarded a ten­der to pro­duce an­tiretro­vi­rals (ARVs) for the Health Depart­ment. Its site has the ca­pac­ity of pro­duc­ing 12 bil­lion oral dosage forms an­nu­ally.

Davies said although much had been at­tained in Aspen’s man­u­fac­tur­ing site, even greater in­dus­trial ca­pac­ity could be un­locked be­tween it and the depart­ment.

“Our joint aim is to achieve fur­ther do­mes­tic in­vest­ment, a fo­cused ex­port support and ori­en­ta­tion and fur­ther job cre­ation,” he said.

The gov­ern­ment aims to buy three quarters of the drugs from lo­cal man­u­fac­tur­ers.

He added that phar­ma­ceu­ti­cals, to­gether with med­i­cal de­vices and di­ag­nos­tics, were the fifth-largest contributor to the cur­rent ac­count deficit that was so costly to the coun­try.

Davies said the gov­ern­ment’s pol­icy on in­tel­lec­tual prop­erty sought to strike a bal­ance be­tween the needs of pub­lic health and the in­ter­ests of in­no­va­tive phar­ma­ceu­ti­cal com­pa­nies.

“The aim of the in­tel­lec­tual prop­erty re­lat­ing to health pro­vi­sions is to bring South Africa’s laws in line with in­ter­na­tional agree­ments, in­clud­ing the World Trade Or­gan­i­sa­tion’s trade-re­lated as­pects of in­tel­lec­tual prop­erty rights, which has le­gal flex­i­bil­ity mea­sured that ef­fec­tively al­low coun­tries to have pol­icy space ac­cess to pub­lic health and ed­u­ca­tion.”

Davies said that generic medicine which came from in­no­va­tive medicine would also be al­lowed. “Ipap re­quires for phar­ma­ceu­ti­cal com­pa­nies to be in­cen­tivised if they invest in the coun­try, like the mo­tor man­u­fac­tur­ing in­dus­try has.”

Aspen’s group chief ex­ec­u­tive, Stephen Saad, said bil­lions of rand had been in­vested in capex en­hance­ments at its fa­cil­ity over the years. “Aspen has shown that glob­ally com­pet­i­tive man­u­fac­ture is pos­si­ble in South Africa if our strat­egy is sound and you are pre­pared to invest in tech­nol­ogy and skills.”

He added that the site re­mained key to the group’s world­wide business and was the lo­ca­tion of the most im­por­tant pro­duc­tion ca­pa­bil­i­ties.

“Aspen val­ues its re­la­tion­ship with the dti and wel­comes work­ing along­side it in or­der to fur­ther un­lock in­vest­ment, mar­ket ac­cess and ex­port op­por­tu­ni­ties in South Africa and across broader ge­ogra­phies.”


The Min­is­ter of Trade and In­dus­try, Rob Davies, left, and Aspen Group chief ex­ec­u­tive Stephen Saad dur­ing a visit to the company’s man­u­fac­tur­ing site in Port El­iz­a­beth yes­ter­day.

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