Supplier contract delay for new HIV treatment

A new HIV treatment that is expected to save the government more than $900m (R12.73bn) over the next five years has been held up again, this time over delays in finalising the next three-year contract with suppliers.

The health department’s plan to switch HIV patients to a cheaper and more effective three-drug combination pill containing dolutegravir, lamivudine and tenofovir is a vital part of its strategy for increasing the number of state patients from 4.2m to more than 6m by 2020-21.

It originally hoped to begin rolling out the new regimen in September 2018, but hit its first stumbling block when concerns over the safety of dolutegravir led to delays in registering the drug with the SA Health Products Regulatory Authority.

It then pushed the implementation date to April, and expected the Treasury to announce by early December which drugmakers had won the supply contracts for all the Aids drugs it provides to state patients.

On Wednesday it emerged that most – but not all – of the tender has been awarded , but it will only kick in in early July.

In an unusual twist, the circular announcing the successful bidders, which was sent to pharmaceutical companies earlier this week, contains several omissions, including the prices and volumes awarded to local drugmakers Adcock Ingram and Aspen Pharmacare for the three-drug cocktail containing dolutegravir.

This drug is the most expensive item on the tender, because of the volumes planned.

The circular, which Business Day has seen, says 147m packs are to be purchased over the three-year tender period.

Six companies have already been awarded shares of this contract – Macleods, Mylan, Hetero, Cipla Medpro, Aurobindo and Sonke – worth a collective R9.4bn. Their prices range from R75.13 per monthly pack (Macleods) to R89.68 per pack (Sonke), and their share of the volume ranges from 11% (Aurobindo) to 14% (Macleods and Cipla Medpro).

This would leave Aspen and Adcock sharing the remaining 23%.

Contracts worth R13.66bn were awarded in the circular.

Other gaps in the tender include the volumes and prices for the suppliers of lamivudine, either as a stand-alone pill or in combination with zidovudine.

The Treasury had not responded to Business Day’s questions at the time of publication.

Adcock Ingram spokesperson Kavitha Kalicharan declined to comment on the outcome of the tender. “We still need to engage with [the] Treasury on finalisation of certain of Adcock Ingram’s allocations in order to understand the full extent of the award,” she said.

Aspen Pharmacare’s head of strategic trade Stavros Nicolaou said the company expected to get about an eighth of the tender for the dolutegravir cocktail.

“Although not of significant economic value, due to its low margins, ARVs [antiretrovirals] are important from a job creation point of view,” he said.

“Aspen is also pleased that the government has applied some local preference, as SA companies source active pharmaceutical ingredients [API] at higher prices from competitor Indian ARV producers. API makes up around 70% of ARV costings,” he said.

Francois Venter, deputy executive director of the Wits Reproductive Health and HIV Institute, said he hoped there would be no further delays in awarding the tender as dolutegravir is an exciting step forward in Aids treatment.

“It has significant resistance and side-effect benefits,” Venter said.