South Africa makes pharma a ‘designated’ industry
pharmafile | April 16, 2012 | News story | Manufacturing and Production |Â Â DTI, Rob Davies, South AfricaÂ
The government of South Africa has said it will only buy certain pharmaceutical products that are manufactured in domestic facilities, as part of a new programme intended to reduce the country’s reliance on imported medicines.
The announcement, made on Friday by Trade and Industry minister Dr Rob Davies, marks the first extension of South Africa’s Preferential Procurement Regulations, which were introduced last year, into the pharmaceutical sector.
The process – known as designation – will lead to a short list of around 70 pharmaceutical products which will only be procured by the government if they are made within South Africa. The first medicines to be included in the scheme are all oral solid dosage forms.
While the list of drugs is still being finalised, the DTI estimates that the tender will be worth around 2.5 billion rand ($313m) over two years. Companies bidding for the tenders will have to meet international pricing benchmarks to ensure that the medicines remain affordable.
South Africa has one of the worst disease burdens and consequently it is important to ensure supply security and development of local capacity, said the DTI in a statement.
“The intention is to create security of demand for domestic production, attract foreign and domestic investment and to further industrialise the economy,” said Davies.
“This will create an opportunity to enhance local manufacturing capacity to create decent jobs, add value and build export platforms.”
The move was warmly welcomed by South Africa’s largest domestic drugmaker – Aspen Pharmacare – which told the national Business Daily newspaper that it would help local companies compete with medicine importers, such as companies based in India, which benefit from tax breaks.
Davies noted that the pharmaceuticals sector is the fifth largest contributor to South Africa’s import burden, adding: “it is an important challenge to reverse this, whilst still ensuring that affordable healthcare is available to the private and public sector”.
Phil Taylor
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