Government announces boost for local pharmaceutical sector
An interesting article from Espicom’s World Generic Markets business publication.
On 13th April 2012, South Africa’s Department of Trade and Industry and Department of Health jointly announced the designation of certain pharmaceutical products for domestic production. The government bodies commented that the designation was in line with the amended Regulations to the Preferential Procurement Policy Framework Act (PPPFA), which were promulgated in 2011 and make provision for designation by the Department of Trade and Industry of sectors, sub-sectors and industries identified in national economic development and industrial policies, for the procurement exclusively from domestic manufacturers.
The departments commented that South Africa has one of the worst disease burdens; consequently, it is important to ensure supply security and development of local capacity. The designation of the pharmaceutical products would thus benefit the country both in terms of health and economy. The designation includes the oral solid dosage tender worth over R2.5 billion (US$318.3 million) over two years. The potential list of more than 70 pharmaceutical products is being finalised.
The intention behind the announcement is to create security of demand for domestic production, attract foreign and domestic investment and to further industrialise South Africa’s economy. The Trade and Industry Minister, Dr Rob Davies, noted that the pharmaceutical sector is the fifth largest contributor to South Africa’s import burden, and commented that reversing this was an important challenge, whilst still ensuring that affordable healthcare is available to the public and private sectors.
According to Dr Davies, prices will be benchmarked internationally and local manufacturers will have to ensure that the benchmark is not exceeded to quality, thus ensuring that medicine prices remain affordable. The minister added that for security of supply purposes, the government would still continue to source some of its medicines from importers.
Commenting on the announcement, Adcock Ingram said that it welcomed the move. The firm commented that it took the view that a greater alignment between industrial policy and government procurement was critical for ensuring a sustainable pharmaceutical manufacturing base in South Africa. Adcock argued that the move would also have a significant effect on patient access to affordable medicines. In addition, as the local manufacturing base grows through increased capacity utilisation and the attainment of economies of scale, so South African manufacturers would be well placed for global competition and export potential.
Article source: Ian Platts. Editor of Espicom’s business publication World Generic Markets