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South Africa will only buy certain drugs if produced locally

By Natalie Morrison, 19-Apr-2012

Related topics: Excipients, raw materials and intermediates, Tabletting, coating & ancillary equipment, Regulatory & Safety

South Africa aims to boost its pharmaceutical production sector by developing a 70-strong list of oral solid dose drugs that it will only buy from local manufacturers.

The move is part of the Government's recent drive to bolster its drug manufacturing industry by producing the main bulk of medicines it uses in the country.

Sidwell Medupe, the Department of Trade and Industry’s (DTI) chief director media liaison told in-PharmaTechnologist that oral solid dose is just the starting point for the new preferential procurement regulations.

“The first government tender to apply this regulation is the oral solid dosage tender, worth R2,5bn ($313m) over two years,” he said, adding: “The industry believes the designation is the first major step and that more will follow.”

Speaking to reporters in Pretoria, South Africa, Trade and Industry Minister Rob Davies said the Government is not trying to oust foreign manufacturers, but is simply trying to give up-and-coming local firms a fighting chance.

“This is not an opportunity for ransacking, it is an opportunity for local manufacturers to put a toe in the door and to be pressured to become competitive,”  he told fin24.

In a statement, he also said: “The intention is to create security of demand for domestic production, attract foreign and domestic investment and to further industrialise the economy.”

However, despite insisting importation is not completely discouraged, Davies did say the remaining 30 per cent of drugs which could technically be procured from other countries could still come from local manufacturers. “The remaining 30 per cent is on an open tender but can go to local manufacturers as well,” he said.

Pre-empting criticism about the possibility of cost increases Davies added that those firms vying for a tender must meet international pricing standards to ensure drugs remain affordable.

“Prices will be benchmarked internationally and local manufacturers will have to ensure that the benchmark is not exceeded to qualify, thereby ensuring that medicine prices remain affordable,” he commented.

Rolling out the welcome mat

Medupe told us that although manufacturing activities are low in the country, and importation of meds high, there is enough oral solid dose infrastructure in place to implement plans immediately.

He said: “The plan is to implement this immediately and the existing capacity of manufacturing plants has been investigated for certain products.

“Currently 15 companies manufacture oral solid dose medications inSouth Africa. These include Adcock Ingram, Aspen Pharmacare, Specpharm, Sanofi and Fresenius Kabi.”

However he was keen to stress that the new plans are in place to boost South Africa’s manufacturing sector beyond its current limits, and that the Government welcomes new investments, especially from the likes of international Big Pharmas.

He said: “The designation provides greater certainty of demand, so pharmaceutical companies are more likely to invest in South Africa.”

Medupe added that numerous multinationals have already begun plans for local plants.

Precious Matsoso, South African Director General of Health, also urged more international companies to follow the likes of Sanofi and Lonza – who have announced plans to set manufacturing facilities in the area – to keep costs competitive and production at its peak.

"The Sanofi plant, that's the kind of thing we would support," he said.

Stabilising the supply chain

With plans for such a sizeable piece of the drug production pie carried out locally, in-PharmaTechnologist questioned whether contingency plans for supply chain disruption are in place.

And it seems back-up depends largely on authorities buying from foreign countries.

Medupe replied: “The remaining 30 per cent of the volume is available in an open tender to both the South African domestic manufacturers and importers.”

In a statement Davies – who was unavailable for comment – said that for "supply chain security" the Government still plans to source "some" of its medicines externally.