See More

State boosts pharmaceutical manufacturing

Apr 13 2012 16:19 Sapa

Related Articles

Extensive chronic medications headache

Cabinet moots health product regulator

ANC mulls state drugs firm

Indian drug firms thrive in SA

Big Pharma helps tackle neglected diseases

Valeant Pharmaceuticals to buy iNova

Pretoria - The government has put measures in place aimed at reviving the waning pharmaceuticals production sector, Trade and Industry Minister Rob Davies said on Friday.

Addressing journalists in Pretoria, he said this included the issuing of a tender valued at R2.5bn for a two-year local procurement of oral pharmaceuticals.

"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 said.

"This tender will require that at least 70% of that procurement should come from local manufacturers. The remaining 30% is on an open tender but can go to local manufacturers as well," he said.

To guard against excess pricing for the products by manufacturers, Davies said a reference pricing model was being worked out in conjunction with the department of health.

"We have indicated that the designation process is not an opportunity for ransacking or ripping off the state... we will have to operate according to that reference pricing system," he said.

Davies said many jobs had been lost over the years due to a decline in production in the pharmaceuticals sector. By using imported products government had not been getting "good value for money".

He said importation of pharmaceuticals was one of the biggest contributors to the national trade deficit, which could be countered by stimulating local production.

"There is considerable ground we have lost; our export figures show quite a sharp drop over a period of about 15 or 20 years," he said.

"We have been importing large numbers of products which we previously manufactured. Also, we have not been exporting as we used to do," said Davies.

Health department director general Precious Matsoso said apart from losing capacity in pharmaceuticals production, vaccines production had also been dealt a blow over the years.

"We used to be one of the main vaccines suppliers, at least on the continent, and now we have lost out in the areas of diagnostics, pharmaceuticals and vaccines," she said.

The procurement would be part of government's "second wave" of the designation exercise in terms of the amended public procurement regulations.

The regulations - passed in terms of the Preferential Procurement Policy Framework Act - allow the trade and industry department to designate certain sectors and products for local procurement by local municipalities and government departments.

The policy is aimed at stimulating local manufacturing.

The "first wave" of designations which became effective from December 2011 covered power pylons, rolling stock, buses, canned vegetables, clothing, textiles, footwear and leather products and set-top-boxes (which will be used to convert digital broadcast signals for viewing on analogue TV sets).

Davies said the oral pharmaceuticals covered by the recent designation was the second-largest acquisition by the public health sector after anti-retroviral drugs.



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

Extravagant toys for the rich

What do you get for the person who has everything? Buy them something completely over the top.


Luxury living

The Fast and Furious R40 million
This is the most expensive burger in the world!
Exclusive food items that WILL break the bank
Top 10 most expensive homes in the world

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

How will you manage Vodacom’s price hike for contracts?

Previous results · Suggest a vote