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The Black Pharmaceutical Industry Association (BPIA) has added its voice to criticism of the health department’s procurement processes, saying black-owned companies are being hobbled by lack of government support.The BPIA is an advocacy group of more than two dozen black-owned firms, including manufacturers, wholesalers and pharmacies. Black-owned firms not only faced the general challenges encountered by local pharmaceutical manufacturers but also had the added challenge of needing to overcome the legacy of apartheid, said BPIA chairperson Kingsley Tloubatla.Black Pharmaceutical Industry Association chairperson Kingsley Tloubatla. (supplied) White-owned firms had benefited from direct support from the apartheid government, yet 30 years after the advent of democracy, black-owned firms remained locked out of South Africa’s R56.4bn pharmaceutical market, he said. Less than 1% of the domestic pharmaceutical market was held by black-owned firms, he said.Echoing many of the concerns raised in parliament last week by Pharmaceuticals Made in South Africa (Pharmisa), Tloubatla said more than 2,000 jobs had been lost in the pharmaceutical manufacturing sector in the past 18 months due to lack of government support. More than 40 pharmaceutical manufacturers had closed since 1994, he said.“We are discouraged from producing locally, not incentivised. The minister (of health) says we cannot produce cheaper than India. It is true because those companies operate from special economic zones with export incentives. All finished products are zero-rated, yet when I want to bring in a tableting machine, I’m charged import duty,” he said in an interview with Business Day.Tloubatla urged the government to support local players by introducing a list of restricted medicines that could not be imported, fast-tracking the registration of locally manufactured pharmaceutical products, and providing long-term supply contracts of 10-20 years instead of the three-year tenders it presently awarded. He also called on the health department to review its decision to permit only a 1.47% increase in the price of medicines sold in the private sector in 2026, since it was significantly below inflation. Pharmaceutical manufacturers faced additional cost pressures from the war in the Middle East, which has driven up oil prices. A report published by Unitaid in July estimated that manufacturing costs for Aids drugs could rise by 15% if oil reaches $120 per barrel. It is now trading just shy of $90.Tloubatla called on the health department to introduce explicit transformation quotas in its tenders, with a share of the contracts reserved for black-owned manufacturers.Last week Pharmisa chair Stavros Nicolaou told MPs on the portfolio committee on trade, industry & competition that the health department’s focus on price was excluding local players from contracts and jeopardising the government’s plans to reduce reliance on imports. It presented analysis showing the share by value of the tenders for Aids drugs, and for pills and capsules, awarded to local pharmaceutical manufacturers had steadily shrunk in recent years.The health department subsequently defended its position, telling Business Day that Pharmisa had presented a distorted picture that underplayed issues such as the cost of increasingly stringent regulatory requirements. It said it had a constitutional duty to procure affordable medicines from reliable sources and rejected Pharmisa’s analysis. Its own assessment indicated the share of the contracts for pills and tablets had seen an increasing share of the volume going to local manufacturers, it said.
