The minister of trade and industry Rob Davies announced at the weekend the designation of more than 70 pharmaceutical products under the preferential procurement framework in a move designed to create security of demand for domestic production in the sector.
The announcement made for the ‘second wave’ of designations under the amended regulations to the Preferential Procurement Policy Framework Act (PPPFA).
The amended PPPFA regulations were promulgated last year and make provision for designation by the department of trade and industry of industries identified in national economic development and industrial policies, for the procurement exclusively from domestic manufacturers.
Davies said South Africa has one of the worst disease burdens and consequently it is important to ensure supply security and development of local capacity. “The designation of the pharmaceutical products will benefit the country both in terms of health and economy”.
The designation already includes the oral solid dosage tender worth R2.5 billion over 2 years. The potential list of more than 70 pharmaceutical products is being finalised.
“The intention is to, 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.”
Davies added that the pharmaceuticals sector is the fifth largest contributor to South Africa’s import burden and that it is an important challenge to reverse this, whilst still ensuring that affordable healthcare is available to the private and public sector.
According to Davies, 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 further said that for security of supply purposes, government would still continue to source some of its medicines from importers.