Country Report: South Africa - Pharmaceutical Executive


Country Report: South Africa
Leading the Pharma Model

Pharmaceutical Executive


In the 1980s, South Africa was home to around 45 pharmaceutical manufacturing facilities. Today, only a handful remain. Should the government attempt to bring pharmaceutical manufacturing back into the country?

Erika Koppers, general manager of Roche South Africa
It's a question touching a number of South African industries. In an effort to create jobs, the government has put into place a number of policies to promote national manufacturing. In 2010, the Minister of Economic Development announced an overarching New Growth Plan (NGP) to create some 5 million jobs across all sectors combined over the next 10 years.

In this context, the government launched the Preferential Procurement Policy Framework Act (PPPFA), which sets high targets to favor domestic manufacturing. The legislation affects all industries, to the benefit of national manufacturers, including drug makers.

Dr. Motsoaledi says that when it comes to questions related to public health, economic factors should also be taken into account. "Health is a public good and health is a human right. That is the first and most important thing," he says.

John D Hallam, chairman of Abex ­Pharmaceutica
"In the Alma-Ata declaration of the World Health Organization, health is a fundamental human right. The attainment of the highest level of health is the most important worldwide social goal. Of course, we do not remove the economic sector from health. In order to realize health you need the economic and the social sector, in addition to the health sector, to come into action," Motsoaledi says.

Stavros Nicolaou, chairman of Pharmaceuticals Made in South Africa (PHARMISA), supports the policy and says that it's in the country's overall best interest. "The absolute national imperative for South Africa is the need to grow our economy at levels of around 7% of GDP. This is important in order to close the income disparity gap and create long-term political stability. Local manufacturing, with its multiple spin-offs such as an increased tax base, enhanced education, job creation, and improved service delivery are all closely interwoven to this national imperative. The case for boosting local manufacture is an extremely solid one," he says.

Laura Engelbrecht Joubert, general manager for Abbott South Africa
Richard de Chastelain, country division head of Bayer Healthcare South Africa, recognizes that South Africa public health priorities are not always aligned with corporate interests. "A country like South Africa, particularly in the area of health, arguably has more of a social responsibility to have competitive and fair prices, rather than to create large numbers of jobs. That is not to say that the two are mutually exclusive. However, the government, quite rightly, focuses on a limited healthcare spend to try to get the best price out of the market. Whether that is attractive to multinationals is a different story."

Some critics question whether the policy might be hindering another national priority: access to affordable medicines. Some believe that cheap medicines can best be secured through open competition. Paul Anley, managing director of Pharma Dynamics, is a strong proponent of global manufacturing and global supply and believes the policy will make it difficult for the country to compete with Indian manufactures.


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