Country Report: South Africa - Pharmaceutical Executive

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Country Report: South Africa
Leading the Pharma Model

Pharmaceutical Executive


Sanofi Pasteur, the vaccine market leader in South Africa, contributes to the consortium. John Fagan, Sanofi's general manager of South Africa, says, "This partnership, which is fairly unique in our group, provides vaccines for the national pediatric immunization program as well as for the broader public health needs of the country, such as outbreak and mass immunization campaigns and seasonal and pandemic flu responses."


Litha: Expanding its Pharmaceutical Portfolio
From increasing the number of hospital beds to improving the availability of vaccines, the government is working with the private sector in response to a wide range of public health challenges. Another PPP example can be seen in the effort to produce active pharmaceutical ingredients (API) nationally.

With the largest population of people living with HIV in the world (5.6 million), South Africa carries 17% of the global burden of the disease. The HIV/AIDS epidemic remains the biggest threat to public health in South Africa. While there has been a significant improvement in affordable access to antiretroviral (ARV) treatment in recent years, especially thanks to local generic manufacturers such as Aspen, more progress needs to be made.


Paul Anley, managing director of Pharma Dynamics
Not manufactured in South Africa, APIs are subject to unstable pricing with sensitivity to exchange rates. Stephen Saad, co-founder and chief group executive of Aspen, says, "The parts that are not local currency denominated tend to be the chemicals, APIs, and those do have Rand fluctuations. The most expensive chemicals are in ARVs."

In response, South Africa will set up a PPP in order to manufacturer APIs at home. Health Minister Dr. Aaron Motsoaledi explains the strategy. "Today, Active Pharmaceutical Ingredients (APIs) are not manufactured in South Africa, so if we have such a high consumption rate, why can we not establish our own API manufacturing unit here? We want to secure the production internally, because we are the ones who are in need."

The government will invest R1.6 billion (about $204 million) in a plant to manufacture the APIs used in ARVs in a joint venture with the Swiss group Lonza. The project, named Ketlaphela, is to receive funding from the Swiss pharmaceutical company Lonza, the Ministry of Health, and the Ministry of Industrial Development Cooperation. The 50% state-owned facility should create 2,200 direct and indirect jobs and is to be located at the Pelchem's Pelindaba site, near Pretoria. Construction is expected to start in early 2013.


Stavros Nicolaou, chairman of Pharmisa
According to the Ministry of Industry and Trade data, if South Africa were to continue to import ARVs at the current rate, in 2016, the country would have to import 1,430 tons of APIs at a cost of R4.7 billion (about $500 million) at current exchange rates. The new facility could manufacture 40% of this in its first phase, with an increase in a possible second phase.


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Source: Pharmaceutical Executive,
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