Government-driven initiative the Ketlaphela project, which is aimed at establishing a fully backward inte- grated pharmaceuticals company that bridges the gap between research and development capabilities in South Africa, is in the process of its third attempt at being implemented.

It will add chemical manufacturing – active pharmaceutical ingredients (APIs) – and tablet formulation and will target the burden of diseases in South Africa. It will initially be focused on South Africa but will be expanded into the South African Development Community region and Southern Africa.

The first attempt at implementing Ketlaphela through a partnership between chemicals company Lonza – a Swiss company – the Industrial Development Corporation and fluorochemicals producer Pelchem was terminated when Lonza withdrew from the project.

The second attempt was based on a similar business plan, with an open call for proposals to attempt to find a replacement for Lonza. This was also unsuccessful when the sole bidder did not meet the minimum qualifying criteria.

Ketlaphela’s third attempt plans to adopt a more pragmatic approach. The first goal is to introduce locally produced Ketlaphela-branded antiretroviral (ARV) tablets/capsules into the national healthcare system through a collaboration with local ARV producers. The second goal, which will be simultaneously pursued, is to establish a small-scale manufacturing plant for APIs for selected niche products, including new ARV APIs.

The business rationale is to tap into the existing supply contacts between the Department of Health (DoH) and ARV suppliers to “produce” and supply Ketlaphela-branded ARV tablets to the DoH.

The supply chain will rely on a principal agreement – a letter of intent – between the DoH and Ketlaphela on a long-term ARV supply agreement. This is essential to incentivise ARV suppliers to collaborate with Ketlaphela based on securing improved pricing in their respective supply chains and optimising production costs. Supply agreements between Ketlaphela and ARV suppliers are based on the outcome of a request for proposals (RFP) process.

The Department of Science and Technology will provide financial support to enable Ketlaphela to attempt to locally manufacture an essential ARV tenofovir in the first-line treatment of HIV/Aids.

A RFP is being drafted for existing ARV suppliers to allocate a percentage of their current supply volumes to Ketlaphela in exchange for a longer-term supply contract with Ketlaphela. The bid item will price for each tablet or pack payable to Ketlaphela and the number of tablets to be allocated. The formulation and Ketlaphela branding will continue to be done by that supplier.

The rationale is that the supplier can use the longer-term agreement with Ketlaphela to secure better API pricing and will enable suppliers to plan their production lines and resources in a more efficient manner.

This should translate into a more secure supply agreement between the supplier and Ketlaphela, translating into improved security of supply for the DoH.