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South Africa urged to dedicate 30% of healthcare public procurement to local manufacturers

13th February 2024

By: Schalk Burger

Creamer Media Senior Deputy Editor


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To build capacity and expand investment in South Africa’s pharmaceutical and healthcare products manufacturing sector, the country should ringfence 30% of public procurement for local manufacturers, and allocate 1% of gross domestic product to research, intellectual property development and innovation, says health security and medicine supply consultancy MMH Africa co-founder and CEO Michael Mynhardt.

“South Africa should take a pan-African approach and view the expansion of its healthcare manufacturing industry as a critical undertaking to address concerns regarding the risks affecting Africa’s health security and medicine supply owing to the continent’s dependency on foreign imports from the Global North,” he recommends.

Investing locally in healthcare facilities with the capacity to manufacture the drug substances and active pharmaceutical ingredients (APIs) associated with antiretroviral (ARV) and pre-exposure prophylaxis (PrEP) treatments will be a significant undertaking that will help South Africa meet United Nations HIV/Aids Programme targets, while making medication more affordable and improving the security of supply in emerging markets across the continent, he says.

Further, the country should build and support the efforts of five API manufacturers in South Africa by 2030 because, with access to APIs, the country can vertically integrate into the value chain of local manufacturing.

This will improve the sustainability of the industry over the long term, while simultaneously creating jobs for a highly skilled workforce, he says.

“To date, local manufacturers have remained at a competitive disadvantage when it comes to APIs, owing to a number of different market forces that have included poor and inefficient production value chains, the high cost of production of medicines and vaccines, as well as poor financing and financing models,” Mynhardt notes.

South Africa should also move to secure the African continent’s capacity, to locally manufacture 60% of the vaccines it requires for its growing population base by 2040. This initiative is currently being led, in part, by the Partnerships for African Vaccine Manufacturing Framework for Action (PAVM).

With South Africa's continued support, the PAVM could meet its ambitious goal of ensuring that 60% of Africa’s vaccine demand is supplied by Africa’s own vaccine-manufacturing industry by 2040, Mynhardt says.

The Afrigen messenger ribonucleic acid (mRNA) vaccine technology hub in Cape Town offers a blueprint towards making this possible in South Africa, he notes.

“If we continue to develop the technology to manufacture biologics locally and mRNA-based products on our continent, South Africa can position itself at the forefront of the development of a bio-pharmaceutical manufacturing framework for improved medicine supply across Africa,” Mynhardt says.

Meanwhile, the country must ensure that 30% of all public procurement is allocated to local manufacturers with the capacity to produce all healthcare products, including medical devices, consumables, pharmaceuticals, vaccines, injectables and biologics.

“This remains critical to improving investor confidence in the sector while offering a direct pathway to import substitution,” he states.

Additionally, in the upcoming Budget, South Africa should allocate 1% of gross domestic product towards research, intellectual property development, product discovery and innovation for the healthcare sector.

“The departments of Health and Science and Innovation must offer their unconditional support and assistance to South African scientists with the resources they require to develop their own intellectual property rights for APIs and drug substances in our country.

“Only then will we be able to build an end-to-end manufacturing framework that works on the continent. Currently, the industry is based on fill and finish operations alone. This is not strategic or economically sustainable over the long-term, and poses a severe risk to our country’s medicine supply and security,” Mynhardt emphasises.

Further, the country should secure the South African Health Products Regulatory Authority's status as a World Health Organisation-listed authority, under a new, globally recognised regulatory standard that will provide local pharmaceutical manufacturers in South Africa with the regulatory means to improve and expedite their access to the donor-funded market, he adds.

“A mature regulatory body provides a platform for efficient research, complements business development and prevents the distribution of counterfeit medication in our country,” he says.

“We must decrease our reliance on foreign healthcare imports and develop a sustainable pharmaceutical manufacturing framework that will remain dedicated to securing Africa’s supply of life-saving medicine over the long term. MMH & Partners Africa looks forward to discussing its six-point plan with all relevant government stakeholders in 2024,” Mynhardt says.

Its six-point plan stems from a policy position paper prepared for the Presidency and the Department of Health following a request for industry insights from the Department of Health director-general in November 2023.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online




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