Domestic drugs manufacturing could benefit from increased local demand

9th March 2018 By: Donna Slater - Creamer Media Staff Writer and Photographer

The South Africa pharmaceuticals manufacturing industry is “well positioned” to assist in contributing to the economy with an increase in local manufacturing, which needs to be driven by a decrease in importing drugs and a consequent increase in local manufacturing, says local procurement lobby group Proudly South African (SA).

Presenting its case for improvement in domestic manufacturing capacity, Proudly SA invited pharmaceuticals sector key roleplayers to a forum on February 20, which was held in Rosebank, Johannesburg.

Despite a strong tradition of local production, Proudly SA notes that the pharmaceuticals sector is facing increasing pressure from a number of external sources that threaten its capacity to sustain existing jobs and create new ones.

However, the group says that domestic pharmaceuticals companies are in an ideal position to correct the imbalance between local manufacturing and the importing of drugs by making a significant contribution back into the South African economy. This must be prioritised by the procurement of locally manufactured drugs by both the private and the public health sectors.

Proudly SA states that the combined market comprising the private and public sectors is worth about R49-billion.

However, it also highlights that a significant proportion of that amount comprises imported drugs and the sector is suffering from a trade deficit of about R16-billion. “Of the R49-billion, the private sector accounts for the lion’s share of procurement, with pharmacy chains and the like buying up about R41-billion,” the group says.

Proudly SA CEO Eustace Mashimbye says the forum organised by the group is the first in a series that is aimed at finding ways to address the issues facing other sectors, such as poultry and textiles, in the coming weeks. “These other forums will seek to find ways to encourage the private sector to increase its percentage of local procurement in pharmaceuticals and, in doing so, create additional jobs within the manufacturing supply chain.”

He adds that Proudly SA is also looking at ways to encourage investment in South Africa by those manufacturers that currently import products, as well as drug companies working in the research and development sector. “We also look at how the establishment of the long-awaited National Health Insurance can assist the pharmaceuticals sector, as well as government incentives in favour of local procurement.”