Local procurement to boost South African drug industry

25 April 2012

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25 April 2012 | Adam Leach

Manufacturers of certain pharmaceuticals are to be given preferential treatment over foreign producers under procurement plans announced by the South African government.

The government is close to finalising a list of about 70 pharmaceutical products that will be designated for domestic production. The plans, which have been developed by the Department of Trade and Industry (DTI) and Department of Health, are in line with the Preferential Procurement Policy Framework Act, which aims to use public sector spending to strengthen domestic industry.

Trade and Industry Minister Rob Davies said in a statement: “The intention is to create security of demand for domestic production, attract foreign and domestic investment and to further industrialise the economy. This will create an opportunity to enhance local manufacturing capacity to create decent jobs, add value and build export platforms.”

The DTI explained the prices provided by potential suppliers would be benchmarked against international prices, with quotes exceeding the benchmarks being rejected. To ensure ample supplies, the government will still continue to import some of its medicines.

The department added pharmaceutical imports are the fifth-largest contributor to the import burden in the country. The use of public sector procurement in this way is intended to help reverse the situation.

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