South African state drug tender system under fire

Generic drug maker Aspen Pharmacare, the biggest beneficiary of the South African government's multibillion-rand AIDS drug tender, says the system is not working and pharmaceutical companies should partner directly with the state instead, reports the Business Day newspaper.

Under the terms of the two-year contract, worth 4.2 billion rand ($558.5 million) when it was announced last June, pharmaceutical companies were given no volume guarantees, yet had to make significant investments in production capacity, said Aspen senior executive Stavros Nicolaou. Aspen had been disappointed by the volumes ordered by the state, he said. The government had tendered for 3.6-million packs of tenofovir, yet 18 months into the deal it had only bought 180,000 packs, he said.

Although the state was providing AIDS drugs to an estimated 670,000 patients by August, very few of them were using tenofovir, as current treatment guidelines reserve this drug for people who have experienced serious side-effects with the much cheaper stavudine.

The actual value of the tender realised to date was about 60% of the value when it was floated, Mr Nicolaou said. "Forecasting with such uncertainty is very difficult. You are far better off doing public private partnerships, which will give predictability of patient numbers," Mr Nicolaou told delegates to a seminar hosted by Metropolitan Health Group and Qualsa medical scheme. A public-private partnership for the provision of AIDS drugs would see the state enter into a long-term contract with drug makers with guarantees of patient numbers, Mr Nicolaou said.

The SA Department of Health expected that it would have to provide treatment to between 1.6-million and 2.5-million HIV patients in the next three to five years, he said. "I don't believe a tender is the most competitive, nor the most sustainable, way to get antiretroviral medicines," he said, according to Business Day. Public-private partnerships should also be considered for pharmaceutical supply chain management, he added.