S African Drug Law Backed By Local Firms

Not only are South African drug firms Adcock Ingram and South Africandruggists "unconcerned" at the controversial Medicines and Related Substances Control Amendment Bill (Marketletters passim), they believe it will improve their business. Most of their sales are in over-the-counter and generics.

Adcock Ingram says that its strength in hospital products and OTCs makes it less susceptible to the new law, while SAD's chairman, Peter Benningfield, said the impact would be less for his group than for others. With ethical drugs likely to be under threat, SAD would benefit from a swing to generics, he said. SAD estimates that only 17% of the 2.7 billion rand ($80 million) prescribed annually by private doctors in South Africa are generics, compared with 60% in the UK. Mr Benningfield said that SAD's average cost per dose (one tablet, capsule or 5ml of liquid) was 25 cents, against an industry average of 44 cents. He believes that Glaxo Wellcome, Novartis and Roche, the leading multinationals in South Africa, have seen their share of the private-sector market decline.

However, local reports quote analysts as querying how Adcock, for example, can expand in a market in which there are no major acquisitions. SAD is also seeking to expand and already has UK and Italian interests. Both firms may have to look abroad to ensure their future, analysts feel.