Government intervention should be applauded

THE rapid rise in the cost of medicine in recent times has been cause for concern for various roleplayers and the public in general.
Retired citizens, dependant on savings have seen the proportion they spend on medicine grow every year. It is estimated that since 2000, the rate of medical scheme contribution increases has consistently exceeded the CPI inflation rate by between two and four percentage points per annum. The country's biggest medical scheme recently said whereas the three-year average annualised inflation rate was 5.5%, medical inflation was 10.9%. According to recent findings by analysts Jenny Ramsden and Marlene Heymans, medical inflation has averaged more than 30% a year for the past five years.
Thus the recent announcement of the South African Government that they have embarked on a joint venture with a leading Swiss pharmaceutical company for the production of pharmaceutical ingredients for anti-retroviral medicines (ARVs) should be applauded.
As Trade and Industry Minister Rob Davies indicated previously, South Africa consume R25-billion worth of drugs every year, the majority of which are imported from the US and Europe. This massive outflow of capital is disastrous for the country in the long run.
It is hoped that this would eventually lead to a reduction in the costs of medicine in the country. The initial focus would be on HIV/Aids, tuberculosis and malaria, while noncommunicable diseases such as diabetes, hypertension and cancer would later be added.
Science and Technology Minister Naledi Pandor said this project would reduce South Africa's dependence on imported drugs and would provide security of supply of priority drugs, stable pricing with less sensitivity to exchange rates.
Davies said: "If South Africa were to continue to import ARVs at the current rate, in 2016, we would have to import 1430 tons of pharmaceutical ingredients at a cost of R4.7-billion at current exchange rates. The new facility was expected to manufacture 40% of this in its first phase, a possible second phase would increase this percentage,” Davies said, adding that the initiative was a big step forward in terms of South Africa's manufacturing capacity.
The new facility will be built at the Pelindaba site of NECSA/Pelchem in Gauteng and will be a massive boost to the local pharmaceutical industry, creating an estimated 2200 jobs in the process. These jobs will include direct and indirect jobs in both the formal and informal sector of the economy. An estimated 3800 jobs will be created during the construction phase.