Aspen eyes R24bn tender share

ASPEN Pharmacare is aiming to be awarded half of the R24-billion contract to supply antiretrovirals in South Africa. The tender will be awarded next year.

Trade and Industry Minister Rob Davies said the government would like to award at least 70% of the tender to local manufacturers, depending on security of supply and affordability.

Davies visited Aspen Pharmacare in Port Elizabeth yesterday and said the tour formed part of the department's engagement with stakeholders to assist pharmaceutical manufacturing in South Africa.

"Now we are on the cusp of a very, very important tender worth R24-billion by the Department of Health ... for the procurement of antiretrovirals (ARVs) from 2015.

"That ARV tender has an indicative target of 70% local procurement and I think one of the pieces of work my department had to do was to work with industry to ensure we transfer that into real, binding targets which are meaningful and which support industrial development."

Davies said that since the introduction of ARVs in South Africa, life expectancy had been raised by four years.

He said foreign companies wanting to tender would need to invest and manufacture in the country to adhere to the localisation criteria. There was no localisation specification in the previous ARV tenders.

Aspen Pharmacare group chief executive Stephen Saad said the company was already producing almost half of South Africa's one-a-day ARV tablets, while 55% was imported from Asian firms.

He said he would not apply for more than 50% of the tender, as it would be best for the department to have more than one supplier to ensure security of supply.

Aspen, a global leader in generic ARV production, made history in 2003 when it launched Aspen- Stavudine – the first generic ARV drug developed and manufactured in Africa.

Saad said one of the biggest challenges of the past year was the erratic off-takes of ARV drugs, with the cost to the company staying the same and affecting group profit flow and operations.

The government awarded Aspen the lion's share of its first ARV tender, equating to 58% by volume, and more than 70% by volume of the second ARV tender.

Only 20% of the company's revenue is made up of products sold in South Africa, with most of the products being exported to 150 countries, including Australia and America.

Davies said his department was working on the possibility of announcing a pharmaceutical special economic zone (SEZ) early next year.

Saad confirmed that the company was talking to the ministry to see if the broad incorporation of the SEZ incentives could benefit Aspen. - Cindy Preller