Health department caught in a lie? MPs tear ARVs tender worth R15.5 bn apart

Health Minister Aaron Motsoaledi. Picture: Nigel Sibanda Health Minister Aaron Motsoaledi and a large group of senior officials appeared before the parliament’s portfolio committee on health, where they were questioned about the process used to award the antiretroviral (ARV) tender, worth at least R15.5 billion. This follows after two pharmaceutical companies, which are part of the group that is appointed to supply the medication used to treat HIV, entered business rescue.

This raised eyebrows about whether due diligence was applied when awarding the tender. The committee was told by the health department that at least 70% of its ARVs are procured from local manufacturers. However, the committee questions this, as it estimated that 70% of ARVs are imported, while only 30% are produced domestically.

“This assessment is based on several factors, including referencing Tenofovir Dolutegravir and Lamivudine (TDL), which accounts for 80% of the contract value,” said the committee in astatement. “For the 84s pack size, members noted that Emcure (India) won 15% of the tender, but trade data from Indian customs indicates that Emcure imports its ARVs into South Africa. “In the last three-year contract, which ended two months ago, Emcure imported $43 million (R1.6 billion) worth of ARVs, yet the department lists Emcure as local.” The committee found that the department lists Innovata, Barrs, Aurobindo and Viatris as local manufacturers, despite evidence that they are importing ARVs into the country.

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Another issue the committee found is that Barrs, one of the companies that went into business rescue, has been acquired by Hetero, which will also import ARV products. Motsoaledi and his entourage were asked how they arrived at the minimum of 70% local procurement, given that import data for the mentioned suppliers indicates otherwise. The committee has since requested documentation from the department to confirm that the aforementioned companies produce ARVs locally. “Additionally, members inquired why local producers like Sunpharma, Cipla and Adcock Ingram were excluded in favour of importers, and why the department did not maximise the capacities of both Aspen and Cipla, which could provide three million monthly patient treatments when both companies are competitive,” read the statement.

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