South Africa's ruling African National Congress (ANC) party has announced plans to establish a state-owned pharmaceutical company.
Revealing the proposals, which were drawn up at a four-day meeting of the ANC national executive committee, party secretary-general Gwede Mantashe told a media briefing that South Africa consumes 25% of all antiretrovirals in the world, 17% of global HIV infections are in the country and that the number of South Africans tested for HIV/AIDS had gone up from around 2 million in 2010 to 12 million this year. Therefore, he said, "there is a compelling case for us to start a state-owned pharmaceuticals company."
"Brazil's state company is opening a branch in Mozambique. Now the question we are asking is - why should we be a market for Brazil instead of being a market for ourselves?" he added.
Currently, government-supplied HIV/AIDS drugs are manufactured by local companies including Adcock Ingram and Aspen Pharmacare, and Mr Mantashe emphasised that the planned state-owned drugmaker would not pose a threat to these existing players - it would operate "within the industry," he said.
However, local reports quote industry officials as being concerned at the wisdom of committing state funds in this way when the government is already free to purchase HIV/AIDS treatments from a wide variety of suppliers without having to make any investment, and also for the implications for local companies if government procurement policies were to give preference to the state producer. "Most of the [local] companies are involved in the running of government tenders. If that were to change, everyone would be affected," said Abongile Makwabe, a spokesman for Adcock Ingram.
Plans for a state-run pharmaceutical manufacturer were originally agreed at the ANC's national conference in 2007, and the country's trade unions have campaigned strongly for its implementation ever since. Supporters say the move will cut public spending, reduce dependence on imports, slash prices and boost competition and access.
Mr Mantashe pointed out that the South African state mining company, which also started as an idea, is now running a coal mine and is set to open another shortly. The government is also now involved in the banking sector through the Post Bank, which is a division of the South African Post Office.
The plans now move to the Cabinet, which is scheduled to meet next week to discuss how the state drugmaker should be set up and establish a budget for the enterprise. The party national executive has also directed the Department of Health and the Treasury to establish a National Health Instance (NHI) seed grant before December to enable the initiative to go forward. Structures for the planned NHI scheme, which aims to provide healthcare for all South Africans, are scheduled to be in place by next March.
- Around 5.6 million people in South Africa are living with HIV (almost 10% of the population), a million of whom receive treatments supplied by the state.