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 Tuesday 11 March 2008
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SOUTH AFRICA: Question marks over ARV tender

Photo: Juda Ngwenya/PlusNews
South Africa's new ARV tender represents big business for pharmaceutical companies
JOHANNESBURG, 29 February 2008 (PlusNews) - The South African health department has called on drug manufacturers to submit bids to supply the government's antiretroviral (ARV) treatment programme, just days before the current ARV tender is due to expire. AIDS experts and activists said decisions on which drugs to include were made with little consultation.

"The tender specifications were simply released - many of the recommendations made were either ignored or shot down. There has been a severe lack of transparency or participation," said Jonathan Berger, a senior researcher at the AIDS Law Project (ALP), which submitted recommendations for the 2008 tender in September 2007.

"Had there been more openness, there was certainly the expertise available to help the tender look much stronger than it does," he said at a presentation to the Southern African HIV Clinicians Society in Johannesburg on Thursday.

The Joint Civil Society Monitoring Forum (JCSMF), a body made up of health, human rights and law organisations, which monitors implementation of the government's National Strategic Plan for HIV and AIDS, has also complained that recommendations it submitted to the government in January were ignored.

"We are concerned that there are serious shortcomings with the tender process and the specifications," wrote the JCSMF in a letter sent to the government on Thursday. "Issuing [the tender] is also premature, given that national treatment guidelines are in the process of being revised."

The ARV tender represents big business for pharmaceutical firms: South Africa has the highest number of HIV infections in the world, and ambitious targets to more than double the roughly 400,000 patients already receiving ARVs from the public sector in the next few years.

It calls for bids on 10 drugs, and for the first time includes tenofovir, recently registered in South Africa, which will provide an important alternative to patients at high risk of lactic acidosis, a potentially severe side effect of the first-line drug, stavudine.

''Had there been more openness, there was certainly the expertise available to help the tender look much stronger than it does.''
The government called for bids for the previous tender in February 2004, just prior to launching the ARV programme in April 2004, but only awarded tenders over a year later. Provincial procurement mechanisms had to be put in place in the interim.

The 2004 tender ran for three years and locked the government into paying the same prices for drugs for the duration. As new generic versions of ARV drugs came onto the market and prices dropped, by the end of 2007 the government was paying almost twice as much as the private sector for first-line drugs like nevirapine.

In its September 2007 recommendations, the ALP suggested that the new tender last only 18 months, to allow the country to take advantage of possible price reductions and the possibility of new, more effective medicines becoming available. Instead, the tender will run for two years, starting from June 2008, and will not allow for the procurement of new, better or cheaper drugs that may come onto the market in the meantime.

The 2004 tender allowed companies to bid, providing they had applied to register their drug with the Medicines Control Council (MCC), South Africa regulatory authority; the new tender excludes companies from bidding to supply drugs that have not completed MCC registration by 20 March, the date when submissions are due.

Long delays in registering new drugs at the MCC have prompted calls by the JCSMF for the government to waive the process for drugs already registered by stringent regulatory bodies such as the US Food and Drug Administration and the World Health Organisation. The ALP's Berger feared that the tender's strict registration requirement would result in many drugs still awaiting registration not making the cut.

Stavros Nicolaou, a senior executive with local generic drug manufacturer, Aspen Pharmacare, told IRIN/PlusNews his company was comfortable with the registration requirements and would be bidding to supply eight of the drugs, but had hoped for a heavier weighting towards local manufacturers in the tender's preference point system.

Companies will receive preference points for local manufacturing capacity and black ownership, but the largest number of points will be awarded for pricing. Aspen obtained just over half of the last tender, with one local and five multinational importers making up the remainder. A second local generic manufacturer, Adcock Ingram, has since entered the field and is likely to compete with Aspen in bidding.

Those pushing for greater ARV access argue that competition between generic drug manufacturers offers the best hope of further driving down ARV prices, but according to Berger, South Africa's patent laws do not favour such competition.

Brazil and Thailand have taken advantage of exemptions in international intellectual property law that allow developing countries to license generic manufacturers to produce essential drugs, regardless of patent restrictions, but South Africa's Patent Act favours patent protection.

The ALP has fought patent restrictions on ARVs by using South Africa's constitution to file complaints against pharmaceutical companies with the Complaints Commission. This approach has achieved a number of successes, with several of the companies agreeing to issue voluntary licenses to generic manufacturers, but Berger argued that it was slow and unsustainable.

"That's why it's so important that we have a Patents Act that's more friendly towards generic companies," he said. "We need a health department that's prepared to do what the governments of Thailand and Brazil have done. We just can't keep doing it one by one."

The 2008 tender includes estimates of the numbers of patients who will be taking each of the 10 ARV drugs over the next two years, for example, a projected 507,000 patients will be taking Lamivudine (also known as 3TC), a component of all first-line ARV regimens.

However, Andy Gray, a pharmacist at the Centre for the AIDS Programme of Research in South Africa (CAPRISA), at the University of KwaZulu-Natal, said this figure suggested that fewer new patients would be initiating treatment in the next two years than expected.

South Africa's National Strategic Plan for HIV and AIDS set a target of providing ARV treatment to 80 percent of those in need of it by 2011, a figure that translates into about 1.3 million people.

The health department did not respond to questions from IRIN/PlusNews about the tender.


Theme(s): (IRIN) Care/Treatment - PlusNews, (IRIN) Economy/Business - PlusNews, (IRIN) HIV/AIDS (PlusNews)


[This report does not necessarily reflect the views of the United Nations]
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