South Africa’s R15.5 billion antiretroviral (ARV) procurement programme, which supplies treatment to roughly eight million people, is under parliamentary scrutiny after officials conceded they have not verified whether the majority of medicines are genuinely produced locally.
The Department of Health has long maintained that at least 70% of ARVs under the national tender are sourced from domestic manufacturers — a benchmark presented as both an industrial policy success and a safeguard for supply security. However, during a parliamentary briefing this week, procurement chief Khadija Jamaloodien acknowledged that the department only now intends to request batch manufacturing certificates to substantiate those claims.
Officials clarified that “local manufacturing” is defined under the Public Procurement Act as formulation, tableting and labelling carried out within South Africa, regardless of company ownership. This means foreign-owned firms with local facilities qualify as domestic producers.
Yet Deputy Director-General for National Health Insurance Professor Nicholas Crisp confirmed that no South African company manufactures active pharmaceutical ingredients (APIs), the core chemical compounds used in medicines. All such materials are imported, primarily from India.
Lawmakers cited customs data suggesting that several companies listed as local manufacturers have imported significant volumes of ARVs from India. Committee members questioned whether supplier declarations alone are sufficient to justify preferential procurement points and contract allocations.
Health Minister Dr Aaron Motsoaledi defended the government’s approach, noting that cost considerations have historically limited exclusive reliance on local suppliers. He recalled that expanding HIV treatment in 2010 required sourcing affordable generics internationally to maximise patient coverage.
With the tender already awarded, parliamentary committees have requested further documentation to verify the 70% local manufacturing figure. The debate highlights ongoing tensions between industrial policy ambitions, supply-chain resilience and fiscal constraints in one of the world’s largest public health programmes.
Source: South African parliamentary briefing on national ARV procurement programme
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