On February 18, South African Health Minister Manto Tshabalala-Msimang announced that her department has completed negotiations with drug companies to supply antiretroviral drugs to state hospitals. The tenders are to be awarded “shortly.”
The announcement comes two days after a TAC march on Parliament to demand greater access to antiretroviral treatment (ART) — and a full fifteen months after South Africa’s Cabinet approved a plan to provide comprehensive care — including antiretroviral treatment (ART) for people living with HIV and AIDS.
When first announced, the treatment plan, which was co-authored by the Clinton Foundation, provided “for a system of drug procurement that will secure drugs at prices well below today's best international prices.” The sheer size of the South African market should help the country negotiate a very good price.
However, the procurement process was so slow getting started that many activists questioned whether the South African government truly intended to go ahead with the ART rollout.
The health department only got around to issuing a request to the pharmaceutical industry for proposals to supply the government with drugs in March 2004. At the time, the health minister promised that tenders would be sent out by June of that year, which then got pushed back to August, and so on.
In the interim, provincial health departments have been purchasing antiretrovirals, primarily relatively expensive brand name products at the best available listed price. As a result the drug supply has been irregular and uncertain — and more costly than initially anticipated.
Original purchasing plans sidelined
The delay in the national purchasing programme may be traceable to troubles between the Ministry of Health and the Clinton Foundation around the time the treatment plan was approved. The Foundation had originally committed to help in the plan’s implementation — especially lending its expertise in the procurement of affordable generic antiretroviral medications.
In fact, the Foundation had used their forecasts of South Africa’s demand for ART to help secure an initial agreement from generic drug manufacturers to supply a triple-drug ART combination to treatment programmes in several nations — including South Africa — for only $132 dollars each year per person. The price that was more than 50% lower than the previous best price offered by a generic manufacturer for this triple combination (see aidsmap news story).
The Clinton Foundation announcement was the likely cause of a fallout between the South African Ministry of Health and the Clinton Foundation. While South Africa had promised to contribute millions of Rand to pay for its HIV programme, it was also expecting to qualify for vast sums from President Bush’s $15 Billion Presidential Emergency Plan for AIDS Relief (PEPFAR). But PEPFAR’s head Randall Tobias (former CEO of Eli Lilly Pharmaceuticals) had grave concerns about using PEPFAR monies to buy generic antiretrovirals. (See aidsmap news story).
This put the South African government in a delicate situation. Ever the statesman, it was not like President Mbeki to antagonise President Bush or embarrass former President Clinton. So South Africa quietly decided to proceed with implementation on its own, which meant foregoing Clinton Foundation assistance — and procuring the supply of drugs by itself.
This partly explains the government’s refusal to release the implementation schedule of the treatment plan, Annexure A, to the public. TAC has sued the government for force it to make this document public as it lists the sequence and delegation of tasks that needed to be performed to implement the programme successfully. But releasing the original document would have revealed the Clinton Foundation’s extensive involvement in the plan’s implementation — as well as the plan’s original reliance on generic drugs.
South Africa’s subsequent procurement process has been halting at best. Many generic companies complained of being shut out of the process — which mostly seemed tailored to favour the Western pharmaceutical industry and/or possibly, the development of South African sources.
Some activists have alleged that the South African procurement process was waiting for the US Food and Drug Administration (and PEPFAR’s) nod of approval. It is notable that, only three weeks ago, the FDA announced that it had approved a coblistered triple combination of AZT, 3TC and nevirapine manufactured by the South African company Aspen Pharmacare. Other combinations are in the pipeline.
Although the combination cannot be sold in the US while the branded pharmeceutical drugs are still patent-protected, the Aspen product has received tentative approval. This means that developing countries can now use President’s Emergency Plan for AIDS Relief (PEPFAR) monies to purchase the product in other countries where the drugs are off patent or the innovator pharmaceutical companies have given Aspen a license to sell generic versions of their drug. And Aspen has obtained just such a license to market the drug to the public sector in South Africa (and other African countries).
Aspen Pharmacare has forged a number of interesting licensing arrangements with innovator pharmaceutical companies. In fact, a year ago, Aspen formed a partnership with Eli Lilly to manufacture drugs to treat multidrug resistant tuberculosis, including two patented tuberculosis drugs, capreomycin and cycloserine.
Aspen is unlikely to supply all of South Africa’s antiretroviral market — one of the principles of procuring a dependable and consistent supply of medicine is to not be overly reliant on any one manufacturer. Furthermore, not all companies are willing to license out generic versions of their drug in ANY market. For example, Abbott will not permit a generic version of Kaletra — which is an important though hard-to-afford second line HIV drug in many resource limited settings.