The national Department of Health has rejected assertions by a pharmaceutical industry body that its procurement choices triggered the loss of 2,500 jobs in the sector over the past 18 months, saying the group presented a distorted account to Parliament.
Department points to competitive and regulatory factors
Pharmaceuticals Made in South Africa (Pharmisa), whose membership includes major manufacturers such as Aspen Pharmacare, Adcock Ingram, Biovac, Sandoz, the National Bioproducts Institute and Fresenius Kabi, told Parliament’s portfolio committee on trade, industry and competition that the department’s emphasis on price had undercut local suppliers and reduced their share of key public medicine tenders.
In its submission to MPs, Pharmisa said local manufacturers’ share by value of the HIV/AIDS drug tender fell from 72% in 2008 to 28% in 2025, and that their share of the tablets and capsules tender dropped from 56% in 2014 to 18% in 2026. It linked those shifts to job losses and criticised the health minister’s decision to award a below-inflation 1.47% increase for private sector medicine sales in 2026.
“South Africa needs a mature discussion about how to strengthen local pharmaceutical manufacturing. It does not benefit from sensationalism or the selective use of procurement data to create the impression that public procurement has failed,” the department said in response.
The department’s rebuttal, released over the weekend, accused Pharmisa of glossing over broader market developments and recent regulatory changes that have increased compliance costs for manufacturers. It said a reduction in the value of some contracts awarded to particular firms does not, by itself, demonstrate that government procurement policy has failed but reflects a dynamic and increasingly competitive market.
Key issues at stake
The dispute highlights several intersecting tensions in South Africa’s pharmaceutical ecosystem:
- Price versus local industrial policy — Government procurement seeks value for public funds, while local manufacturers argue for protection to sustain jobs and capacity.
- Regulatory compliance — More stringent requirements can raise production costs and affect competitiveness.
- External pressures — Global supply-chain disruptions and geopolitical events, such as the conflict in the Middle East, were cited by industry as factors increasing input costs.
The department emphasised the need for a sober, evidence-based debate about how best to bolster local manufacturing rather than what it called selective use of procurement data.
| Claim | Figures cited |
|---|---|
| Jobs lost (industry claim) | 2,500 in 18 months |
| HIV tender share (local manufacturers) | 72% (2008) to 28% (2025) |
| Tablets & capsules tender share | 56% (2014) to 18% (2026) |
| Private sector medicine sales increase (ministerial decision) | 1.47% (2026) |
Implications for public health and industry
Decisions about tendering and pricing have consequences for medicine affordability and for local industrial capacity. If public purchasers prioritise lower-priced imports, this can reduce contracts for domestic firms and may, proponents say, weaken manufacturing ecosystems needed for long-term supply security.
Conversely, prioritising higher-priced local production could raise immediate procurement costs for the health sector and constrain other budget priorities. The department framed its stance as seeking balance: protecting public budgets while recognising the need to support a sustainable local industry.
Industry representatives also warned that rising input costs and regulatory burdens have squeezed margins. The department countered that these factors were not given due weight in Pharmisa’s presentation to MPs.
Parliamentary scrutiny of procurement is likely to continue as lawmakers weigh competing objectives: ensuring medicines are affordable and available for patients while seeking to preserve jobs and industrial capacity within South Africa.
Patients and the public are advised to consult clinics or doctors for treatment questions rather than drawing conclusions from debates about procurement and industry policy. The broader policy debate will involve the health, trade and industry portfolios as well as industry stakeholders and unions.
