By Lehlohonolo Lehana.
The Department of Health says it is concerned about the reports that local vaccine manufacturer Biovac was left out in the cold after it decided to switch to a cheaper supplier to provide jabs against pneumococcal diseases like pneumonia for children.
The bio-pharmaceutical company (Biovac) is the result of a partnership formed with government in 2003 to establish local vaccine manufacturing capability.
This follows an article on BusinessLIVE, that the department is it at odds with its policies “to support domestic vaccine manufacturing capacity and improve the security of supply for both SA and the rest of Africa”.
According to the publication, Cipla will now be the sole provider of 12.6 million doses of the 10-valent pneumococcal vaccine (PCV), which is believed will impend Biovac’s expansion plans and jobs.
However, the department stressed that as a government procurer, it has an obligation to ensure that all procurement is aligned to the five pillars of procurement of goods and services.
These include value for money, open and effective competition, ethics and fair dealing, accountability and reporting, and equity.
“It is the standard practice of the department to negotiate prices with all local manufacturers who submit responsive bids.
“However, for this item, Biovac did not comply with some of the requirements and conditions of the contract and therefore made it impossible to enter into negotiations for price.
“What complicated matters further was that Biovac’s bid price was at least double the price of the competing company.”
Contrary to what the article says, the department stated that Cipla has been in the country for many years contributing to local investment and job creation like any other company, in compliance with local labour laws.
“While it’s true that Cipla has its parent company in India, the company has shown commitment to continuing investing in South Africa.
“Even after its plant was destroyed during the July uprisings in 2021 in Durban, it has invested in rebuilding the plant and it is fully operational.”
The department also said it could not “ignore” the benefits of savings from a company, which was offering quality vaccine products at half price.
But Dr Morena Makhoana, CEO of The Biovac Institute says government’s decision in the case of this tender “does not bode well” for the industry going forward.
More importantly, it has serious implications for pandemic readiness going forward he says.
How will we ever be ready if our local market is not supporting of us? asks Makhoana.
“We haven’t got a clear answer from the Department as to why that was not even considered, unfortunately, added Makhoana.
He notes it has happened before that the Health Department’s asked Biovac to reconsider their price, but chose not to exercise the option this time round.
The department said it will always strive to look at practical ways to support local investment and production of medical products like vaccines, and it is also important to balance this with available financial resources within the prevailing legal procurement frameworks,” the department added.
The department also explained that it has a long relationship with Biovac starting with a Public-Private Partnership (PPP) agreement in 2003 to prioritise the local manufacture of vaccines.
This resulted in a supply agreement with Biovac as the sole supplier of all vaccines used in the EPI from 2003 until June 2020 when the supply agreement ended.