ANC unveils state drugs plan

The ANC wants the government to establish a state-owned pharmaceuticals company.

At a media briefing at its Luthuli House HQ in Johannesburg yesterday, party secretary-general Gwede Mantashe said consideration was given to "the establishment of a state pharmaceuticals company as resolved in the 2007 ANC national conference in Polokwane".

A four-day meeting of the ANC national executive committee ended on Sunday.

"There was a serious discussion of starting a state pharmaceuticals company. We consume 25% of all anti-retrovirals in the world; 17% of the world's HIV infections are in South Africa. There is a compelling case for us to start a state-owned pharmaceuticals company."

Mantashe said the state-owned mining company also started as an idea: "That company is now running a coal mine and will open another one soon," he said.

The state pharmaceuticals company would not be a threat to other enterprises in the sector.

"This doesn't mean the pharmaceuticals industry will close down. The state-owned pharmaceutical company will operate within the industry," he said.

Aids drugs are made on behalf for the state by groups such as Aspen Pharmaceuticals and Adcock Ingram.

According to Business Monitor International's pharmaceutical business environment ratings, South Africa offers a lucrative market to drugs producers.

The company's research, released in the first quarter, reveals that spending on pharmaceuticals in South Africa reached R22-billion in 2009 and would have risen to R24.5-billion last year.

Vicki St Quintin, chief operating officer of the Pharmaceutical Industry Association of SA , questioned the ANC's motives for considering entering the sector.

"We have to ask if this is the best allocation of government resources," she said. "The majority of tenders [for HIV drugs] have been taken by local companies," she said, referring to Aspen and Adcock Ingram.

"The way in which the government procures would possibly have an impact on our members.

"If first preference would be given to the government company, then it could have a significant impact."

Abongile Makwabe, senior development analyst at Adcock Ingram, said most companies in the sector would be adversely affected because most of them did business with the government.

"Most of the companies are involved in the running of government tenders. If that were to change, everyone would be affected."

The decision to enter the pharmaceuticals industry follows an ANC decision to push the government to enter the banking sector by re-engineering the Post Bank, which now provides a limited range of banking services.