The Department of Health says it is concerned about the allegations contained in an article published in Business Day about the unfair awarding of a medical products tender.
According to the Business Day article published on Wednesday, the department picked a cheaper supplier of vaccines – Cipla, over Biovac, which is partly owned by the South African government, to supply jabs to protect children against deadly pneumococcal diseases.
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.
According to the statement, this will make it possible to increase services in the Expanded Programme on Immunisation (EPI), which allow the ability to tackle more vaccine-preventable diseases.
“The department 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.
In 2009, the department explained that the pneumococcal-containing vaccine (PCV) was introduced in the EPI programme and sourced from Biovac in terms of the PPP.
“At that time, in 2009, Biovac entered into a technology transfer agreement with Pfizer for the local manufacturing of PCV13.
“At present, there are three pneumococcal-containing vaccines currently registered with SAHPRA [South African Health Products Regulatory Authority] containing the most prevalent serotypes that would be effective for use in South Africa, thus any suggestion that PCV10, as procured by the department, is not effective, is unfounded.” – SAnews.gov.za
