In 2009 we introduced the ten point programme, for the Department of Health, to turn around the health situation in the country. One of the areas of attention was a review of the drug policy; this is point number nine in the ten point plan. Why should the drug policy be reviewed? Well, medicines are a critical component of an effective health care system. Patients should have access to essential medicines that are of good quality, safe, effective and affordable.
The Director-General for the World Health Organisation, Dr Margaret Chan, in her address to ministers at the World Health Assembly identified seven problems that health care systems experience. Dr Chan identified the rising health care costs and poor access to essential medicines especially affordable generic products as being one of these problems. In order to address these challenges of access to essential medicines we issued a tender in December 2010 for antiretrovirals.
This tender was valued at 8.8 billion rand. We were able to reduce the cost of the tender to 4.2 billion rand which is a saving of 4.6 billion rand. Working with international organisations such as Clinton Health Access Initiative, World Health Organisation, UNAIDS we were able to develop innovative strategies to reduce prices of ARVs. The first of these strategies is to ensure that there is an adequate number of products registered with MCC. Secondly, by encouraging all potential suppliers, including international suppliers, to participate in the tender.
Thirdly, we published a reference price list based on international transactional prices as the maximum price we are prepared to pay. Fourthly suppliers were required to provide a breakdown of their cost components. Finally we negotiate prices with suppliers where we find prices to be too high. In the 2010 tender we were able to reduce the expenditure on ARVs by 53% which is a massive saving. This was followed by the 18% saving that we were able to achieve on the tender for anti-TB drugs. Addressing the HIV Clinician Society on Sunday, Professor Guzzard an expert advisor to the UK government on HIV and head of one of Europe’s largest clinical units stated that “thinking of cost and using the appropriate drug is more important than discussing when ARV therapy should be initiated. We are going to be saddled with treatment for the next forty years, so let us make it work and accessible.
Doctors here need to discuss how to give the cheapest and simplest treatment to the largest number of patients.” I want to emphasise that our understanding of cheap means affordable and not low quality. Today it is my pleasure to announce to you that we have achieved exactly what was being recommended at the conference of the HIV Clinicians’ Society. We have awarded a new tender to the value of R5.9 billion over two years. As you are aware our ARV programme is an expanding one where we have 1.7 million patients on treatment currently and we hope to expand this to 2.5million by the end of 2014. This new tender was initially expected to cost 8.1 billion based on prices of the current tender however in pursuit of affordability and using innovative methods we have been able to reduce the cost of the tender by 38% which is a massive saving of 2.2 billion. So this means that this new tender has moved from an original cost of 8.1 billion to 5.9 billion for 2 years.
This saving means we can treat more patients with the same budget. In addition to the savings we have also been able to offer patients the latest advance in ARV formulations that is the triple fixed dose combination once daily tablet. We have awarded a tender for the triple fixed dose combination of tenofovir, emtricitabine and efavirenz, which is a single tablet. This in simple language means that a patient does not have to take 3 tablets a day and can now take 1 tablet once a day. We believe that this has major benefits for patients in terms of compliance. It also means that logistics and storage are reduced; additionally there are fewer side effects with this combination.
The fixed dose combination brings with it an additional extraordinary benefit. As you may remember, from April 2011 we moved to universal coverage where all HIV positive patients with a CD4 count less than 350 were put on ARVs. Now because of this new fixed dose combination from April 2013 all pregnant women will be given the fixed dose combination during pregnancy and breast feeding and thereafter if their CD4 count is less than 350. WE will also be keeping a register of these patients so we can monitor their progress and check for side ffects. This intervention will protect the baby and the mother. The fixed dose combination is more effective than dual therapy and has fewer side effects for the pregnant mother, in addition to its’ convenient dosage regimen.
The majority of patients on the 3 ARV drugs will be able to be switched to the fixed dose combination. For those that cannot be switched we are still going to keep the individual ARV drugs as well. In the table below you will note that we have been able to reduce the price of these key ARVs in this new tender as well.
| Drug | 2010 Price | 2012 Price |
Percentage reduction: 2010 to 2012 |
| EFAVIRENZ 600mg tablets | R39.22 | R29.93 | 24% |
| LAMIVUDINE 150mg tablet | R18.22 | R14.85 | 19% |
| NEVIRAPINE 200mg tablet | R22.99 | R18.61 | 19% |
| TENOFOVIR 300mg tablet | R54.82 | R29.00 | 47% |
As far as we are concerned South Africa has become the lowest price setter for ARVs in the world.
Dedicated technology is required to formulate the fixed dose combination drug and this means that manufacturers will require some time to start up their production so we expect that the fixed dose combination will start becoming available in facilities at the beginning of April 2013. Thereafter there should be no delays in supply. We have awarded the tender for the fixed dose combination to three companies Aspen Pharmcare, Cipla Medpro and Mylan pharmaceuticals.
This is going to be a key drug in the ARV programme therefore we had to split the quantities so that there is no interruption of supply if one supplier experiences problems. We have also asked suppliers to give us their commitment on this and all three of them have done so. We have also invited them here today so that they can confirm this to you personally. The price of the fixed dose combination is R89.37. This is now the worlds lowest priced for this product.
The tender awards were distributed as follows:
Bidder v.s Total value (%) in 2012
Abbott: 8.1%
Adcock: 14.0%
Aurobindo: 1.0%
Dezzo: 0.01%
DPR Pharmaceuticals: 3.9%
Cipla Medpro: 9.0%
Medivision: 19.1%
Medpro: 15.5%
MSD: 0.01%
Pharmacare: 20.6%
Sonke: 1.5%
Specpharm: 0.5%
We are also happy to report that local manufacturers have been price competitive in this tender. Local manufacturers submitted bids against 23 items and were awarded a portion or the entire quantity on 21 of these items.
This comprises approximately 70% of the volume of the entire contract.
We did experience challenges in the supply of certain ARVs in the previous tender due to a number problems including the inability of suppliers to produce the quantities required particularly in the case of Tenofovir. We have been able to alleviate these challenges through prior assessment of supplier capacity and issuing multiple awards for high volume medicines.
The department would like to thank all bidders in this tender for their positive response to this tender which has allowed South Africa to again get the world’s best prices for ARVs. There has been some tough negotiations with suppliers which I am sure they will understand is the best interest of patients. We are now able to treat more patients with the same budget.
I thank you.
