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SA’s two biggest local pharmaceutical manufacturers have been awarded a quarter of the government’s R18.3bn new AIDS drug tender, announced last week. The low-margin, high-volume AIDS drug business is an important part of maintaining a good relationship with the state and using spare manufacturing capacity, rather than boosting the bottom line. The three-year tender is a key aspect of the government’s strategy for meeting its goals of ensuring 6-million people are on treatment by 2020-21. SA has the world’s worst HIV/AIDS epidemic, and the world’s biggest treatment programme: there were an estimated 7-million people living with HIV by the end of 2017, and at the last count, the state was treating 4.2-million patients. Sasfin equity analyst Alec Abraham said the value of AIDS drug contracts for local pharmaceutical companies hinged on whether they had spare capacity in their manufacturing plants. “If they have spare capacity, the throughput of the ARV (anti-retroviral) tender helps t...

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