Naledi Pandor. Picture: Trevor Samson
Naledi Pandor. Picture: Trevor Samson

Science and Technology Minister Naledi Pandor is set for tough questions about state-owned pharmaceutical company Ketlaphela at the ANC’s policy conference next month, as the government’s ambitions to manufacture HIV/AIDS drugs remain unrealised 10 years after the idea was born.

The project is also behind the target mentioned by President Jacob Zuma in his state of the nation address in 2016, when he said Ketlaphela would start supplying the Department of Health with antiretrovirals (ARVs) from the 2016-17 fiscal year, which ended on March 31.

On Tuesday, Pandor conceded the target had not been met.

"Ketlaphela has not begun providing ARVs to the health system as finalising partnership agreements and preferential agreements requires much more time. Discussions with likely partners have been positive, however final sign-off has a range of caveats such as up-front order commitments from the health sector. That is difficult to achieve, given various statutes on procurement and the PFMA [Public Finance Management Act]," said the minister.

Establishing a state-owned pharmaceutical company was an ANC policy decision taken at Polokwane in 2007. It was established as a joint venture among Ketlaphela Pelchem, the only fluorochemical company in the southern hemisphere, the Industrial Development Corporation and Swiss pharmaceutical manufacturer Lonza.

The goal was to use SA’s abundant flourspar reserves to make active pharmaceutical ingredients for HIV/AIDS drugs, but those ambitions were scaled down after Lonza pulled out and the department failed to find alternative investors. Four other potential partners initially expressed interest but pulled out because they did not think the venture commercially viable.

The department then decided to press ahead with a new model that involved sourcing and supplying Ketlaphela-branded antiretrovirals to the Department of Health, while it built manufacturing capacity.

Pandor said a manufacturing site had been identified, but the department’s efforts were focused on establishing partnerships with private sector companies and an upfront preferred supplier agreement with the Department of Health.

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