EDITORIAL: Maybe penny wise, but very pound foolish

If the business case for investing in African vaccine production was ever hazy, the novel coronavirus pandemic made it crystal clear. The continent was importing 99% of its vaccines and, without any manufacturing capacity of its own, African nations were last in line when Covid-19 shots were in short supply. High-income countries had already vaccinated 60% of their populations when SA began administering jabs to the elderly in May 2021. Those delays cost lives.

It is a scenario no-one wants to see repeated. And so the world has poured money into new and existing African vaccine manufacturing initiatives, aiming to help the continent reach its goal of ensuring that by 2040, 60% of the vaccines it uses comes from its own facilities. The EU, for example, has put €40m into the World Health Organization-supported Afrigen mRNA vaccine production hub in Cape Town, and another €15.5m into state-backed vaccine manufacturer Biovac.

As these initiatives gain momentum, the big question has always been whether African governments will be prepared to pay a premium for the products made by start-ups that do not have the economies of scale enjoyed by established players.

The department of health has just answered that question somewhat emphatically, sending a shock wave through the sector with its decision to ditch Biovac’s locally made antipneumonia shot in favour of cheaper imports from India.

For years, the government was willing to pay Biovac a premium for the jabs provided in SA’s childhood immunisation programme, recognising that putting money into developing local vaccine manufacturing was worth some strain on the department of health’s purse strings. The state has poured billions of rand into the facility over the past 20 years, while Biovac laboured to secure a series of deals with multinational pharmaceutical companies such as Pfizer and Sanofi, who were willing to invest in its Pinelands facility and impart the technological know-how required to produce their shots.

All that good work was dealt a blow last week when the department announced that its 2024 tender for pneumococcal vaccines will go to the SA subsidiary of Indian generic pharmaceutical manufacturer Cipla, which will import the jabs from the Serum Institute of India. That leaves Biovac, which partnered with Pfizer in 2015 to produce its pneumococcal vaccine in the expectation that the state would purchase the jabs, scrambling to fill an unexpected and very large hole in its budget. Biovac believed it had a guaranteed market in the government, and currently has no other customers for these vaccines.

The department’s defence is simple: Cipla’s shot is significantly cheaper. None of the parties will disclose Biovac’s bid price, but we do know Cipla is providing its jabs at R97.06 a dose, which the department says is less than half of Biovac’s price.

While we ordinarily support lean procurement processes, this seems to be an astonishingly short-sighted view. The department has destabilised Biovac, sabotaged the policies of other departments seeking to promote SA’s nascent industry and undermined everything President Cyril Ramaphosa has done to promote African vaccine manufacturing.