For many years, the government has sought an equity partner for its state-owned pharmaceutical manufacturer Ketlaphela. What it fails to recognise is that rather than trying to produce pharmaceutical drugs, it should instead be creating a better economic and business environment in which existing manufacturers can thrive. Efficient governments do not invest in the production of goods and services. They leave that terrain to competitive private enterprises. If the government wishes to dispense welfare to the indigent, it could better achieve that goal by purchasing quality goods and services at the lowest prices from privately competing providers. Ketlaphela’s initial objective is to produce drugs to treat the communicable diseases of HIV/AIDS, tuberculosis and malaria, but also plans to target noncommunicable diseases such as cancer. However, the government would do well to recognise that not only does it already have access to drugs produced by highly efficient manufacturers, but i...
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