The health department has defended its decision to switch its supplier of pneumococcal vaccines from state-backed Biovac to Indian-backed Cipla, saying the move was done to save money. Biovac’s bid price was “at least double” that put forward by Cipla, it said in a statement on Thursday.
Biovac entered into a partnership with pharmaceutical giant Pfizer in 2015 to help produce its 13-valent pneumococcal vaccine, in the expectation that the jabs would be purchased by the state.
But in a shock move, the health department announced last week that it had dropped Biovac in favour of Cipla for the next three-year contract to supply pneumococcal vaccines. Cipla, which has a pharmaceutical manufacturing plan manufacturing site in Durban, does not produce any shots in SA, and will import them from the Serum Institute of India.
“The health department could not ignore the benefits of savings from a company that was offering quality vaccine products at half price, which make it possible to increase services in the expanded programme on immunisation, and which also (allows us) to tackle more vaccine preventable diseases,” it said.
The government holds 47.5% of the shares in Biovac, with the remainder held by a consortium led by Immunotek. The state and multinational drug manufacturers have invested heavily in the facility over the past 20 years in an effort to revive SA’s human vaccine manufacturing capacity. For many years Biovac was the sole supplier of vaccines used in SAs childhood immunisation programme, importing those it did not make. The tender was opened up to other companies in 2020, but Biovac retained the lions’ share of the contracts, including the one for pneumococcal jabs.
For the next tender, which begins in 2024, Cipla will supply 12.6-million doses of a 10-valent pneumococcal vaccine at R97.06 per dose. Biovac currently supplies the government with a 13-valent pneumococcal vaccine, branded Prevnar, at R288.32 a dose. Neither Biovac nor the health department would disclose Biovac’s bid price for the 2024 tender.
“The department will always strive to look at practical ways to support local investment and production of medical products like vaccines. It is ... important to balance this with available financial resources within the prevailing legal framework,” it said, noting that Cipla manufactured antiretroviral medicines in SA and had rebuilt its Durban facility after it was damaged in the July 2021 riots.
Responding to Biovac’s complaint earlier this week that its officials had not sought to negotiate on price, the department said it could not do so because Biovac had not complied with some of the requirements and conditions of the contract, without elaborating. “It is the standard practice of the department to negotiate prices with all local manufacturers who submit responsive bids,” it said.
Biovac CEO Morena Makhoana said it had submitted the same documents as it did for the previous tender, and when officials sought clarification, it provided everything they asked for.
The department took issue with Pfizer’s assertion earlier this week that the government’s decision to switch from a 13-valent vaccine to a 10-valent jab was regressive. A 13-valent shot offers protection against 13 different strains of pneumococcal disease, while a 10-valent jab offers protection against 10 strains.
“At present, there are three pneumococcal-containing vaccines currently registered with the SA Health Products Regulatory Authority, containing the most prevalent serotypes that would be effective for use in SA. Any suggestion that PCV 10, as procured by the department, is not effective, is unfounded,” said the department.
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