A state pharmaceutical company is the only solution to curb the voracious greediness of pharmaceutical companies

14 June 2017

The announcement by the Competition Commission that it was investigating pharmaceutical manufacturer Aspen Pharmacare and Roche and Pfizer for suspected excessive pricing of their cancer drugs is a reminder of the immorality of the capitalist system and the voracious greediness of pharmaceutical companies. This is troubling because it’s an old problem that has been neglected by our government; despite a clear and unambiguous resolution by the ANC, for a need to establish a state pharmaceutical entity. 

The pharmaceutical companies have a terrible record of sabotaging the healthcare in this country. In 2001 the same pharmaceutical companies held the entire nation’s health and well being to ransom, when they lobbied against the implementation of the Medicines and Related Substances Control Amendment Act. This happened while thousands of people were dying from curable diseases and when the Aids epidemic was worsening.

The greedy Pharmaceutical Manufacturers Association (PMA) an association of multinational companies who have rights to the drugs that treated some opportunistic diseases even lobbied the American government to impose sanctions on South Africa at the time, if government continued to implement the law.

COSATU has been consistently calling for the implementation of the ANC decision that was adopted at the 2007 ANC Polokwane Conference of a state pharmaceutical company. We know nothing of what became of Ketlaphela, a company that was supposed to be at the heart of our drive to expand domestic production of pharmaceuticals. Ketlaphela was supposed to commence its production in 2016 and currently the production of pharmaceuticals is still driven by just narrow economic considerations, something that is unsustainable for a country like ours, with such a high disease burden.

COSATU believes that South Africa’s health problems will not be resolved; until our government takes seriously the issue of the establishment of a state pharmaceutical company, accompanied by a comprehensive pharmaceutical sectoral strategy.

The federation remains adamant that the nation must establish the state pharmaceutical company as a matter of urgency noting that global and regional power and national stability will not be determined by those who control arms, but by those who control access to medicine. The state pharmaceutical company will increase the capacity of the state to provide an uninterrupted supply of medicines, at a scale which the National Health Insurance {NHI} would require. This endeavour would also enable the country to adequately respond to the health needs of the population, as reflected in the extent and nature of our disease burden.

The current resistance by the department of health and National Treasury to both the NHI and a functional state pharmaceutical entity points to the vulnerability of the South African population to disease and poverty.

We support the Competition Commission’s investigation and want to see all those executives found to be responsible to be held personally accountable and criminally liable for the loss of life as a result of the collusion.

COSATU reiterates its opposition to the 10% of the company’s turnover as a maximum penalty because these big institutions do not view it as a deterrent. They just pay the levy and recover the penalty through charging the consumer at a later stage.  Furthermore, the 10% can be reduced depending on the mitigating factors and this leniency programme sometimes results in the company being required to pay less than 10%.

This investigation should also serve as a wakeup call to our government that the failure to pursue the fundamental restructuring of the South African economy and address the level of concentration of economic power into a few hands and monopolies sometimes has life and death consequences.

If the democratic government does not succeed in seizing this initiative and thoroughly transforming the economy, it will lose an opportunity to test its economic ideas in practice. 

Issued by Sizwe Pamla, National Spokesperson, COSATU, 14 June 2017