KEYNOTE ADDRESS BY THE DEPUTY MINISTER OF HIGHER EDUCATION, TRAINING, SCIENCE AND INNOVATION, MR BUTI MANAMELA, AT THE OFFICIAL LAUNCH OF THE ACTIVE PHARMACEUTICAL INGREDIENTS CLUSTER AND THE OPENING OF THE API+ LABORATORY, 11 MARCH, 2022

Programme director;

Prof Linda du Plessis, Acting Principal and Vice Chancellor, North West University;

Dr Richard Gordon, API Cluster Director;

Mr Gerrit van der Klashorst, Director, CPT Pharma;

Mr Patrick Krappie, Acting CEO of Technology Innovation Agency (TIA);

Representatives from local industry;

Government officials;

Researchers;

Stakeholders in the biotechnology sector;

Distinguished guests;

Ladies and gentlemen:

It is my honour and privilege to be speaking to you today on this historic day- the official launch of the Active Pharmaceutical Ingredients Cluster and opening of the API laboratory.

As you may be aware, as a country, we have one of the highest disease burdens in the world. While previous attention was more on interventions that were focused on communicable diseases, the past decade has shown a huge increase in non-communicable diseases such as cardiovascular conditions, hypertension, diabetes and cancers.

This development has obviously put a lot of strain on our national health system.  With marginal manufacturing of pharmaceuticals happening locally, this means that South Africa is dependent on imports when it comes to the health security of our citizens.

This is particularly risky given the lessons we have and continue to learn with regards to South Africa and Africa’s capacity to develop vaccines in response to the COVID-19 pandemic.    

You may also be aware that the local manufacturing of active pharmaceutical ingredients has been a priority of the South African government since the large-scale roll-out of government sponsored anti-retroviral (ARV) treatments for HIV/AIDS infected patients. Unsurprisingly, this constituted a huge part of our national health expenditure.

As you may also be aware, South Africa is the largest procurer of ARVs in the world (by volume) and sadly, 100% of the APIs used to make ARVs are imported. It therefore goes without saying that reliance on the importation of finished drugs or the API itself not only burdens the country with a security of supply risk, but also results in a significant trade deficit for the pharmaceutical sector- the fifth largest across all sectors for our country.

Related to this, research conducted in South Africa, changed the World Health Organisation (WHO) guidelines for HIV and TB treatments on a number of occasions. This is has placed increased significance on the need to harness significant investment by the private and NGO sectors as a way of strengthening our scientific and technological competencies, with the view to enhance our capacity to address some of the global health challenges, including HIV/AIDS, tuberculosis, and malaria.

It is also worth mentioning that, previous attempts to establish local API manufacturing by attracting multinationals with these capabilities have not been successful due to, among others, South Africa being perceived as being a non-competitive manufacturing environment.

Even though we have a well-established capacity in the procurement of APIs, packaging, labelling, distribution and the sale of pharmaceuticals, this has, however, not translated into API manufacturing strength.

To help address these challenges, in 2013, we as the Department of Science and Innovation (DSI) published our National Bio-economy Strategy, making South Africa one of six countries globally with such a strategy.

This strategy’s objective with regards to health is to support and strengthen our country’s local research, development and innovation capabilities to manufacture active pharmaceutical ingredients, vaccines, biopharmaceuticals, diagnostics and medical devices to address the disease burden while ensuring security and sustainable supply of essential therapeutics and prophylactics.

Therefore, the setting up of the Active Pharmaceutical Ingredients Cluster must be viewed as an implementation of our country’s Bio-economy Strategy and in particular our strategic goal of growing South Africa’s health economy by providing locally developed and relevant diagnostics and medical devices and grow the manufacturing thereof. 

In this respect, we do understand that, for API manufacturing to be viable and sustainable in South Africa, we need to develop world class commercial pharmaceutical manufacturing technologies with supporting skills, that can produce APIs and finished drugs competitively, against imports and provide sufficient capacity to support the regional export market.

This is over and above any incentives and favourable state contracts which may be available to improve the attractiveness of establishing local API manufacturing facilities. Choosing the right portfolio and pipeline of targeted API molecules will also be a key consideration for competitiveness.

Furthermore, for South Africa to sustain this model, a much more attractive incentive basket would need to be developed and offered to prospective investors that would address key investment decision drivers.

These could include the construction of a dedicated API and fine chemicals industrial park with pre-approved environmental licenses, established infrastructure such as central waste processing facilities, competitively priced and secure utilities supply, fast tracked license and approval processes, skills incentives and expatriate support, capital incentives, manufacturing rebates, export incentives and other tax incentives.

For these reasons, we must pursue our investment in the establishment of local API manufacturing capabilities, vigorously, as it will have a number of direct and indirect benefits.

 

The direct benefits would include forex savings, local value addition, job creation (both direct highly skilled positions and additional indirect positions), potential cost savings (competitive against low cost producers as a result of economies of scale), reliability of supply and improved quality standards.

The indirect benefits would include the development and diversification of the chemicals sector, export of APIs to the Southern African Development Community (SADC) and the whole African continent and human capital development.

In terms of research, the establishment of a nationally inclusive API research, technology development and innovation Cluster that ensures realignment of national research and development capabilities, commercialisation and government interventions, would go a long way in addressing our country’s drug production needs.

It is for this reason that, a key output of the Cluster is to develop and demonstrate improved competitive API synthesis processes that would lead to the compilation of valid Drug Master Files (DMF) for competitive manufacturing of targeted APIs by commercial industry partners.

The main output from the Cluster will be a cost competitive and improved commercial API synthesis technology demonstrator packages that can scaled up commercially into API manufacturing plants by industry partners.

It is important to state that, preference will be given to local industry partners that intend to utilise the Cluster developed technology to establish local API manufacturing facilities. Other equally important outputs will include high level skills development, peer-reviewed journal publications, patents and drug master files.

Ladies and gentlemen, all that we seek to achieve with the Cluster is also intended to help our country to employ technological innovation as a means to contribute to national imperatives of health for all, food security, poverty alleviation, job creation and socio-economic development as outlined in our National Development Plan.

In conclusion, we commend the hard work and vision that went into the establishment of this Cluster and are also pleased with the initial progress that has been made. All of this would of course not have been possible without the leadership and support of the North West University (NWU) and our entity, the Technology Innovation Agency (TIA) and our other strategic partners.

We have no doubt that this Cluster will strengthen our country’s local research, development and innovation capabilities to manufacture active pharmaceutical ingredients and in the long term, make a significant contribution to South Africa’s health economy.

Congratulations on this visionary initiative.

Thank you

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