The South African Health Products Regulatory Authority (Sahpra) has dismissed as “unfounded fallacies and misrepresentation” allegations that it intended to use the Broad-Based Black Economic Empowerment (B-BBEE) policy in its registration assessments and licensing processes.
This comes after business federation Sakeliga - formerly Afribusiness - last week rejected Sahpra’s proposed BEE conditions for the manufacture, import, prescribing and trading of health products and medical equipment.
Sakeliga said Sahpra was planning to make B-BEE a prerequisite in the medical industry.
In effect, Sakeliga said Sahpra intended to prohibit the supply of health products and medical equipment that do not meet B-BBEE requirements.
“Such actions offer an alarming preview of the drastic consequences of an NHI system in which the state would have the entire medical supply chain under its control,” it said.
“The B-BBEE licensing of health products and equipment is a grim illustration of how B-BBEE promotes the narrow interests of politicians, bureaucrats, and self-enriching intermediaries at the expense of the public.
“It is inevitable that the addition of B-BBEE requirements – a measure with inherently no relevance for the effective supply of medical products – will lead to declines in the quality, affordability, and availability of medical products. The stifling effect will discourage both local and international operators,” the Sakeliga said.
However, Sahpra spokesperson Madimetja Mashishi yesterday said Sakeliga’s statement was premised on the false narrative, adding that it was a deliberate misrepresentation of Sahpra’s draft B-BBEE Policy.
Mashishi said the draft policy clearly and prominently indicated that this would not be the case, and that Sahpra’s health products registration processes would continue to solely rely on the safety, quality, efficacy, and performance of the health products.
“Any insinuations to the contrary are mischievous and do not exist in the policy currently or in Sahpra’s future plans. The draft policy proposes a two-phased implementation, the first being the requirement to submit a B-BBEE certificate as part of pharmaceutical establishment license applications,” Mashishi said.
“This phase would enable Sahpra to understand the industry structure and together with all stakeholders to develop criteria to be applied for the review of licence applications.”
Mashishi said once this phase was complete, the criteria developed would be implemented as part of the licensing process.
“However, there is no intention whatsoever for Sahpra to prescribe ownership percentages by certain population groups in new or existing licences and/or health products – this falls outside Sahpra’s legislative mandate,” he said.
“Nevertheless, it is important to ensure that the pharmaceutical industry moves towards developing sector codes similar to what has been successfully implemented in various other sectors of the economy including agriculture, mining, finance, tourism, and defence, among others.
“This is in compliance with the requirements of the B-BBEE Act and has no bearing whatsoever on any assumed conspiracies. Thus, Sahpra invites all stakeholders, including Sakeliga to peruse the draft policy and submit substantiated comments by September 9, 2024.”
Sakeliga has said that it will oppose the draft policy inside and outside the courts.
“Sakeliga will write to Sahpra during the comment period. However, we will not limit our actions to Sahpra’s comment opportunity and reserve all rights to oppose by way of litigation and otherwise the implementation of BEE licenses for medical products,” it said.
Sakeliga has been able to roll back the implementation of B-BBEE in government as it has won a couple of court cases against the Minister of Finance over procurement regulations, and is currently in court against the Minister of Employment and Labour over the Employment Equity Amendment Act.
Prof Terrence Kommal, a practising doctor and CEO of African Rainbow Healthcare as well as North West University Economic and Management Sciences lecturer, said recent judgments from South Africa's highest courts have reinforced the legitimacy and necessity of B-BBEE measures.
“Sahpra's policy plan to incorporate B-BBEE certification into its licensing process is a commendable step toward economic inclusivity. By mandating B-BBEE compliance for licensees, Sahpra not only aligns with constitutional principles but also sets a precedent for other regulatory authorities to follow,” Kommal said.
“The integration of B-BBEE measures into regulatory frameworks is not merely a policy choice but a constitutional imperative. With strong judicial backing from both the Constitutional Court and the Supreme Court of Appeal, regulatory authorities like Sahpra are empowered to enforce B-BBEE compliance effectively.
“As we move forward, it is imperative that all stakeholders—regulatory authorities, businesses, and civil society—work collaboratively to uphold and advance the principles of B-BBEE. By doing so, we can build a more inclusive and prosperous South Africa for future generations.”
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