South African Pharma Industry: Workforce Appraisal & Proposed Development Strategy
The past two decades have changed the pharmaceutical sector and health care delivery in both developed and emerging economies. The increasing use of generic medicines globally, 1 the consolidation of manufacturing into centers of excellence—mainly in Asia—and evolution of supply chains have been driven by rising demand for health care, decreasing budgets, and pressures to drive medicine prices down. 1 , 2 The emphasis on improved health outcomes—especially for women, children, and those with HIV/AIDS—further increased demand for medicines, particularly in emerging economies on the African continent.
- 1 a b Quintiles IMS Institute. Outlook for Global Medicines Through 2021: Balancing Cost and Value. December 2016. http://static.correofarmaceutico.com/docs/2016/12/12/qiihi_outlook_for_global_medicines_through_2021.pdf
- 2Maloney, Christopher, and Nick Segal. “The Growth Potential of the Pharmaceuticals Sector in South Africa.” Genesis Analytics, 29 May 2007. http://ipasa.co.za/Downloads/IPASA%20and%20Pharmaceutical%20Industry%20ProfileGENESIS%20Pharmaceuticals%20Report%20070529%20(2).pdf
The global pharmaceutical market, valued at $1.1 trillion in 2017, 3 is expected to grow to $1.4 trillion by 2020, representing a 4.2% compound annual growth rate (CAGR). Sub-Saharan Africa is expected to lead the trajectory at a rate of 7.5% CAGR.3 The South African pharmaceutical market was valued at $3.2 billion in 2017, making it the biggest in Africa (ahead of Nigeria, Egypt, and Kenya). 4
The Department of Trade and Industry (DTI) reports, however, that the country’s import penetration rate for pharmaceuticals (the ratio of pharmaceutical imports to exports) is a staggering 65% 5 and growing disproportionately. According to Quantec, a leading consultancy on economic and financial data, the pharmaceutical trade deficit totaled $15.35 billion between 1993 and 2017. 6 This led to the pharmaceutical industry being the fifth leading driver of the national trade deficit.5
South Africa’s pharmaceutical trade deficit can be attributed to a considerable shrinkage of the country’s pharmaceutical manufacturing capacity: 37 plants closed in the late 1990s and early 2000s. 5 The country’s weak pharmaceutical industry is due to factors such as a lack of access (perceived or real) to capital, tariff structures that favor low-cost imports, and an insufficiently skilled labor force. The latter was well documented in a 2011 study commissioned by the DTI to investigate the human capital outlook within the domestic pharmaceutical industry. The study highlighted considerable constraints as well as the lack of a coherent, evidence-based, demand-driven skills development strategy for the sector. 7
Policy Developments
Following the advent of democracy in South Africa in 1994, the 1996 Constitution declared that access to adequate health care (including medicines) is a human right and describes the state’s responsibility to ensure that sound regulations and laws promote affordability and improve access to health care (including medicines). The key policy objective of the 1997 “White Paper for the Transformation of the Health System in South Africa” was to promote equity and accessibility to health services. Pharmaceutical care was dealt with extensively in a document called the National Drug Policy (NDP), part of the White Paper addenda that guided the recalibration of the policy frameworks from the previous segregated health care system.8
As depicted in Table A, wide-ranging legislative reforms were enacted on both the demand and the supply sides of the pharmaceutical industry to promote access to medicines. Inadvertently, some of the legislative reforms had a profound impact on the pharmaceutical human capital in the country. Section 22F of the Medicines Act, for example, allows generic substitution; the Patents Act amendment allows generics to be registered while the original patent is still valid. These pro-generic legislative reforms led to an influx of generic drug applications at the Medicines Control Council (MCC), then the South African regulatory authority. The increase in drug applications created considerable challenges for the council’s ability to process applications, resulting in drug registration backlogs. These delays deny patients timely access to affordable, high-quality, safe, and efficacious medicines. 9 , 10
Reconfiguration of the Pharmaceutical Landscape
Key developments in the South African health care system are likely to have a considerable impact on the pharmaceutical workforce. These include the National Health Insurance (NHI), the South African model of universal health coverage, which has been in a pilot phase since 2012.11 The NHI is intended to remove barriers to health care access, including medicines. This is expected to significantly increase the consumption of medicines, and will likely exert pressure on the supply side of the fragile market, which relies on pharmaceutical imports.
The South African Health Products Regulatory Authority (SAHPRA) has been established to recalibrate the local pharmaceutical industry. Introduced in 2018, SAHPRA replaced the 50-year-old MCC, which had not kept up with legislative changes. Registration delays spanning an average of three years or longer had become an industry norm owing to the influx of registration applications. 9 SAHPRA is expected to improve efficiencies and reduce timelines for medicine registrations. This goal is unlikely to be realized, however, unless agile skills development and retention strategies are adopted by the agency and in industry.
- 3 a b Business Monitor International. Industry Forecast. Global Pharmaceutical Market: Q2 2018.
- 4Business Monitor International. South African Pharmaceuticals and Healthcare Report: Q1 2018.
- 5 a b c Republic of South Africa. Department of Trade and Industry. Industrial Policy Action Plan 2013/14 –2015/16. 2013. http://www.thedti.gov.za/news2013/ipap_2013-2016.pdf
- 6Soomaroo, S. “The DTI’s Involvement in the State’s Procurement of ARVs.” Republic of South Africa. Department of Trade and Industry. Briefing note to the Portfolio Committer on Economic Development. 28 June 2017. https://www.thedti.gov.za/parliament/2017/Pharmaceuticals.pdf
- 7Republic of South Africa. Department of Trade and Industry, and iLangalibe la se Africa. Human Capital Outlook Implications for Skills Development in the Pharmaceutical Sector. December 2011. http://www.lmip.org.za/sites/default/fi les/documentfiles//Pharmarceutical%20Study.pdf
- 8Hassim A., M. Heywood, and J. Berger. Health and Democracy: A Guide to Human Rights, Health Law and Policy in Post-Apartheid South Africa. Siberlnk, 2007.
- 9 a b Leng, H., D. Sanders, and A. Pollock. “Pro-Generics Policies and the Backlog in Medicines Registration in South Africa: Implications for Access to Essential and Affordable Medicines.” Generics and Biosimilars Initiative Journal 4, no. 2, (4 April 2015): 58–63. http://apps.who.int/medicinedocs/documents/s22089en/s22089en.pdf
- 10Keele, M. G. “Beyond Patent Expiry: Development of a Model for Pricing Generic Drugs in South Africa.” PhD thesis, University of the Witwatersrand, Republic of South Africa. 2017.
- 11Republic of South Africa. Department of Health. National Health Insurance for South Africa: Towards Universal Health Coverage. Version 40. 10 December 2015. https://www.health-e.org.za/wp-content/uploads/2015/12/National-Health-Insurance-for-South-Africa-White-Paper.pdf
Skills Development Strategy Proposal
In its Industrial Policy Action Plan (IPAP), the South African government has designated the pharmaceutical industry as a priority sector and has installed several mechanisms and measures that seek to increase local production of pharmaceuticals.5 To adequately address this challenge the DTI, in partnership with the United Nations Industrial Development Organization, convened a multi-stakeholder consultative forum in 2015 to establish a cutting-edge skills development strategy for the sector. Contributions were solicited from a broad range of actors—policymakers, academicians, pharmaceutical manufacturers, the regulatory body, and various national government departments.
In aligning with Agenda 2030 (the United Nations’ Sustainable Development Goals), National Development Plan for South Africa, and the South African Pharmacy Council, the meeting developed its own version of Vision 2030. Industry stakeholders envisioned the South African pharmaceutical industry in 2030 as “a globally competitive pharmaceutical manufacturing industry that is able to supply the majority of its requirements for cost effective high-quality medicines.”
As depicted in Table B, a broad range of strategic skills development objectives were proposed at the forum. Some of the most critical were industry concerns about the ill-preparedness of pharmacy graduates for pharmaceutical manufacturing.
Legislation and Regulation
South Africa’s pharmaceutical industry employs pharmacists in a wide range of positions such as production, regulatory affairs, quality assurance, responsible pharmacists, etc. National regulation dictates that pharmacies, including manufacturing pharmacies, should be under a custodianship of a responsible pharmacist (RP), 12 the equivalent of a “qualified person.” 13 An array of staffing types will be required to prepare RPs and other pharmacists for their roles in the pharmaceutical industry, even as the NHI and SAHPRA are likely to have a profound effect on the pharmaceutical workforce.
It is imperative that new cadres of pharmacy personnel such as pharmacy technicians, pharmacy technical assistants, 14 and specialist pharmacists 15 ,16 account for the competencies required by the pharmaceutical industry. Additionally, because the pharmaceutical industry is a knowledge economy, such reconfiguration must support Industry 4.0. Mechanisms are required to fulfill the role that the now-defunct Regulatory Science Institute was earmarked to fulfill. Professional associations, academia, regulatory authorities and other critical stakeholders should collaborate to craft a cutting-edge skills development strategy, then oversee its execution and swift implementation.
| The Constitution of the Republic of South Africa, 1996 | |
|---|---|
| Section 27(1) | Everyone has the right to have access to health care services (Bill of Rights) |
| Section 27(2) | The state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realization of each of these rights (Bill of Rights) |
| White Paper on the Transformation of the Health System in South Africa | |
| Goals & Objectives | To promote equity, accessibility and utilization of health services |
| To extend the availability and ensure the appropriateness of the services | |
| National Drug Policy of the Republic of South Africa | |
| Health Objectives | To ensure the availability and accessibility of essential drugs to all citizens |
| Economic Objectives | To lower the cost of drugs in both the private and public sectors (by developing specifi c strategies to increase the use of generics in South Africa) |
| National Objectives | To support the development of the local pharmaceutical industry and the local production of essential drugs |
| Medicines and Related Substances Act (No. 101 of 1965 as Amended) | |
| Section 15C | Made provisions for parallel importation of medicines that are still under patent to South Africa for public sector |
| Section 18A | Forbids supply of medicines in terms of bonus, rebates, and incentives schemes |
| Section 18B | Forbids the sampling of medicines |
| Section 22A | Control of medicines and scheduled substances |
| Section 22C 1(b) | Empowers the government, through the MCC, to prescribe the standard for manufacture of medicines in South Africa: PIC/S |
| Section 22F | Makes it mandatory for the pharmacists to inform patients of generic equivalents of the prescribed drug |
| Section 22G | Made a provision for the introduction of the transparent pricing system for medicines based on single exit price |
| Section 22G(2) | Made provisions for regulation of dispensing fees and capping of logistics fees |
| Regulations Relating to a Transparent Pricing System for Medicines and Scheduled Substances, Medicines Act (No. 101 of 1965) | |
| Regulation 5(2)(e) | Made provisions for benchmarking of pharmaceutical (innovator products) prices internationally |
| Regulation 14(5) | Made provisions for use of pharmacoeconomic studies in support of price |
| Patents Act (No. 57 of 1978) | |
| Section 46(1) | Stipulates a duration for which a patent remains in force as 20 years |
| Section 69(A) | Provides for limitations to intellectual property by allowing registration of generics prior to patent expiry |
| Regulations in terms of the Medical Schemes Act (No. 131 of 1998) | |
| Regulation 8 | Makes a provision for implementation of cost-containment strategies such as the use of formularies and reference price lists |
Summary and Conclusion
Aligning the current legislative framework, recalibration of the enablers and drivers of health care, along with increased demand for pharmaceuticals has the potential to create opportunities for advancing the South African pharmaceutical manufacturing industry. Actions aimed at cutting-edge skills development in the face of the changing pharmaceutical landscape are urgently required. The development of a focused and effective sector strategic plan should encompass key stakeholders such as the national government, academia, pharmaceutical manufacturers, and the regulator. The realization of the right to health care and access to medicines in South Africa and elsewhere is contingent on adequate empowerment of the pharmaceutical workforce.
| Strengthen the teaching capability of academic institutions by e ecting dual appointments | |
|---|---|
| Rationale | There are considerable shortages of skilled academics with prior exposure to the pharmaceutical industry |
| Strategies and inputs | Allow placements of academics in industry and provide a platform for industry experts to spend time in academia |
| Opportunities and barriers implementation | Will facilitate knowledge transfer to students enabling them to be ready for their critical roles in industry |
| Stakeholders | Industry, government, academia, SETAs |
| Assist academic institutions with fi nancial resources and placements for WIL | |
| Rationale | WILs are a critical component of academic training aimed at adequately preparing students for employment |
| Strategies and inputs | Make SETAs a liaison between companies and training institutions; allow SETAs to fund the cost of logistics such as transport |
| Opportunities and barriers implementation | Obtaining access to the workplace is a key challenge for universities |
| Stakeholders | DHET, SETAs |
| Introduce modules on quality systems in undergraduate sciences curricula | |
| Rationale | The level of regulation the pharmaceutical industry warrants requires graduates with an appreciation for and understanding of quality systems |
| Strategies and inputs | Training institutions to introduce modules on topics such as ISO systems and total quality management |
| Opportunities and barriers implementation | Training in quality systems will assist industry to become globally competitive at the International Conference on Harmonization level |
| Stakeholders | DHET, SAPC, SACNSP, and providers of training in science, pharmacy, information technology, engineering, etc. |
| Strengthen regulatory systems through postgraduate specialization programs | |
| Rationale | Increase the pool of experts to strengthen regulatory authority operations |
| Strategies and inputs | Place pharmacists at the regulator for community service following academic internship |
| Opportunities and barriers implementation | The current pool of external experts that are used by the regulator are aging |
| Stakeholders | Regulatory Science Institute, MCC, SAPC |
DHET = Department of Higher Education and Training
MCC = Medicines Control Council
SACNSP = South African Council for Natural Scientific Professions
SAPC = South African Pharmacy Council
SETA = Sector Education and Training Authority
WIL = work integrated learning
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- 12South African Pharmacy Council. “Regulations Relating to the Practice of Pharmacy.” Pharmacy Act No. 53 of 1974. Updated 3 June 2002. https://www.mm3admin.co.za/documents/docmanager/0C43CA52-121E-4F58-B8F6-81F656F2FD17/00010723.pdf
- 13McCormick K. “The Qualifi ed Person.” In Quality, edited by K. McCormick. Pharmaceutical Engineering Series, volume 2. Butterworth-Heinemann, 2002.
- 14Gray, A., J. Riddin, and J. Jugathpal. “Health Care and Pharmacy Practice in South Africa.” Canadian Journal of Hospital Pharmacy 69, no. 1 (Jan-Feb 2016): 36–41.
- 15South African Pharmacy Council. “Registration of Pharmacy Technical Assistants and Pharmacy Technicians.” Pharmaciae 2, no. 1 (1st quarter 2015). http://pharmaciae.org.za/registration-of-pharmacy-technical-assistants-and-pharmacy-technicians
- 16South African Pharmacy Council. Board Notice 152 of 2014. “Pharmacy Act (53/1974) as Amended: Scopes of Practice and Qualifications for Specialist Pharmacists.” Green Gazette No. 38327 (12 December 2014). https://www.greengazette.co.za/notices/pharmacy-act-53-1974-as-amended-south-african-pharmacy-council-scopes-of-practice-and-qualificationsfor-specialist-pharmacists_20141212-GGN-38327-00152
