With the International Monetary Fund (IMF) and the World Bank cutting South Africa’s economic growth forecast for 2016 to 0.7% and 0.8% respectively, if economic objectives are not met the country faces the risk of its sovereign credit rating being downgraded to junk status. CEO of Cipla Medpro – the third largest pharmaceutical manufacturer in South Africa, Paul Miller, explains why the leading pharmaceutical companies have a key role to play in the seemingly turbulent year ahead.
Top business leaders must work in partnership and with a common purpose with the State in each sector in its quest to further economic growth in the country. Significant foreign investment and job creation are key elements for businesses to focus on this year if we are going to grow the economy.
Cipla will continue to support the local economy through continued foreign investment. As a testament of Cipla’s commitment to improve healthcare in South Africa, Cipla Global invested 4.5 billion into the country as one of the biggest foreign direct investments into South Africa in 2013. In addition, a total of R400 million was invested into our local manufacturing facility.
As big players in the economy, the leading pharmaceutical organisations have a responsibility to contribute to economic growth, but must not lose sight of their primary responsibility to ensure access to affordable healthcare for consumers. The latest price increase approved for pharmaceuticals is 4.8%, but we hope that government would support an extra price increase later this year to cushion the pharmaceutical companies against the sharp slide in the rand, which has made imports more expensive.
In light of this it is essential for pharmaceutical manufacturers to invest and focus on their local manufacturing facilities in order to boost the production of local medication. Over the past few years, R400 million was invested into Cipla’s local manufacturing facility. The net effect was an increase in capacity from 20% to 100% with the main focus on HIV products.
Cipla hopes to assist in growing the economy further by continuing to invest in the manufacturing and distribution of medication. Another solution that will enable greater access to required medication for patients is if the Medicines Control Council approval process can be expedited.
Generic competition is also important to drive the costs of medication down in the country. In the generics market, prices typically don’t go up, they only come down and so greater investment into the development and distribution of generics and biosimilars will increase competition and will ultimately provide greater access to quality medicines at affordable prices.
In these tough times, it is vital for all of us to pull together as a nation and to work in collaboration with government in achieving its economic milestones for 2016. As a leading pharmaceutical manufacturer we often focus on advancing healthcare for all, but as an organisation Cipla also invests in advancing the economic wellbeing of all South Africans.