Meet SA’s Pharma Suppliers

We have established the total value of pharmaceutical contracts awarded to suppliers by the Department of Health, as published in April this year, to be R29,474,472,156 (R29.47 billion). Of this, 2.24% (R658.9 million) went to Contract No. HP12-2014LQ, which was for supply and delivery of pharmaceutical liquids, alcohol, ether, glycerin and methylated spirits.

uSpiked’s number crunchers and data processors have been busy deciphering the intricate data to find out who got a slice of the R658.9 million contract and how they did it. On the list are the usual suspects - the manufacturers, but also traders who we like to call ‘briefcase suppliers’.

We discovered the usual modus operandi of industry heavyweights such as JSE-listed Adcock Ingram Ltd that appears to have created a briefcase subsidiary designed to shield it from any liability. The pharmaceutical company trades with Department of Health as Adcock Ingram Healthcare (Pty) Ltd. Being a limited liability company, any shortfalls by Adcock Ingram Healthcare would not directly impact its parent company. But the devil is in the details.

Listed as directors of Adcock Ingram Healthcare (Pty) Ltd (Supplier Code V2272) are two top executives of Adcock Ingram Ltd – CEO Kevin Burman Wakford (55) and his deputy (and financial director), 53 years-old Andrew Gideon Hall. According to the contract, the company scored a total of 96 points out of the possible 100. Did Adcock Ingram Healthcare use the BBEE points obtained from the holding company that is technically not the tenderer for the awarded contract?

Legal experts we asked to look at the contracts all agreed that such bidders are within the law as per the called tenders, but raised the morality issue when manufacturers deliberately bid through subsidiaries.

In our examination, we found jewels in the form of ethical suppliers who care to deliver quality and affordable pharmaceutical products. Laljith Sunker Singh, 72, is the founder and sole director of Resmed Pharmaceuticals cc, a manufacturing company that he established in KwaZulu-Natal in 1988. Resmed recently started selling products in other African countries. Sunker tells us he has thrived through hard work and integrity. “We are driven by the benefits patients get by using our products, and not so much the lucrative contracts.”

Resmed Pharmaceuticals, Supplier VMS39, was granted 3% of the HP12-2014LQ tender. Below is the list of beneficiaries of this tender.

the shareholding of the HP12-2014LQ pie

1.    V4890 - Barrs Pharmaceuticals Industries (Pty) Ltd R161,217,703

Detailed information on the individuals behind this company is on an earlier report

2.    VBKK5 - Dismed Pharmaceuticals (Pty) Ltd R110,348,141

This Midrand-based company lists its directors as, 1976 Mujeeb Mahomed Shaffe Ebrahim (39), Marthinus Herman Lotz (54) and Merika Johannes Madungandaba (57)

3.    VZL63 – Safeline Pharmaceuticals (Pty) Ltd R67,679,734

Based in Pretoria, Safeline’s directors are registered as; Roberta Lynn Esakovitz (55), David John Frank (58), Nicolene Frank (57), Maduraimuthoo Kuppusamy Naidu (49), and Malani Naidu (45)

4.    V2205 – Pharmacare Limited R64,280,186

This is a briefcase company wholly owned by the JSE-listed Aspen Holdings Limited. Like Adcock Ingram Healthcare (Pty) Ltd., its usage in bidding for public contracts, technically shields Holding Corporation from direct liabilities.

5.    V2160 – Sanofi-Aventis South Africa (Pty) Ltd R.62,595,252

This is the local subsidiary of the French multinational pharmaceutical company known for its various research and developments in the industry. Its manufacturing plants are reported to be some of the best in the country and are often used by Medicines Control Council for training and testing.

6.    V3LA8 – Pharmachem Laboratories (Pty) Ltd R43,272,543

Registered in 2012, the company listing its directors as; Bashir Ahmed Carrim (57), Imtiaz Mohamed (49), Sangaaran Moodley (50), Arshad Bera (37) and Wanda Mpofu (age unknown)

7.    V2272 - Adcock Ingram Healthcare (Pty) Ltd R40,663,573

This is a subsidiary of JSE-listed holding company, Adcock Ingram Limited

8.    V2RX2 – Sanichem (Pty) Ltd. R35,900,974

This Durban-based company lists its directors as 1976 Neelan Soobiah Parumaul (39) and Melvinathan Soobiah Parumual (52)

9.    VMS39 – Resmed Pharmaceuticals cc R18,776,117

Manufacturer and supplier with a footprint in Africa

10. VBVW2 – Novartis South Africa (Pty) Ltd  R18,625,320

This is the local subsidiary of the Swiss multinational, International AG that was created in 1996 through the merger of Ciba-Geigy and Sandoz. At least all engagements with the department of health are not conducted via some briefcase outfits.

11. VBKY6 – Janssen Pharmaceutica (Pty) Ltd R18,542,038

This is the local arm of Johnson & Johnson

12. VCJF7 - Pharmaceutical Contractors (Pty) Ltd R10,240,020

The details of the company can be accessed in our earlier report

13. V2192 – Inova Pharmaceuticals (Pty) Ltd R3,437,559

This is the entity that locally handles products manufactured by Valeant Pharmaceuticals International Inc. Valeant’s products were contracted to Meda Pharma South Africa, which has German directors

14. V2PK3 – Noko Healthcare cc R1,404,853

Noko Healthcare, as mentioned in the earlier report, does not manufacture any of the products it supplies to the department. It’s sole director, Moses Sipho Mampuru, emailed us to protest what he called negative portrayal of his company.

He wrote: “I am responding to your article published on the 5/07/2015. I am an owner of NOKO HEALTHCARE. I have 14 year experience in the Pharmaceutical Industry. I worked for following companies: Adcock Ingram, Roche Pharmaceutical, Astra Zeneca, Bioclones, Pfizer and Caps. I am holding the following degrees: B.Sc (Med) (Unin); M.Sc (Med) (Wits); MBL (Unisa) and a certificate in marketing from Damelin. I have 20 Employees. I have offices in 2 Skietlood Street, Isando, Kempton Park. Our Phone is 086 111 1827. Our Fax is 086 635 7214. For you to write about me without checking with me leaves much to be desired. Please rectify what you did.” (sic)

In a telephone conversation with uSpiked’s editor, Mampuru claimed that our motive is to embarrass the minister for health. We maintain that the public has a right to know how tax money is spent. We also know that ministers, though being the political heads of the various departments, do not sit on tender committees.

Mampuru denied his company is a briefcase outfit, but admitted to sourcing from manufacturers. Noko Healthcare cc delivered the four items on its contract, but we must wonder how much of taxpayers’ money the department would have saved had it procured those items directly from Protea Chemicals.

15. VXZ32 - Cipla Medpro South Africa Limited  R897,990

Cipla lists its directors as 1976 Nishant Saxen (39) of Gurgaon India, James Paul Miller (51) of Constantia Western Cape, Simo Lincoln Masondo (41) of Kyalami Hill, Midrand and Abofele Bogosi Khoele (40)

16. V20D5 – Medivision (Pty) Ltd R573,516

Operating from Isando Extension 3, Gauteng, Medivision lists its directors as Vibha Desai (41) of Winchester Hills, Gauteng, Vikramkumar Naik (53) of Strathavon Gauteng, and Pria Anusha Pakkiri (50) of Milnerton, Western Cape.

17. V2177 - Roche Products (Pty) Ltd 430,920

Roche Products (Pty) Ltd is the pharmaceutical division of Roche South Africa whose parent company is Swiss multinational Roche Holding AG

18. V7149 - Mirren (Pty) Ltd R45,792

Directors at Mirren are Malcom Ryan Blane (47) of Midrand Gauteng, Lynton Mervyn Hilliard-Lomas (48) of Lifestyle Estate Midrand Gauteng, and Andrew James King (53) of Farramere, Gauteng

CLICK HERE to download the full product list contract No HP12-2014LQ.