Prenatal Supplements Are Out Of Reach
as contractors pocket public’s billions
- Unscrupulous big pharmaceutical companies may have a hand is the rampant shortages of drugs in public health facilities
- A new early stock-out warning system announced by health department can only scratch the surface of the rot - firm measures are needed to stop cartel-like behavior of suppliers
- Underhand suppliers are taking advantage of broken and corrupt supply chain systems to claim payment for undelivered suppliers
- Pregnant women in several provinces can’t find prenatal supplements in clinics despite government spending R21.8 million to procure the supplements from suppliers
It has been a tough year for South Africa’s public health system, mostly due to massive drugs shortages. Despite the billions of rands being spent in procurement of pharmaceuticals, it is normal for state health facilities to lack various essential medicines including HIV/TB drugs, vaccines, insulin and prenatal supplements.
Various excuses and reasons have been advanced for the unavailability of drugs, but with official information shrouded in secrecy, it is difficult to establish the truth.
uSpiked has long suspected the underhand role of big pharmaceutical companies in creating ‘artificial shortages’ in order to extort higher prices from consumers. With the department finally admitting its inability to manage the crisis, there is urgent need to look deeper into the cartel-like tendencies of suppliers.
On Friday the health department announced plans to set up an early stock-out warning system that would show drug shortages before they happen. Drugs suppliers, via a new online system created in partnership with Clinton Health Access Initiative, will be required to provide frequent status reports about production pipelines. Companies tendering for pharmaceutical contracts would have to commit to supplying buffer stocks of drugs.
When announcing the launch of the system, the Department’s Deputy Director-General in-charge of health Dr. Anban Pillay mourned; “We experience the problem that orders are placed with suppliers but suppliers only deliver part of the order or not at all.”
Erroneously touted as ‘the first of its kind in the world’, the early monitoring system, if successful, would enhance reliable access to affordable essential medicines to millions of people. [Similar and cheaper systems have been in operation in some parts of the world for years - editor]
Take the case of pregnant women in need of prenatal vitamins. The supplements are proven to lower the risk of serious health issues affecting mothers and their unborn children such as anemia, preeclampsia and brain and spine birth defects.
For poor and pregnant women across the country, a super healthy diet is not guaranteed and it is likely that they will not get all the essential nutrients from food available to them. In such situations, prenatal supplements, which contain higher levels of iron, folic acid, calcium and biotin, offer a solid backup. But these have now become scarce commodities.
Folic acid is a vitamin B (B9) whose deficiency has medically been linked to neural tube defects such as anencephaly (severe underdevelopment of the brain), encephalocele (where brain tissues protrude out to the skin from an abnormal opening in the skull) spina bifida (an incomplete closure of the spinal cord and spinal column). Although mostly found in leafy green vegetables like kale and spinach and enriched grains and orange juice, for families living below the breadline (less than R800 a month), nutrition issues tend to take a back seat.
This reality could have motivated the department’s R21.8 million spend on Folic acid. Despite the expenditure, women seeking these vital prenatal supplements are now being turned away from government clinics and hospitals due to what the department calls ‘shortages’ of folic acid, vitamin B complex and iron. Civil society initiative, Stop Stock Outs, has published verified shortages of vitamin B complex, iron and folic acid among other drugs at public health facilities in several provinces.
This prompts the questions, why hasn’t the department reconsidered the contracts with the suppliers who have failed to deliver? why hasn’t any contractor been hauled to court for breach of contract? Before blaming all contractors for non-delivery, the department must first have its stock-recordings system in order.
When the issue of stock-outs was first raised in the middle of the year, it became clear that despite centralised procurement processes, the department lacks a similarly centralised stock-monitoring system. The department’s technocrats initially denied there being any shortages. In fact the only currently available data is the crowd-sourced one being operated by Stop Stock Outs.
Some unscrupulous suppliers have taken advantage of the broken monitoring system to submit invoices for supplies that may never be delivered. The various provincial depots are understaffed or not modernised.
Under Contract HP09-2014SD, two companies, Biotech Laboratories (Pty) Ltd and Be-Tabs Pharmaceutical (Pty) Ltd were awarded a two-year contract (ending July 31, 2016) by the Department of Health to supply folic acid and ferrous at a total cost of R21 832 449,00.
Biotech (Supplier Code VUV35) was awarded a R1 607 761 contract to supply a single supplement combining iron and folic acid called Vitaforce Ferovite, a product it does not own and therefore has no control over production.
Vitaforce Ferovite is a product of Pharma Natura, which was recently acquired by JSE-listed Ascendis Health Ltd. as part of its bulk acquisition of natural medicines companies. Ascendis has had close ties with biotechnology company Monsanto.
So, why is the department procuring the supplements from Biotech Laboratories, an Indian based third party, and not directly from the local manufacturer, Ascendis’ Pharma Natura?
As of April this year, Biotech Laboratories (Pty) Ltd through its Johannesburg-based satellite-trading house had contracts worth R331.87 million with the health department. This figure could now be more if the various recent contracts are factored in. The company lists its directors as Stewart Graham Barker of Fourways, Shadrack Kosea Mapetla of Kyalami, Ranthoyakgale Simon Morule of Pretoria, and Mumbai-based Jay Bharat Mehta, Nirav Shirish Mody, Pranabh Dinesh Mody and Pradeed Kumar Singh.
Supplier Code V4728, Be-Tabs Pharmaceuticals, won the bulk of the prenatal supplements contract valued at R20 224 688, to supply its own brand of 5mg folic tablets.
Be-Tabs Pharmaceuticals is a convoluted operation that would put any tender watcher in a dizzy spell. The company ‘was’ owned by one of the Indian pharmaceutical giants, Ranbaxy Laboratories. In 2014, Ranbaxy struck a $4 billion M&A (merger & acquisition) deal with yet another Indian giant, Sun Pharmaceuticals.
Ranbaxy, Be-Tabs and another collaborator, Sonke Pharmaceuticals, currently enjoy separate contracts with the Department of Health totaling a staggering R3.442 billion for supplying various drugs. This makes the entities the fourth largest contractor with the department, after Mylan (Pty) Ltd., (R4.197b), Aspen’s Pharmacare Ltd (R3.8941b) and Biovac Institute (R3.6245b).