ARV Suppliers Placed in Business Rescue

Statement by Michele Clarke MP – DA Spokesperson on Health:

The Democratic Alliance (DA) has written to the Minister of Health, Dr Aaron Motshoaledi, regarding the placement of two contracted pharmaceutical suppliers, Barrs and Innovata, into business rescue in December, and their subsequent inability to meet critical medicine supply obligations to the Department of Health. These companies were contracted to supply essential HIV medication, placing the continuity of life-saving treatment for patients at risk.

We have further written to the Chairperson of the Portfolio Committee on Health, requesting that the Minister and the Department appear before Parliament as soon as it opens to account for the situation.

In August last year, Barrs and Innovata were awarded parts of the national tender to supply both one-monthly and three-monthly packs of the daily 3-in-1 antiretroviral pill taken by HIV patients, containing Tenofovir, Lamivudine, and Dolutegravir (TLD). The companies are subsidiaries of Avacare Health. According to the Department of Health, neither Avacare nor the two companies disclosed their business rescue status or their inability to meet contractual obligations to the Department.

This tender process was controversial from the outset, with several established pharmaceutical companies excluded, including Adcock Ingram, Cipla, and Sun Pharmaceuticals. The current crisis raises serious concerns about procurement oversight, supplier vetting, and risk management in the awarding of critical medicine contracts.

The Department has indicated that it has reached an agreement with Barrs to supply an alternative product, while Innovata has reportedly resumed production. However, Innovata suppliers have reportedly resumed production. The companies have reportedly accumulated more than R250 million in debt to suppliers, and according to the Department, both companies have failed to provide contracted stock of multiple items, including morphine powder, for which Barrs is the Department’s sole supplier.

The DA will continue to pursue full transparency and accountability in Parliament. Patients’ lives depend on a reliable, secure, and properly managed public healthcare supply system.