SWAZIPHARM’S DEAL TO MANUFACTURE DRUGS

MBABANE – Despite ongoing issues with medication quality in public health facilities, a well-known local company is planning to manufacture drugs in Eswatini.

The aspiring manufacturer is Avapharm, a partnership between Swazipharm and India’s Mylan Laboratories, designed to set-up drug production in the country. The joint venture (JV) aims to start by producing HIV/AIDS treatment drugs. The Ministry of Health has committed to purchasing all necessary drugs from this partnership through a signed agreement.
However, an emergency clause allows government to source from alternative suppliers in the event of a shortage. Swazipharm and Mylan Laboratories are obliged to ensure Avapharm complies with World Health Organisation (WHO) guidelines for pharmaceutical manufacturing. According to WHO, production encompasses operations from material reception to finished product packaging.

Manufacturing

WHO’s good manufacturing practice (GMP) establishes a quality management framework to ensure products meet requisite standards for their intended use. GMP minimises risks like cross-contamination and mislabelling, emphasising patient safety and quality assurance through risk assessment. Investigations by Times Sunday reveal that the Ministry of Health granted Avapharm a contract to manufacture essential drugs for the country’s health system. The agreement involves Swazipharm partnering with Mylan to create Avapharm, responsible for drug production and distribution within Eswatini.

Mylan, whose business began with the acquisition of Matrix Laboratories in India, in 2007, entered a partnership with Swazipharm in 2016. The agreement was signed by representatives from Swazipharm, government, Mylan and the Royal Science and Technology Park (RSTP), including notable figures like Dr Simon Zwane and Prashant Deshpande. Although the manufacturing plant is yet to be established, Avapharm has been supplying government with antiretroviral drugs. As a major investment, government has granted several incentives, such as value added tax (VAT) and import duty exemptions.

Agreement

Principal Secretary Khanya Mabuza confirmed the contract awarded to the Swazipharm and Mylan partnership, stating that despite delays, the contract remains valid. Government continues to explore manufacturing partnerships and is reviewing the Avapharm agreement. A regulatory department within the Ministry of Health has been set- up to oversee drug manufacturing operations, with the Medicines Regulatory Unit (MRU) handling regulatory functions. Yet, challenges remain in implementing and overseeing the project.
An associate of Avapharm refrained from commenting on the company’s progress, directing enquiries to their Lawyer, Zweli Jele, who did not respond to questionnaires by this publication at the time of going to print.

Challenges

The partnership agreement grants Mylan the role of providing valuable technology and expertise, while Swazipharm funds and constructs the manufacturing facility. Government provides land for the facility aimed at producing HIV/AIDS-related drugs. Products are to be priced according to international benchmarks from organisations like Clinton Health Access Initiative (CHAI) and Management Sciences for Health (MSH). Minister of Health Mduduzi Matsebula underscored the supplier base challenges in a performance report, advocating for an expanded supplier network to mitigate reliability issues. He noted the need for procurement law amendments to address supplier prepayment demands.

While hurdles persist, the government’s efforts to establish domestic drug manufacturing mark a significant move towards addressing the health sector crisis, but certain observers are not sure whether the JV will have essential capacity to produce the quality drugs to meet WHO standards. However, it may be said in some quarters that the partnership with Mylan and Swazipharm is vital for ensuring a stable medication supply in Eswatini. This is despite the fact that Swazipharm has faced problems with government-supplied drugs, experiencing several recalls. The Times Sunday previously reported that Swazipharm Wholesalers was among those whose drugs were recalled due to issues like labelling non-compliance, even though no harm was reported from these products.

Defects

Inspections revealed drug units with concerning defects like dark spots, leading to recalls. This may change because of the JV, which involves a giant in drug manufacturing from India, one player in the pharmaceutical industry opined. Secondly, a source said it will be Avapharm, a different company, not Swazipharm that will be manufacturing and distributing the medical drugs. But, the mother company forming the JV is in the picture because it is the largest player in drug procurement.

The information on drug recalls was outlined in a report presented to Parliament, highlighting the ongoing need for stringent oversights in drug manufacturing and supply. Swazipharm has encountered numerous issues with the drugs supplied to government. Reports from last year indicated that a company supplied medical drugs for public use, which the Ministry of Health later recalled.

Drugs shortage

The Times SUNDAY previously disclosed that one of these companies is Swazipharm Wholesalers (Pty) Ltd, a long-time supplier of drugs in the country. Amid the nationwide medical drugs shortage, it emerged that Swazipharm’s drugs were recalled three times this year. The Ministry of Health recalled the drugs for varied reasons, but it can be disclosed that they removed them from shelves to prevent dispensing to the public. Other companies whose drugs were recalled include IT Solutions and Artemis. Government collectively ordered 59 514 units of drugs from these companies. However, by the time of the recall notice, only 17 513 units were available.

Clarity

This information is documented in the Ministry of Health’s report submitted to Parliament. Matsanjeni South Member of Parliament (MP) Sabelo Ndlangamandla moved a private motion for clarity regarding the recalled drugs, seconded by Somntongo MP Sandile Nxumalo. The report was delivered to Parliament by the Minister of Health, Matsebula. Swazipharm is among the suppliers summoned by the Public Accounts Committee (PAC), a parliamentary body that ensures accountability for public finance expenditure.

According to the PAC report, the recalled drugs were classified as class three, indicating they were unlikely to cause any adverse health reaction, but violated regulatory agency labelling or manufacturing laws. “There is no recorded harm to our clients,” the report stated. The ministry noted that the MRU relies on reports from Electronic Patient Record (EPR) and health facilities for any symptoms or adverse reactions resulting from medication consumption. Patients who consumed these medications were advised that the risk to future well-being is unknown, as no specific research was conducted in other countries about the effects of similar recalled products.

The report states that the recalled drugs had dark and black spots. Our research shows that Mylan’s business operations started in 2007, in India, beginning with the strategic acquisition of Matrix Laboratories Limited. This acquisition transformed Mylan overnight into one of the world’s largest manufacturers of active pharmaceutical ingredients (API).

Implementation

Mabuza highlighted that while the contract was signed several years ago, its validity and implementation are still under review, emphasising that despite delays, the contract has not been terminated. In response to enquiries regarding the future of drug manufacturing in Eswatini, PS Mabuza stated that government will continue to explore partnerships with manufacturers and review the agreement with Avapharm. He assured that progress has been made in securing a drug manufacturer within the country and that a regulatory department within the Ministry of Health has been established to oversee these operations.

Currently, the MRU of the Ministry of Health handles basic regulatory functions related to medical products. However, questions remain regarding the implementation of the drug manufacturing project and its ensuing oversight. In another development, Mylan, according to the agreement, contributes valuable technology, intellectual property and expertise, including manufacturing processes, technological specifications and design for the establishment and operation of drug production facilities.

In return, government agreed to provide land for constructing a manufacturing and packaging facility dedicated to producing HIV/AIDS-related products. Swazipharm is responsible for financing the entire construction and commissioning of the facility, while Mylan will provide technical support and facilitate skill development, training and regulatory compliance.
Additionally, the agreement states that the drugs produced will adhere to international price benchmarks, such as those set by the CHAI and the MSH.

Dwindling

In his introduction to the first-quarter performance report for the 2024/25 financial year, Minister of Health Matsebula highlighted the dwindling supplier base and significant challenges faced by the ministry. He stated that many current suppliers are unreliable, failing to meet delivery timelines and often communicating delays at the last minute. Matsebula stressed the need to broaden the supplier base to include manufacturers and wholesalers closer to Eswatini, to alleviate these problems. “We need to amend procurement laws to address supplier issues,” the minister stated. “Currently, suppliers demand deposits before processing orders, but our procurement laws only permit payments post-delivery. We must adjust these laws to resolve the ongoing drug shortage crisis.”

Matsebula also indicated that new suppliers, both local and international, will be added to enhance the supply chain’s reliability. These changes will allow government to negotiate better prices and access higher-quality products. While challenges remain, including concerns over procurement practices and regulatory oversight, the government’s efforts to establish a domestic drug manufacturing industry represent a significant move toward addressing the country’s growing health sector crisis.

Therefore, there are players in the health industry who believe that the partnership with Mylan Laboratories and Swazipharm could play a vital role in ensuring a more stable and sustainable supply of essential medications for Eswatini’s population. Others want to comment after they haveseen the manufacturing plant taking shape and the drugs being endorsed by WHO and the Ministry of Health.

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