Sandoz is expanding its production capacity at a plant in South Africa in anticipation of a new public health initiative to provide more drugs to citizens.
Carnie van der Linde, who oversees the Novartis ($NVS) generic unit in that country, told Engineering News that a plant in Gauteng will up its production capabilities 20% to 25%. The plant currently churns out about 400 million tablets and capsules a year. Van der Linde said Novartis wants to take advantage of a new National Health Insurance plan that is designed to improve access to South Africans and which will bid for drugs from companies.
While Sandoz does not make antiretrovirals there yet, van der Linde told the publication that the company is adding them to its portfolio and expects to have them available within two years to tap into that market. In fact, the country today awarded $667 million in contracts to a dozen companies to supply HIV drugs, Reuters reports. AIDS is the country's biggest health problem, and South Africa is trying to get more drugs to those who are infected. Winners included domestic companies such as Aspen Pharmacare and Adcock Ingram, as well as Abbott Laboratories ($ABT).
There is a lot of Big Pharma interest in South Africa, one of the most developed countries on the continent. Cipla and Lonza have both announced expansions there this year. But the country is not making it easy for outsiders to compete there. For example, South Africa recently issued a list of 70 medications that it will buy only if they are manufactured on the home turf in an effort to get more production and jobs there. Contracts for the drugs are estimated to be worth about $313 million.