COSATU Urges Government to Favour Local Pharma Makers Amid Job Losses

The Congress of South African Trade Unions is calling for urgent reform of the local pharma procurement policy to prioritize domestic manufacturers and halt the erosion of pharmaceutical production capacity. This stance comes amid mounting evidence that two decades of favoring the lowest-cost foreign suppliers have hollowed out local value chains and left the health system vulnerable to global disruptions.

Reforming the Local Pharma Procurement Policy

COSATU argues that the government’s annual procurement budget should be leveraged to support local industry rather than simply minimizing immediate expenditure. The federation points to the Public Procurement Act’s weighted scoring system, which already allows authorities to balance price against local-content requirements and broad-based black economic empowerment criteria. Yet implementation has been inconsistent, resulting in a steady decline in state purchases of domestically produced medicines.

Job Losses and Enterprise Closures

Longitudinal data tracked by the union show that roughly 2,500 pharmaceutical manufacturing positions and nine enterprises disappeared over an 18-month period. These losses coincide directly with reduced government orders for locally made medicines. Average workers in the sector support between five and seven dependents, meaning each lost job amplifies pressure on urban households and public services. COSATU therefore urges decision-makers to treat the local pharma procurement policy as a strategic industrial tool rather than a narrow cost-control mechanism.

Ad

Supply Security and Broader Economic Effects

The union’s analysis draws on pandemic-era supply shocks to illustrate the risks of over-reliance on imports. It also references macroeconomic indicators such as sluggish growth and high unemployment to demonstrate how manufacturing contraction ripples through household support networks and tax revenues. A pending legal challenge from some provinces that seeks to weaken domestic-preference rules could further undermine these efforts if successful.

Path Forward for Health System Resilience

For health economics and outcomes research, these dynamics underscore the importance of embedding supply-security parameters and regional production multipliers into tender design and reimbursement decisions. The proposed National Health Insurance framework offers a potential avenue for centralized purchasing that could simultaneously manage manufacturer margins and sustain domestic output. Such an approach mirrors international practices that shield local industry while building export potential to neighboring markets.

COSATU’s intervention, detailed in coverage of the ongoing manufacturing crisis, reflects a broader recognition that procurement choices shape both public health security and long-term economic resilience. Strengthening the local pharma procurement policy therefore remains central to reversing job losses and restoring viability to South Africa’s pharmaceutical manufacturing base, as highlighted in discussions around Pharmaceutical Manufacturing Affordability as a Key to South Africa’s Local Production Goals and Boosting Africa Vaccine Manufacturing: A New Era of Local Production and Supply Security.