GROUNDUP: High court sets aside multibillion-rand ARV contracts over procurement irregularities

The high court has ruled that irregularities made parts of the Department of Health’s multibillion-rand ARV tender unlawful, ordering the department to reconsider the awards within 120 days. Current suppliers must continue deliveries to prevent shortages while the department investigates possible bid collusion and corrects scoring errors.

The national Department of Health has been ordered to reconsider the companies awarded “one of the largest and most significant tenders of its kind”.

Tenofovir, lamivudine and dolutegravir are arguably the three most important medicines in South Africa. They constitute the first-choice standard ARV regimen in the South African treatment guidelines for adults. Millions of South Africans take these three drugs, usually one pill every day. If there were to be stockouts of these medicines, it would potentially be life-threatening for many people.

The total tender for ARVs, which came into effect in December 2025, is worth R15.5-billion, of which R12.6-billion is for fixed-dose combinations of the drugs packed in one-month and three-month packages.

The tender was split between various pharmaceutical companies. Local manufacturer Cipla Medpro Manufacturing, which has a strong track record of supplying drugs in the market, did not receive an award to provide the one-month or three-month packs, and only scored three smaller awards worth R215-million.

Cipla, along with another unsuccessful bidder, Hetero Drugs South Africa, approached the Gauteng Division of the High Court in Pretoria. Cipla wanted some of the tender awards to be set aside, and Hetero wanted its own bid to be reconsidered.

In a judgment handed down this week, Acting Judge Graham Girdwood ruled that there had been several irregularities in the awards handed out for the one-month and three-month packs.

He set the awards aside, finding they were unlawful and unconstitutional, and directed the Department of Health to redo the split and award of the two items within 120 days. In the meantime, current suppliers would keep delivering to avoid a drug shortage.

The setting-aside will also only take effect 90 days after the department finalises the new awards, so that current suppliers keep delivering until the companies chosen in the redone award are ready.

In terms of his order, the adjudication scores for the manufacturers not implicated in any irregularity would not be affected by the review of the “splits” (to several companies) and overall awards.

The judge specifically ordered that the bids of Innovata Pharmaceuticals and Viatris Healthcare be excluded from reconsideration, because he found they had not qualified to pass the first stage of the bidding process.

He also said the final bid prices of Barrs Pharmaceuticals and Aurobindo Pharma had to be “restored to their pre-negotiation prices” insofar as they did not qualify for local manufacturing preference.

He ordered that the scores of Innovata and Barrs be adjusted because they had been given historically disadvantaged individual (HDI) points without proving the ownership they claimed.

Innovata and Barrs are subsidiaries of Avacare and went into business rescue in December 2025.