The Pretoria High Court recently dismissed a pharmaceutical company’s application to review the Department of Health’s (DOH) decision to classify medicines for the purposes of assessing tender bids.    

The DOH awarded a tender to supply surfactants to treat Respiratory Distress Syndrome at public hospitals.  The tender bid invitation was based on two therapeutic classes, defined according to active ingredients with comparable therapeutic effects regardless of their molecular composition.   

An unsuccessful bidder challenged the tender award on the grounds that the South African Health Products Regulatory Authority (SAHPRA) enjoys the exclusive authority to classify medicines in terms of the Medicines and Related Substances Act, 1965.  The court had to determine whether the DOH acted outside the scope of its procurement powers when it classified medicines in the tender bid invitation.  

The court noted that SAHPRA’s principal function under the Medicines Act is to evaluate applications to register medicines.  The Medicines Act does not give SAHPRA a general power to classify medicines or empower it to classify medicines for public procurement purposes.  SAHPRA is only empowered to classify medicines for the purposes of the Medicines Act, and these purposes do not include public procurement.

Classifying goods into classes is intrinsic to the DOH’s procurement powers.  The court found that the DOH’s classification of surfactants according to therapeutic effects (and not molecular composition) was rational and reasonable because it prioritises what the medicine can treat rather than its molecular identity.  The DOH’s classification also encouraged competitive bidding and lower prices because more medicines have comparable therapeutic effects than comparable molecular identity.

The court added that even if its interpretation of the Medicines Act was incorrect and SAHPRA was empowered to classify medicines for public procurement purposes, that incidental power would not be exclusive to SAHPRA.  It would instead operate in parallel with the DOH’s intrinsic classification power, and so the DOH would be entitled to rely on its internal committees’ expertise without requiring SAPHRA’s approval.  

The DOH therefore acted within the scope of its procurement powers. The application was dismissed with costs.     

The case is Safeline Pharmaceuticals (Pty) Ltd v Director General National Department of Health and Others (48004/2021) [2024] ZAGPPHC 138 (13 February 2024).  

This blog was co-authored by Felix Le Roux, Trainee Associate.