Sakeliga rejects Sahpra’s BEE conditions for medical products

Free medicine and thermometer image, public domain CC0 photo.

Sakeliga rejects the South African Health Products Regulatory Authority’s (Sahpra) proposed BEE conditions for the manufacture, import, prescribing and trading of health products and medical equipment. 

Sahpra’s plan to make BEE a prerequisite in the medical industry is contained in a new draft policy entitled “Broad-based Black Economic Empowerment Policy for Issuance of Licences”. The policy aims to “integrate all elements of B-BBEE (with) the issuing of licences… and permits” for health products and medical equipment. In effect, Sahpra intends to prohibit the supply of health products and medical equipment that do not meet BEE requirements. Such actions offer an alarming preview of the drastic consequences of an NHI system in which the state would have the entire medical supply chain under its control. 

The policy proposes two phases: Phase 1 makes it mandatory to submit a BEE certificate, without which Sahpra will refuse to grant licenses. Once Phase 1 is in place, Sahpra then wants to refuse the granting and renewal of licenses unless specific BEE levels are achieved and maintained (Phase 2). 

The BEE licensing of health products and equipment is a grim illustration of how BEE promotes the narrow interests of politicians, bureaucrats, and self-enriching intermediaries at the expense of the public. It is inevitable that the addition of BEE requirements – a measure with inherently no relevance for the effective supply of medical products – will lead to declines in the quality, affordability, and availability of medical products. The stifling effect will discourage both local and international operators. 

Sakeliga emphasises that it will oppose the draft policy inside and outside the courts. We consider it the duty of businesspeople to combat and undermine in every reasonable way such harm to the public’s economic and healthcare interests. It is untenable that BEE compliance become a condition for saving people’s lives, just as it is untenable to make it a condition for economic activity and public service in other fields. 

In addition to the implications for  medical care, it must be considered that Sahpra’s proposed BEE license requirements will also apply to animal health products, with adverse implications for, among others, the agricultural industry. 

The proposed licensing requirements are part of a larger trend to make economic activity subject to the state’s prior approval, in particular approval based on BEE. The cover-up method followed by Sahpra, namely a first phase aimed at seemingly innocent BEE reporting to pave the way for a second phase requiring BEE compliance, is part of a pattern that manifests itself in more or less explicit terms also repeated with other regulators. We see similar efforts in the financial services industry, the real estate industry, in decisions of the competition commission, the telecommunications industry, the agricultural industry on issues such as water, and more. In addition to all these issues, Sakeliga is already busy developing the legal groundwork and court applications, to which we will now add the proposed BEE licensing of health products. 

Sakeliga warns that the pattern of phasing in is taking hold with regulators in several areas and that businesspeople should be aware that requirements for BEE information collection are not merely benign. Rather, it forms the basis for comprehensive requirements for BEE compliance, with the threat that the state will withdraw its approval for one to do business if not done on the state’s terms. 

Sakeliga will write to Sahpra during the comment period. However, we will not limit our actions to Sahpra’s comment opportunity and reserve all rights to oppose by way of litigation and otherwise the implementation of BEE licenses for medical products. 

We emphasise that BEE licensing of health products will be harmful and encourage other organisations and the public to register their opposition to Sahpra. 

We invite businesspeople, enterprises and organisations who want to work with Sakeliga to oppose BEE licensing of health products – and in other areas – to approach us. 

Click here for the draft policy.