The latest tender for the government's rollout of antiretroviral drugs was 53% cheaper than previously, even though the same 10 companies were awarded the contract, Health Minister Aaron Motsoaledi announced.
Motsoaledi conceded the government might have "made a mistake" when awarding the two-year tenders previously.
He said that instead of paying in excess of R8.8 billion for ARVs, the government would only be paying R4.8 billion over the next two years starting January 2011.
This represented a R4.7 billion saving over what the government had previously paid for rolling out the drugs.
"South Africa can now afford to treat twice as many people with the same amount of money," he told reporters in Pretoria.
"It is notable that these tender price reductions have been achieved through the same suppliers that are contracted in the current tender."
The minister said the 10 companies are Abbott, Adcock, Aurobindo, Cipla Medpro, MSD, Pharmacare, Sonke, Specpharm and Strides.
Asked why the same suppliers were able to provide ARVs at a lower cost, he replied: "Perhaps it was our mistake in government, perhaps we were sleeping."
He said he was not at this stage contemplating a "witch hunt" of suppliers because of the higher prices previously paid. Some of the suppliers had claimed that at lower prices there would be substantial job losses, he said.
"I called their bluff. There are more profits in pharmaceuticals than in oil. My message to pharmaceuticals is that they are in a sector that is very sensitive. They mustn't fish from our troubled waters."
He said the government hoped to replicate the success of cutting the cost of procuring ARVs when it focused on the tender process for tuberculosis drugs, vaccines and drugs for the treatment of diseases related to maternal and child health.
World Aids Day
He said that of the 4.8 million people tested in South Africa since World Aids Day on 1 December, at total of 905,000 (18%) were found to be HIV positive.
Highlighting the price differential in the ARV drugs, he said that 600mg of Efavirenz in tablet form cost the government R107.07 in 2008 when the previous tender was awarded. Under the new tender it would cost R39.22, which is 63% lower.
Another drug, 150mg of Lamivudine in tablet form cost the government R29.77 in 2008. It would now cost the government R18.22, a 39 percent drop in price.
A 200mg dose of Nevirapine tablets cost R31.53 in 2008. It would now cost R22.99, or 27% less.
There was a 65% drop in the price of 300mg of Tenofovir tablets from R155.60 to R54.82.
Comment could not immediately be obtained from the National Association of Pharmaceutical Manufacturers.
(Sapa, December 2010)