pharmaceutical manufacturers’ association of south africa
TRANSCRIPT
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2009 PPIIAASSAA SSeeccrreettaarriiaatt CCoonnttaacctt ddeettaaiillss
Switchboard +27 11 805 5100 [email protected] Chief Operating Officer Vicki Ehrich +27 11 265 2106 [email protected] Personal Assistant & Betsie von Wielligh +27 11 265 2101 [email protected] Office Administrator Head: Scientific and Kirti Narsai +27 11 265 2107 [email protected] Regulatory Affairs Scientific & Regulatory Christine Schoeman +27 11 265 2102 [email protected] Affairs Co-ordinator
Website: Physical Address:
Postal Address:
www.piasa.co.za
Thornhill Office Park, Building No 5, 94 Bekker Street, Vorna Valley, Midrand, 1686 PO Box 12123, Vorna Valley, 1686
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Table of contents
Association Profile
Mission, Values, Profile and Vision
Objectives and Modus Operandi
Structure and Secretariat Organograms
Executive Council and Management Council
PIASA Committee Structure
1-6 1 2 3 4 5
President and Chief Operating Officer’s Review Introduction and Summary
Priorities Government Affairs and Policy Transformation Medicines Regulatory Authority Health Outcomes Local Manufacture Communications SciTech Marketing
Membership
Staff
Thanks
7-11 7
8
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9
9
10
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10
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Committees to the Exco 12 - 18 Government Affairs and Policy 12
Transformation 14
Intellectual Property 15
Health Outcomes
Local Manufacture
Communications
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18
Standing Committees Committee for Science and Technology
Marketing Committee
19-24 19
24
Financial Report Annual Financial Statements
25-26 27-38
Past Presidents and Honorary Life Members 39-40
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Association Profile
The Pharmaceutical Industry Association of South Africa (PIASA) is a trade association of
companies involved in the manufacture and marketing of prescription medicines in South
Africa. The association promotes and safeguards the interests of its members vis-à-vis
government, business and other professional organisations. PIASA focuses on the
transformation and demands of the local healthcare environment.
Membership is voluntary and includes a broad representation of foreign multinational
pharmaceutical companies and local companies. PIASA‟s members currently supply
approximately 40% of the total pharmaceutical market in South Africa.
The members of PIASA aim to bring quality medicines to the South African market. PIASA
companies are important members of the South African business community, marketing
medicines, including both innovative and generic medicines, to the health professions. In
addition to promoting and safeguarding the interests of members, PIASA provides a service to
the public as well as the general medical and healthcare community.
Mission To sustain a favourable environment for the continued development of the
Pharmaceutical industry in South Africa as it strives to increase access to
quality medicines, with the ultimate aim of saving lives and improving the
quality of life for all South Africans.
Values Members of PIASA subscribe to the following values:
Respect for intellectual property rights
Commitment to good corporate governance
Commitment to the Code of Marketing Practice
Adherence to best practice in manufacturing, clinical research,
distribution and regulatory affairs
Profile Trade organisation with voluntary membership.
Members are drawn from research-based multinational pharmaceutical
companies operating in South Africa and local manufacturers of
pharmaceuticals.
22 members at December 2008.
PIASA represents South Africa internationally as a member of the
International Federation of Pharmaceutical Manufacturers and Associations
(IFPMA).
Vision Promoting the image, views and interests of the industry to a broad range of
audiences.
Carrying out business in such a way as to support the strategic national
health priorities of government.
Partnering with government in determining the best avenue for improving
access to quality medicines for all South Africans.
Maintaining close and regular contact with political opinion leaders,
government bodies and stakeholders in order to create a favourable
political and economic environment for our members.
1
Presenting a unified industry approach to the broader challenges of
healthcare in South Africa.
Working closely with government and other bodies in the development of
legislation relevant to the pharmaceutical industry - in an ethical and
responsible manner.
Working towards an appropriate regulatory environment and providing
technical advice and guidance.
Objectives Represent PIASA members and the industry in dealing with Government
with a view to providing constructive input and influencing legislation
and policy developments affecting the health sector for the ultimate
benefit of patients.
Liaise with funders of medical services in the private sector to address
issues that impact the industry.
Work with the medicines regulatory authority (MCC) in shaping strategic
issues of a regulatory nature relating to clinical trials and the registration
of medicines.
Be instrumental in assisting members with the implementation of Broad-
Based Black Economic Empowerment.
Keep members abreast of legal, scientific, technical, economic and
trade issues that impact them.
Provide relevant information and advice to members as appropriate.
Promote, support and oversee industry guidelines on the ethical
marketing of medicines to ensure compliance with the PIASA and
IFPMA Codes of Marketing Practice.
Modus Operandi The PIASA Executive Council is democratically elected annually and leads
the association in decision-making, providing strategic leadership and
determining policy. Elected from Exco is the Management Council which
is responsible for financial issues and administration.
The Science and Technology (SciTech) and Marketing Committees, two
expert committees, report to the Executive Council. During 2008 six
additional ad hoc committees dealt with the main issues of importance to
industry: Government Affairs and Policy, Transformation, Health Outcomes,
Intellectual Property, Local Manufacturing and Communications.
The numerous activities of PIASA are supported by a secretariat under the
leadership of the Chief Operating Officer, Vicki Ehrich, who reports to the
Executive Council.
2
2008 PIASA Structure
Management Council (elected) – financial & administrative matters Executive Council (elected) – strategic direction & leadership Strategic Committees to the Exco
2008 Secretariat Organogram
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Management Council
Executive Council
Intellectual Property
Transfor-mation
Government Affairs & Policy
Supported by the Secretariat
Science & Technology Committee (SciTech)
Marketing Committee
Communications
Local Manufacture
Health Outcomes
Chief Operating Officer Reports to Executive Council
Financial Function Contracted out
Head: Scientific and Regulatory Affairs
Scientific and Regulatory Affairs Coordinator
Personal Assistant & Office Administrator
Office Assistant
PIASA Executive Council
Elected August 2008
Ismet Amod Bioclones
Eric Reurts Novo Nordisk
Deon Vos Merck
Management Council Member President
Richard de Chastelain Bayer Schering Pharma
Guni Goolab AstraZeneca
Kobus Venter Janssen-Cilag
Jay Hooghuis Wyeth
Management Council Member Vice-President
Peter Lyons Abbott Laboratories
David Pritchard GlaxoSmithKline
The functioning of the Executive Council was supported by the COO, Vicki Ehrich and
the Head: Scientific & Regulatory Affairs, Maureen Kirkman (who retired December 2008)
Ashley Pearce Schering-Plough
Management Council Member Vice-President
Jonathan Louw Adcock Ingram
Management Council Member Vice-President
PIASA Committee Structure
The work of the executive team is complemented by the efforts of the wider membership
through various committees and the PIASA Secretariat. A great deal of time and resources is
spent on the most pressing industry issues and priority committees are formed to deal with
these. Exco offers strategic direction and leadership to the association.
Executive Council Members
The 2008/2009 PIASA Executive Council was elected at the Annual General Meeting held on
20 August 2008.
The following persons were elected to the 2008/9 Executive Council: Deon Vos (Merck),
Jonathan Louw (Adcock Ingram), Guni Goolab (AstraZeneca), Peter Lyons (Abbott), Richard
de Chastelain (Bayer HealthCare), David Pritchard (GlaxoSmithKline), Kobus Venter (Janssen-
Cilag), Eric Reurts (Novo-Nordisk), Ashley Pearce (Schering-Plough), Ismet Amod (Sekunjalo/
Bioclones) and Jay Hooghuis (Wyeth).
Management Council
PIASA‟s Management Council is responsible for financial and administrative matters. The
Management Council was elected by the Executive Council on 20 August 2008. Deon Vos
(Merck) was elected President. Jay Hooghuis (Wyeth), Jonathan Louw (Adcock Ingram) and
Ashley Pearce (Schering-Plough) were elected as Vice-Presidents.
Committees to the Exco PIASA‟s priority committees are structured to address the most pressing needs of industry and
are reviewed annually. Standing committees, SciTech and Marketing, continue as core to
the organisations‟s activities. Full reports on these committee activities are available from
page 12 this report.
Government Affairs & Policy - The primary task of the Government Affairs & Policy
Committee is to deal with public policy affecting the industry. Issues such as regulations
relating to the pricing of medicines are addressed by this Committee.
Transformation - The Transformation Committee leads and supports members in the
implementation of Broad-based Black Economic Empowerment. Intellectual Property - This group is responsible for safe-guarding members‟ interest in terms
of intellectual property matters, which are key to this industry. Health Outcomes - The Health Outcomes Committee addresses issues affecting the funding
of and access to medicines in the private sector with a focus on the interests of patients.
Local Manufacture - This Committee was formed during 2007 to promote the value to South
Africa of local manufacture of medicines and to address regulatory issues affecting these
interests.
Communications - Issues relating to the image of the industry and PIASA are the main focus
of the Communications Committee. This group aims to communicate the value of both
medicines and local industry investment to a broad audience.
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Science and Technology (SciTech)
SciTech acts in the interests of members on all scientific, regulatory, clinical and technical
matters. The activities of SciTech and its various sub-committees are reviewed annually in
order to address the most pressing issues and add more value to member companies in a
proactive manner.
Marketing Committee
The Marketing Committee is dedicated to the development of a regulated South African
Code of Marketing Practice and oversees the adherence to these principles by the
membership.
As a member of the International Federation of Pharmaceutical Manufacturers and Asso-
ciations, the committee upholds the standards of the IFPMA Code of Marketing Practice.
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Annual Review by the President and Chief Operating Officer
on behalf of the Executive Council
Introduction and Summary
The political environment offered new interest and challenges in 2008, following the African
National Congress meeting held in Polokwane in December 2007, which put the
implementation of a national health system firmly at the top of the ANC health agenda.
September 2008 marked a change in the leadership of the Department of Health with the
appointment, by President Kgalema Motlanthe, of Ms Barbara Hogan as Minister of Health,
ending nine years of leadership by Dr Manto Tshabalala Msimang.
PIASA‟s committees were structured to address the most pressing needs of industry, i.e.
Government Policy and Pricing; Transformation; Healthcare Funding; Communications; Local
Manufacturing; Intellectual Property while standing committees, SciTech and Marketing,
continued as core to the organisation‟s activities.
Key issues facing the industry, being the methodology on international benchmarking and
the Health Charter, remained unresolved during 2008. On the positive side, the successful
industry agreement on a marketing code of practice continued, with the refinement of the
code in preparation for submission to the Department of Health (DoH).
Much attention was given to the regulations on the pricing of medicines with most of the
work being done in an industry-collaborative manner through the Pharmaceutical Task
Group (PTG). The publication of a revised draft methodology for the benchmarking of
originator medicines in August 2008, led to the opening of discussions on the methodology
with the DoH, while legal counsel was engaged by IMSA and PIASA to advise on the legalities
of the benchmarking proposals. The concept of a social compact with government, as an
alternative access strategy, was raised for consideration by multinational companies late in
2008 and taken forward to 2009.
In the face of unacceptable delays in medicines registration, a highlight of the year was the
progress made towards a restructured medicines regulatory authority, which culminated in
the promulgation of the Medicines and Related Substances Amendment Act 2008, in April
2009. Extensive work with the Ministerial Task Team, led by Prof. Ronnie Green-Thompson,
and then presentations and submissions to the Portfolio Committee on Health, proved to be
successful in achieving a satisfactory outcome for the industry.
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Vicki Ehrich Chief Operating Officer
Ashley Pearce President
January to August
Deon Vos President
August to December
The Council of the International Federation of Pharmaceutical Manufacturers and
Associations (IFPMA), of which PIASA has been a member for the last two year period, was
rolled over for a further period to 2010. PIASA values its exposure to international industry
affairs through this body.
Priority issues A very short synopsis of the most important issues dealt with by the priority and standing
committees follows:
Government Affairs and Policy
The work on pricing was undertaken largely within the Pharmaceutical task Group (PTG),
which included IMSA, NAPW, PHARMISA, PIASA and SMASA.
Annual increases in the SEP - Following a delay in the implementation of the regulations on
price increases by the DoH, a 6,5% increase was granted with affect July 2008.
With price increases still lagging behind the CPI and manufacturers experiencing the strain
of a declining exchange rate, pressure by some sectors of the industry resulted in a further
call by DoH for comment on the annual review of the single exit price of medicines in
August 2008. Two submissions were made through the PTG on 10 November. The first
submission was based on the „established methodology‟ including CPI and exchange rate
and the second was a request for an extra-ordinary increase in response to extreme
exchange rate shifts.
Industry welcomed the resulting announcement by the Department of Health of an
increase of 13.2% in the single exit price on 24 December 2008, effective from January 2009.
No extra-ordinary price increase was granted.
Benchmark pricing - In response to a call for comment on a draft methodology for
benchmarking of originator medicine prices, published in August 2008, the PTG submitted
comments by due date i.e. 29 September 2008.
Discussions on the methodology were opened through a meeting with Dr Anban Pillay,
Cluster Manager: Financial Planning & Health Economics on 31 October, who agreed to
work with industry and to address each issue of concern during which period a final
methodology would not be published.
Legal counsel was engaged by IMSA and PIASA to advise on the legalities of the
benchmarking proposals.
The concept of a social compact, whereby pharmaceutical companies would make a
contribution to a Public Sector Capacity Building Fund, based on an agreed percentage of
sales, was raised as a possible model for discussion with government in 2009.
Industrial Policy – In order to respond to the government‟s National Industrial Policy
Framework and the supporting Industrial Policy Action Plan, a grouping of the industry
associations (PSTF) was formed. This group undertook relevant research and made a
presentation to Dr Matona, the DG of dti, in April 2008.
Although our efforts have been towards broadening the agenda, the industrial policy focus
remains on local manufacture and in particular that of ARVs.
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Transformation
Following a meeting of stakeholders convened by the DoH in February 2008, the Health
Charter was not progressed and the healthcare industry remains subject to the dti B-BBEE
codes.
The Transformation Committee embarked on a support programme for members in terms of
the implementation of BEE. Two successful workshops were run in 2008, the first on the
verification process, and the second covered preferential procurement and enterprise
development.
To take the B-BBEE process forward, a baseline study amongst PIASA members will be done in
2009, in order to plan how best to support the membership with BEE implementation.
Members are being encouraged to move towards a company rating in 2009.
Intellectual Property
PIASA‟s Intellectual Property Committee co-operated with IMSA to address the issues of data
exclusivity and patent term restoration. On the basis of the lobbying done, it appears that
potential success on either issue is limited. PIASA continues to work with IMSA on these issues,
which, as policy matters, need to be taken to ministerial level.
Medicines Regulatory Authority
PIASA successfully engaged in extensive lobbying of the Department of Health, the Portfolio
Committee on Health and other role players, following the publication of the Medicines and
Related Substances Amendment Bill in 2008. The Bill incorporated some recommendations on
the dissolution of the MCC and the restructuring the medicines regulatory authority as
proposed in the Report by the Ministerial Task Team, but also included unacceptable
proposals giving the Minister of Health the power of final decision on approval of the
registration of medicines which was unacceptable to the industry.
Health Outcomes
Health Economics - A successful workshop dealing with health economics as well as
pharmacoeconomics was held in October 2008 with Professor Nick Freemantle of Birmingham
University in the United Kingdom as the keynote presenter and with other eminent local
academics as speakers.
Benefit Design - Discovery‟s notice to members that they intended to de-list certain products
from their Chronic Illness Benefit Formulary for 2009 because they were no longer
competitively priced, was strongly opposed by PIASA. No resolution could be reached with
Discovery on this issue.
Exemption from Competition Act - PIASA challenged the Board of Healthcare Funders (BHF)
application to the Competition Commission for an exemption from the Competition Act. The
application is unlikely to succeed but we have received no official response.
Local Manufacture
Issues of relevance to local manufacturers were addressed. Comments on a proposal for the
local production of APIs (Active Pharmaceutical Ingredients) and proposed tax incentives for
local manufacture were submitted.
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Communications
Advantage was taken of all opportunities for exposure by responding to major issues,
presenting PIASA‟s position widely and participating in relevant forums. PIASA extended its
online media subscription, free of charge, to members via a daily media newsletter. A very
successful update and briefing session for PIASA members was held on 6 November 2008.
SciTech
Medicines Regulatory Authority – PIASA successfully engaged in extensive lobbying of the
Department of Health, the Portfolio Committee on Health and other role-players, following
the publication of the Medicines and Related Substances Amendment Bill in 2008. The Bill
incorporated recommendations on the dissolution of the MCC and the restructuring of the
medicines regulatory authority as proposed in the Report by the Ministerial Task Team, but
also included proposals giving the Minister of Health the power of final decision on approval
of the registration of medicines, which was unacceptable to the industry.
The extensive effort put into submissions and presentations to the Portfolio Committee led to a
satisfactory outcome with the promulgation of the amended act in 2009.
Clinical Research - the initiative to build capacity for clinical researchers and support staff by
providing training in current Good Clinical Practice was halted through a lack of commitment
from Academia which was necessary for the project to succeed. Work with the heads of
research of academic institutions continued. Promotion of South Africa as a centre of
excellence and choice for clinical research continued during 2008 in conjunction with the
prestigious Academy of Science of South Africa.
Marketing
Although pharmaceutical companies and other industry players agreed on a common code
of marketing practice in December 2007, compliance can only be enforced once the Code
has been published by the Department of Health in the Government Gazette. The final
agreed industry version of the SA Marketing Code for medicines was presented to the
Department of Health in 2008 together with a list of legal gaps which must be addressed in
legislation. It is expected that the Department will publish the Marketing Code for public
comment and then in its final form during 2009.
Membership
The PIASA Articles of Association were amended to: expand the Management Council from 3
to 4 members; to allow for a three calendar month liability of member subscriptions from the
date of resignation (previously subscription fees were forfeited); and to refund any
subscription amount paid in excess of this obligation within 30 days.
Nycomed and Genop resigned from PIASA during 2008. Thus at the end of 2008, PIASA
represented 22 members (20 multinationals and 2 local companies).
At the Annual General Meeting held on 20 August 2008, an 8% member subscription increase
was accepted for 2009.
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Staff
It was with regret that we had to bid farewell to Maureen Kirkman, Head: Scientific and
Regulatory Affairs, who retired at end December after 11 years of service.
Kirti Narsai was appointed the new Head: Scientific and Regulatory Affairs in October 2008.
Thanks
PIASA thanks members of the Executive Council, the Management Council and the various
Standing Committees and Committees to the Exco for their commitment, support and
dedication to the affairs of PIASA. A special word of appreciation is extended to those
member companies and their employees who participated so willingly in the activities of the
Association during the year.
We also thank our staff at the PIASA Secretariat for another year of hard work.
Details on the PIASA finances can be found under the Financial Report on page 25.
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Committees to the Exco
Government Affairs and Policy
The Government Affairs and Policy Committee, chaired by Ashley Pearce, dealt mainly with
regulation relating to the pricing of medicines, in particular benchmark pricing and price
increases. Much of the work on pricing matters was done though the Pharmaceutical Task
Group (PTG)1, a grouping which includes multinational, generic and self-medication interests.
The PTG made constructive proposals and developed submissions in response to legislative
issues, supported by face-to-face presentations when possible.
Pricing of Medicines
Annual increases in the Single Exit Price (SEP)
According to the regulations on the pricing of medicines, it was intended that the price of
medicines would be reviewed annually with a view to a price increase. Since the
introduction of the SEP, this annual review of prices has not taken place regularly and resulted
in a significant lag in the single exit price versus inflation and the exchange rate. This
situation created much frustration for the membership.
Only two increases had been announced since the introduction of the SEP pricing system in
2004. The first increase of 5,2% was granted in 2006 for implementation between January and
June 2007 and a further increase of 6.5% was published in Government Gazette 30901 on
27 March 2008, for implementation from 1 July 2008.
Following a call for comment on the annual review of the single exit price of medicines and
scheduled substances, published in Government Gazette no 31327 on 11 August 2008, two
submissions were made through the PTG on 10 November. The first submission was based on
the „established methodology‟ including CPI and exchange rate and the second was a
request for an extra-ordinary increase in response to extreme exchange rate shifts.
Industry welcomed the resulting announcement by the Department of Health of a third price
increase of 13.2% in the single exit price on 24 December 2008, effective from January 2009.
SEP (Single Exit Price) Temporary Reductions – It is understood that the intended purpose of
the SEP temporary price reduction regulation is to allow companies to sell short-dated stock.
The pharmaceutical industry has found the current system to be unsatisfactory and open to
abuse. To date the matter is unresolved and efforts to deal with the issue will continue during
2009.
International Benchmarking – Private Sector Medicine Prices
Since the publication of the draft methodology on benchmarking in December 2006, the
matter remains unresolved.
In response to a call for comment on a draft methodology for benchmarking of originator
medicine prices, published in Government Gazette No. 31369, 29 August 2008, PTG submitted
comments by due date i.e. 29 September 2008. Objections raised centred on the arbitrary
consequences of the application of the „lowest price‟ methodology; benchmarking against
the lowest price rather than the average and South Africa in the basket. Concerns relating to
the treatment of the exchange rate and the understanding of benchmarking as a „once-off‟
process were also addressed.
________________________________________________________________________________________________________________________
1. Innovative Medicines SA (IMSA), Self-Medication Manufacturers Association of SA (SMASA), National Association of
Pharmaceutical Manufacturers (NAPM), PHARMISA Pharmaceuticals Made in South Africa.
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Discussions on the methodology were opened through a meeting with Dr Anban Pillay,
Cluster Manager: Financial Planning & Health Economics on 31 October. Dr Pillay agreed to
work with industry and to address each issue of concern during which period, by agreement,
a final methodology would not be published.
Legal counsel was engaged by IMSA and PIASA to advise on the legalities of the bench-
marking proposals.
Social Compact
An alternative to benchmarking of medicines prices, with a possible greater contribution to
the government objectives of increasing access, was considered by IMSA and PIASA during
December. The concept of a social compact, whereby pharmaceutical companies would
make a contribution to a Public Sector Capacity Building Fund, based on an agreed
percentage of sales, was raised as a possible model for discussion with government in 2009.
Logistics fee A joint response to a call for comment on an appropriate logistics fee for medicines and
scheduled substances (Government Gazettes 31357 of 25 August 2008 and 31404 of 12
September 2008) was submitted on 8 December 2008 by IMSA, PIASA and SMASA. A separate
submission was made by Adcock Ingram at their request. The focus of the recommendations
was on the calculation of the logistics fees and the elimination of perversities.
At year-end, the logistics fee issue remained unresolved as did the dispensing fee on
medicines.
Industrial Policy
A National Industrial Policy Framework with a supporting Industrial Policy Action Plan (IPAP)
was adopted by Cabinet in June 2007. A tri-lateral task team of the DoH, Treasury and dti
was intended to oversee the project.
In order to respond to this policy, the PSTF (Pharmaceutical Sector Task Force) comprising
PIASA, IMSA, NAPM and PHARMISA was formed. A presentation outlining industry‟s views and
concerns relating to the balancing of Industrial Policy and Health Policy was presented to
Dr Matona, the Director General of the dti on 22 April 2008.
PIASA‟s response to the invitation from the dti for comments on a local active
pharmaceutical ingredients manufacturing facility was submitted to Andre Kudlinski (dti) on
21 July 2008.
In September 2008, dti requested comment on draft tax incentives for industry. PIASA
commented on these proposals on 5 September 2008. The final plan relating to these tax
incentives was scheduled for publication in January 2009.
Summary of important dates: 27 March 2008 - Notice of 6.5% price increase in the single exit price published in Government Gazette
30901.
22 April 2008 - PTG Presentation on National Industrial Policy to dti
1 July 2008 - 6,5% single exit price increase became effective.
21 July 2008 - PIASA submission on local manufacture of APIs proposal / Dr Walwyn
11 August 2008 - Request for comment on the annual review of the single exit price of medicines
published in Government Gazette 31327.
22 August 2008 - PTG meeting with Dr Pillay on logistics Fee, benchmarking, annual price increase and
the single exit price.
25 August 2008 - Request for comment on the determination of an appropriate logistics fee -
Government Gazette 31357.
29 August 2008 - Request for comment on the methodology for international benchmarking published
in Government Gazette no 31369.
5 September 2008 - PIASA submission on tax incentives for industry
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12 September 2008 - 2nd invitation for comment on the determination of an appropriate logistic fee for
medicines and scheduled substances was published in Government Gazette
31404.
29 September 2008 - PTG submission on the methodology for international benchmarking – response
to Government Gazette 31369 dated 29 August 2008.
31 October 2008 - PTG representatives met with Dr Anban Pillay to address industry concerns with
the draft methodology on international benchmarking.
10 November 2008 - PTG submission on the annual price increase in the single exit price.
10 November 2008 - PTG request for urgent relief due to severe exchange rate shifts.
11 November 2008 - PTG meeting with Director General of Health on benchmarking
8 December 2008 - IMSA, PIASA & SMASA response to request for comment on the determination of
an appropriate logistics fee - Government Gazette 31357.
24 December 2008 - 3rd price increase of 13.2% published in Government Gazette 31735.
Committee Members (August 2008 – August 2009): Ashley Pearce (Schering-Plough) – Chairperson, Kuben Pillay
(Adcock Ingram), Guni Goolab (AstraZeneca), Saras Rosin (AstraZeneca), David Pritchard (GlaxoSmithKline), Elvis
Mokoena (GlaxoSmithKline), Eric Reurts (Novo Nordisk), Sudier Ramparsad (Bristol-Myers Squibb) and Vicki Ehrich
(PIASA).
Committee Members (May 2007 – August 2008): Ashley Pearce (Schering-Plough) – Chairperson, Kuben Pillay
(Adcock Ingram), Guni Goolab (AstraZeneca), Saras Rosin (AstraZeneca), Karim El-Alaoui (GlaxoSmithKline), Elvis
Mokoena (GlaxoSmithKline), Eric Reurts (Novo Nordisk) and Vicki Ehrich (PIASA).
Transformation
The Health Charter and the dti B-BBEE Codes
The negotiation of the Health Charter, a government-led initiative seeking to transform the
healthcare sector in terms of Broad-Based Black Economic Empowerment (B-BBEE)
principles, neared its final stages of negotiation between stakeholders and the DoH early in
2007. Signing of the Charter was, however, delayed because of intervention by labour and
civil society resulting in a referral to Nedlac.
A Health Charter Stakeholders meeting, facilitated by the DoH, was held on 14 February
2008 to discuss Draft No 14 of the Health Charter. Issues relating to a Transformation Charter,
Procurement, National Health Insurance and the Public Health Enhancement Fund were
addressed.
PIASA‟s Transformation Committee, led by Guni Goolab, dealt with priority issues for the
multinational pharmaceutical industry throughout i.e.: ownership, preferential procurement
and the BEE scorecard through comprehensive submissions, discussions and negotiations.
In the absence of any further progress on the Health Charter, members are now subject to
the dti B-BBEE Codes.
PIASA Member Companies commit to B-BBEE
Late in 2007, PIASA members committed themselves to embrace transformation and
agreed to establish a consolidated PIASA base line and targets for the short and medium
term, as a start towards BEE implementation in their companies.
The transformation committee embarked on a support programme for members in terms of
the implementation of BEE, which had the interviewing and assessment of rating agencies
as a first step.
Two successful workshops were run by the Transformation Committee in 2008 i.e.:
- 11 June 2008, a workshop on the verification process, led by Loyiso Majija of
EmpowerLogic
- 25 November 2008, a workshop covering preferential procurement and enterprise
development, run by Robin Woolley of Transcend Corporate Advisors.
Both workshops were very well attended.
14
To take the B-BBEE process further, a baseline study amongst PIASA members is planned for
2009. It is intended to establish the progress made by members in the transformation process
and to understand their needs, in order to plan how best to support the membership with BEE
implementation.
PIASA companies are being encouraged to complete their BEE ratings by the end of 2009.
Summary of important dates: 14 February 2008 - DoH/Health Charter Stakeholders meeting
11 June 2008 - PIASA Workshop: Verification Process, Loyiso Majija, EmpowerLogic
25 November 2008 - PIASA Workshop: Preferential Procurement and Enterprise Development, Robin
Woolley, Transcend
Committee Members (August 2008 – August 2009): Guni Goolab (AstraZeneca) – Chairperson, Buhle Moyo
(AstraZeneca), Simangele Manana (Bristol-Myers Squibb), Jenny Wright (Galderma), Precious Maeteletsa
(Galderma), Roger Crawford (Johnson & Johnson), Godwin Jacob (Merck), Lebo Duwo (Novo Nordisk), Gwen
Rapetsoa (Solvay Pharma), Ashley Pearce (Schering-Plough), Nusreen Khan (Wyeth), and Vicki Ehrich (PIASA).
Committee Members (May 2007 – August 2008: Dhiren Mehta (Sekunjalo Healthcare) – Chairperson, Tryphina
Moleke (Altana Madaus), Guni Goolab (AstraZeneca), Buhle Moyo (AstraZeneca), Mojaki Mosia (Adcock Ingram),
Karim El-Alaoui (GlaxoSmithKline), Rita Mokone (GlaxoSmithKline), Jenny Wright (Galderma), Roger Crawford
(Johnson & Johnson), Godwin Jacob (Merck), Lebo Duwo (Novo Nordisk), Gwen Rapetsoa (Solvay Pharma), Ashley
Pearce (Schering-Plough), Nusreen Khan (Wyeth) and Vicki Ehrich (PIASA).
Intellectual Property
In 2008, an independent committee was established to deal with intellectual property issues
separate from the PIASA Regulatory and Clinical Committee, under which these matters had
previously fallen.
PIASA and IMSA committed to co-operate on relevant intellectual property matters and
various meetings were held during the year.
IMSA, led by Jim Ringer of Lilly, was committed to pursuing data exclusivity as their priority
issue while PIASA has been more involved in and committed to patent term restoration.
Discussions on these IP issues were held during the year with Mandisa Hela, registrar of the
MCC and MacDonald Netshitenzhe of the dti. At a meeting organized by IMSA and
attended by PhRMA representatives (Pharmaceutical Research and Manufacturers of
America), Mandisa Hela suggested that as intellectual property was a policy issue, the matter
should be addressed at ministerial level. She recommended that a policy submission be
made to the Ministers of Health and dti.
The likelihood of success on either issue is considered to be limited and although PIASA
continues to work on these issues and support IMSA‟s efforts, this is not a high priority issue for
PIASA at present.
Committee Members (August 2008 – August 2009): Peter Lyons (Abbott Laboratories) – Chairperson, Jay Hooghuis
(Wyeth), Kobus Venter (Janssen-Cilag) and Vicki Ehrich (PIASA).
Health Outcomes
Several issues affecting the funding of and access to medicines were addressed by the
Health Outcomes Committee (HOC).
15
Exemption from Competition Act
The Board of Healthcare Funders (BHF) filed an application to the Competition Commission
for an exemption from the Competition Act - on behalf of medical schemes. It included
some reference to exemption in relation to collective bargaining on medicines.
Exemption would permit BHF members to: eliminate and/or unduly restrict the switching of
members between schemes, standardise the interpretations of prescriber minimum benefits,
undertake forensic investigations against over-servicing, share cost and price information,
collectively bargain with manufacturers of medical devices, medicines and providers of
healthcare services.
PIASA approached WWB Attorneys to submit a response in opposition to BHF‟s exemption
application. The response to the Competition Commission objecting to the BHF application
for exemption was submitted on 25 March 2008. This was followed by a presentation to the
Competition Commission on 28 May 2008.
Meetings have taken place between major stakeholders and PIASA to discuss interaction
between the pharmaceutical industry and the medical schemes industry, the changes to
benefit design options of different schemes, access to innovative treatments and the impact
of co-payments on patients.
Benefit Design
PIASA reacted strongly to Discovery‟s notice that they intended to de-list certain products
from their Chronic Illness Benefit Formulary for 2009 because they were no longer
competitively priced. Discovery would only include these products if they were sold at a
“target price” which is below the single exit price.
A meeting took place with Dr Broomberg from Discovery, after advice was obtained from
WWB attorneys, on our concerns relating to dictating the prescribing of medicines and to the
lack of transparency. No resolution was achieved.
PIASA and IMSA are working together on this issue. A study is being done and legal advice
will be obtained for our arguments against Discovery.
The Discovery formulary was announced in September 2008 for implementation in 2009. The
issues were discussed with the Council for Medical Schemes since the identification of PMB‟s
and the Standard Treatment Guidelines and Essential Medicine List form the basis of
treatment for which medical schemes must provide without additional co-payment. The
PMBs and Therapeutic Algorithms are being revised and PIASA was invited to participate in
the exercise.
Health Economics (HEAT)
The Health Economics Assessment Team (HEAT), formed in 2007 to develop a health
evaluation mechanism that would be robust and comply with best global practices,
organized a Pharmacoeconomics Workshop which took place on 16 and 17 October 2008.
The Pharmacoeconomics workshop was successful with excellent speakers and has
enhanced PIASA‟s reputation for holding high quality Workshops to the benefit of all
stakeholders in the pharmaceutical and related industries and in academia. The keynote
speaker was Prof Nick Freemantle from the University of Birmingham of the United Kingdom,
who made a tremendous contribution to the success of the Workshop. Some very interesting
presentations were given by other local academics and experts.
16
Topics covered:
International experience and current status
Review of prescribed minimum benefits and impact on access to medicines
Budget impact vs. affordability
Appropriateness of conducting economic models extrapolating from clinical data
Critical appraisal of EBM as an input to pharmacoeconomic studies
Impact of National Health Insurance proposals on the private sector
Exploring the inter-relationships between Pharmacoeconomics and health outcomes
Measurement of health outcomes to estimate cost effectiveness of interventions
Economic evaluations: public sector vs. Private sector vs. international with special
emphasis on thresholds
Emerging regulatory crisis on safety of medicines: will this lead to inefficient decision
making?
Practical evaluations of pharmacoeconomic studies in SA Market.
An approach was made by the PCMA to work together with PIASA‟s HEAT Committee and
the South African chapter of ISPOR to hold a joint pharmacoeconomics conference in future.
This will be discussed in 2009.
Summary of important dates: 16 August 2007 - BHF application to the Competition Commission for exemption from the Competition Act.
25 March 2008 - PIASA‟s objection to BHF‟s exemption application submitted to the Competition
Commission.
28 May 2008 - Presentation to Competition Commission objecting to BHF exemption application.
16 & 17 Oct - Pharmacoeconomics workshop.
Committee Members (August 2008 – August 2009): Jay Hooghuis (Wyeth) - Chairperson, Saras Rosin (AstraZeneca),
Richard de Chastelain (Bayer Schering), Sohana Sukhnandan (GlaxoSmithKline), Kobus Venter (Janssen-Cilag), Tom
Molokoane (Abbott Laboratories), Gerdi Strydom (Wyeth), Lindiwe Pemba (Novo Nordisk) and Maureen Kirkman
(PIASA).
Committee Members (May 2007 – August 2008): Jay Hooghuis (Wyeth) - Chairperson, Saras Rosin (AstraZeneca),
Richard de Chastelain (Bayer Schering), Coen van Tonder (GlaxoSmithKline), Derrick Ferreira (GlaxoSmithKline),
Kobus Venter (Janssen-Cilag), Ralph Klingmann (Solvay Pharmaceuticals) and Maureen Kirkman (PIASA).
Local Manufacture
Two meetings were held during the year of this group, which is intended to address the issues
of local manufacturers within the PIASA fold.
This group, on 21st July, submitted comments at the invitation of the dti, in response to the
paper on the local production of APIs (Active Pharmaceutical Ingredients). Concerns were
raised relating to the potential viability of such a project in a market as small as South Africa,
amongst other comments. It was also mentioned that South Africa would be competing
against well established API manufacturers with low cost bases and high volumes, therefore
decreasing export potential. No formal feedback has been received from dti on the matter.
Comments were also made on proposed tax incentives for local manufacture and the need
to co-ordinate tax incentives with SARS.
In September 2008, dti requested comment on draft tax incentives for industry. PIASA
commented on these proposals on 5 September 2008. The final plan relating to these tax
incentives was scheduled for publication in January 2009.
Committee Members (August 2008 – August 2009): Kuben Pillay (Adcock Ingram) - Chairperson, Jonathan Louw
(Adcock Ingram) Mahendra Chibabhai ( Adcock Ingram), Bernie McDowall (Merck), Ismet Amod (Bioclones), Rob
McDavid (GlaxoSmithKline) and Vicki Ehrich (PIASA).
Committee Members (May 2007 – August 2008): Jonathan Louw (Adcock Ingram) – Chairperson, Kuben Pillay
(Adcock Ingram), Mahendra Chibabhai ( Adcock Ingram), Bernie McDowall (Merck), Dhiren Mehta (Sekpharma),
Maidev Maharaj (Sekpharma) and Vicki Ehrich (PIASA)
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Communications
Activities within this group focussed on promoting the image of both the industry and the
Association and communicating with members and key stakeholders. PIASA took advantage
of opportunities for exposure by responding to major issues, presenting PIASA‟s position widely
and participating in relevant forums.
Media Monitoring
PIASA subscribes to an online media monitoring service, monitoring over 60 000 global
sources. As part of PIASA‟s services to members PIASA extended its subscription to include the
daily Media Newsletter. Since September 2008 this newsletter is emailed to members free of
charge.
Website
PIASA‟s webpage are regularly reviewed and new items posted to ensure that members are
updated: www.piasa.co.za. A full website upgrade will be done in 2009.
Member Communication
The annual information session to update members on PIASA activities was held on 6
November 2008. Issues covered included the Medicines & Related Substances Amendment
Bill; a new Medicines Regulatory Environment, challenges in terms of Pricing Regulations,
integration of transformation management and the impact of National Health Insurance
proposals on the private sector.
This successful session included two interactive question and answer sessions between
members, the PIASA Executive Council and speakers.
Summary of important dates:
6 November 2008 - Update and Briefing Session
Committee Members (August 2008 - August 2009): Richard de Chastelain (Bayer Schering) - Chairperson, Pierre
Bosch (Alcon Laboratories), Kuben Pillay (Adcock Ingram), Elvis Mokoena (GlaxoSmithKline) and Vicki Ehrich
(PIASA).
Committee Members (May 2007 – August 2008): Richard de Chastelain (Bayer Schering) - Chairperson, Pierre Bosch
(Alcon Laboratories), Kuben Pillay (Adcock Ingram), Kathleen Alves (Adcock Ingram), Elvis Mokoena
(GlaxoSmithKline), Alyson Davies (Merck) and Vicki Ehrich (PIASA)
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Committee for Science and Technology (SciTech)
The mandate of the SciTech Committee is to analyse and interpret legislation and
international trends for member companies. It must also prepare comment and submissions
on legislation, regulations or guidelines to Government Departments or other stakeholders.
The SciTech Committee and its working sub-committees were restructured in order to include
more member companies in the activities of the specialist sub-committees.
The Executive Council‟s Regulatory and Clinical Committee merged with the SciTech
Committee to avoid duplication.
Members of SciTech and its specialist committees are experts drawn from multinational and
local member companies, with representatives of certain professional specialist organisations
such as SACRA, SAAPP, SAPRAA and SAAPI as well as some expert consultants.
The following were dealt with by the different specialist working groups:
Regulatory Compliance Subcommittee
New medicines control legislation
The intensive interaction with the Ministerial Task Team chaired by the Special Advisor to the
Minister of Health, Prof Ronnie Green-Thompson, during 2006 and 2007, resulted in the
publication of the Ministerial Task Team (MTT) Report recommending a restructuring of the
current medicines regulatory system which included a large number of important PIASA
recommendations and led to the publication in 2008 of the Medicines and Related
Substances Control Amendment Bill.
However, the Bill included a proposed two-tier system of registration for the approval of
medicines giving the Minister of Health final decision making powers over the registration of
medicines for reasons of “public interest” which were not defined. This was completely
unacceptable to PIASA members as any system of registration of medicines should be based
solely on the safety, quality and efficacy of medicines.
Publication of the Bill was followed by a period of intense activity. PIASA and other role
players made submissions and met with the Department of Health and a revised Bill was
published on 2 June 2009. However this revised Bill retained certain clauses unacceptable to
industry including the proposal for a two-tier approval system.
PIASA then made a number of submissions and presentations and held meetings with the
Chairperson and key members of the Portfolio Committee on Health, the opposition parties
and key stakeholders to present arguments opposing those clauses and to recommend
measures to improve and expedite the approval process.
In addition, PIASA submitted written proposals to the Parliamentary Portfolio Committee on
Health and also made presentations at the public hearings of the Committee. At the
invitation of the Chairman, PIASA also attended the following five meetings of the Portfolio
Committee to explain and clarify its recommendations.
19
Industry comments were positively considered by the Portfolio Committee. PIASA and other
industry role players succeeded in convincing the Committee to eliminate the Minister of
Health‟s decision making powers on registration as this proposal was unacceptable. The
Committee directed the Department of Health to redraft the Bill.
The final revisions to the Bill were approved by the Portfolio Committee and the National
Council of Provinces with minor changes. Publication of the amended Act and Regulations
are to follow in 2009. It is anticipated that the recommendations in the Ministerial Task Team
Report [many originating from the various PIASA submissions] will be incorporated into the
Regulations. Industry has also been promised that it will be consulted during the drafting of
the new Regulations.
National Health Bill - Comment on the draft National Health Bill, published on 18 April 2008
was submitted through the Pharmaceutical Task Group (PTG), in May 2008. The crux of the
industry submission was that the Health Bill should not regulate the price of medicines as the
Medicines and Related Substances Act of 1965 comprehensively regulates medicine prices.
The Director General of Health confirmed that the Department of Health intends to continue
to regulate the price of medicines through the Medicines Act and Pricing Regulations.
Concerns have been expressed that proposals in the National Health Bill to regulate the
prices of other health products and services conflict with both the Competition Act and the
Constitution. To date there has been no progress on this Bill.
Other
Safety and Patient Inserts – The PIASA and IMSA regulatory groups combined to address
Patient Information and Safety Issues. A survey of all IMSA and PIASA companies was done to
quantify the exact extent of the backlog. About 250 line items were identified where
approval for the inclusion of safety data in patient inserts was unacceptably delayed.
A meeting with the registrar was held on 28 August to present industry concerns regarding the
speedy inclusion of safety information in package inserts. The Registrar agreed that the
concerns were valid and that a meeting would be arranged with the Clinical Committee, as
safety information on patient inserts was their collective responsibility.
Data was collected and collated from member companies to be used in a presentation to
be delivered to the Registrar of Medicines and the Central Clinical Committee of the
Medicines Control Council (MCCC) on the vital importance of resolving the many problem
areas.
PIASA submitted comments on the Safety related package insert notification (SR PINS)
guideline in an attempt to consolidate all the MCC guidelines into one document and to
align the guideline to ICH standards.
Screening – A survey of actual screening times were done and it was found that, although
the MCC had previously agreed on a timeline of 10 days for screening of applications, the
actual period is 6 months. The committee proposed to the MCC to eliminate screening as a
standard requirement and that substandard applications be returned to the respective
companies. Unfortunately the Registrar wished to retain screening but agreed to address the
unacceptable delays. It is envisaged that industry should provide training to all new
companies to ensure that substandard applications are minimized.
MCC Guidelines – Comments on the proposed amendments to MCC Guidelines were
submitted for:
post registration amendments,
implementation of safety related package inserts, and guidelines covering the issue of
incorporating non-urgent safety issues in package inserts (which has been of concern to
the industry due to the delays in MCC approval),
recalls,
proprietary names and
the GMP guideline.
20
Medicine Packs – The new Namibian legislation requires Namibian registration details on the
pack. Volumes in Namibia are small and it is not feasible to have a Namibian specific pack.
Locally, MRA/MCC approval is needed before “other information” is added to the local South
African pack. Currently MCC is not granting approval for “other information to the pack”
therefore a meeting with both Namibia and South Africa registrars, to try and resolve this
issue, will be requested.
Summary of important dates: 25 Feb 2008 - Publication of Ministerial Task Team report
17 April 2008 - Meeting and submission to MCC on Screening
18 April 2008 - Publication of draft National Health Bill
21 May 2008 - Meeting with the Department of Health on Amendment Bill
2 June 2008 - Revised Bill published
9 June 2008 - Meeting with Mr Ngculu, Chairperson: Portfolio Committee on Health
5&6 August - Presentation to the Portfolio Committee
12 August 2008 - Submission of documentation to the Portfolio Committee
- Portfolio Committee Meeting, Parliament
28 August 2008 - Meeting and submission to MCC on Safety information on PI‟s
Committee Members (August 2008 – August 2009): Chairperson: Abeda Williams (Janssen-Cilag). Members: Gina
Partridge (Abbott Laboratories), Marianne Zenon (Adcock Ingram), Fleur Harman (Alcon), Suzanne Roe (Alcan),
Jasvanti Bhana (AstraZeneca), Mohammed Majid (AstraZeneca), Sanjay Lakha (AstraZeneca), Ilse Cukrowski
(Boehringer Ingelheim), Hilde Rodseth (Boehringer Ingelheim) also representing SAPRAA, Salomie Keyser
(Galderma), Linda Forsyth (Janssen-Cilag), Lynette Terblanche (Schering-Plough), Joy van Oudtshoorn (consultant),
Deepa Maharaj (Solvay), Celeste Truter (Servier), Fihlani Mavukani (Wyeth), Jackie Dring (Merck), Raenissa Naidoo
(iNova), Annelize de la Guerre (Bristol-Myers Squibb), Khadija Mayet (Covidien),Miranda Viljoen (SAAPI), Maureen
Kirkman (PIASA) and Kirti Narsai (PIASA).
Committee Members (May 2007 –August 2008): Chairperson: Abeda Williams (Janssen-Cilag), Deputy Chair -
Lynette Terblanche (Schering-Plough). Members: Fihlani Mavukani (Wyeth), Jasvanti Bhana (AstraZeneca),
Maureen Kirkman (PIASA), Gina Partridge (Abbott), Jackie Dring (Merck), Ilse Cukrowski (Boehringer Ingelheim),
Monica Drogemoller (GlaxoSmithKline), Joy van Oudtshoorn (consultant), Pat Smith (consultant), Hilde Rodseth
(Boehringer-Ingelheim) also representing SAPRAA, and Miranda Viljoen (SAAPI).
Clinical Subcommittee
Clinical trials - Lengthy delays in clinical trial approvals in South Africa were growing and
during 2008 these delays reached a crisis point. Some applications submitted in January
were still pending in June.
In the submission to the Ministerial Task Team, measures to improve efficiency in the Clinical
Trial Research Unit was proposed by the SciTech Clinical Specialist Committee who worked
together with the South African Clinical Research Association [SACRA] and South African
Association of Pharmaceutical Physicians [SAAPP] on this issue.
Meetings to communicate the value of Clinical Trials were held with different stakeholders
including government departments [the Department of Health, the Department of Trade and
Industry and the Department of Science and Technology] as well as health care
professionals, academics, and funders.
A clinical trials questionnaire was compiled to establish the actual situation. This was
intended to assist the Academy of Science of South Africa [ASSAf] which has taken over the
PIASA Clinical Research project to promote South Africa as a centre of excellence for clinical
trials. However the response to the questionnaire was very poor.
Collaboration with all stakeholders and data driven arguments are required with possible
legal challenges to deal with the issues facing clinical research. It appears that the
Department of Science and Technology (DST) which is responsible for promoting research
and development in South Africa may conduct a formal government survey in this field.
21
Maureen Kirkman was appointed to the special panel of the Academy of Science of SA to
investigate the status of Clinical Research in SA, from the training of research scientists to the
facilitation and approval of clinical trials. With Professor Peter Folb she was given the
responsibility of writing a chapter of a book to be published during 2009 - by the Academy -
on how all stakeholders including industry, government, research institutes and academia
can work together to make South Africa an attractive destination for clinical research and
clinical trials as well as providing in-put into a chapter on the ethics of clinical research
which is being compiled by Professors Ames Dhai and Jack Moodley.
A final position paper on clinical trials was developed and posted onto the PIASA website.
PIASA‟s overall comment on the draft Medicines and Related Substance Amendment Bill,
submitted to the Department of Health on 16 May 2008, and subsequently to the Portfolio
Committee on Health included recommendations and proposals relating to the process of
approval of clinical trials. If adopted by the medicines regulatory authority the changes will
result in faster approval of clinical trials and registration of medicines.
Guidelines for Good Clinical Practice - Comments on the revised GCP guidelines were
submitted to the Department of Health.
Good Clinical Practice - Following our communications on the value of Clinical Trials and our
participation in meetings in previous years, an initiative was started to build capacity for
clinical researchers and support staff in South Africa by providing training for young registrars
and other nominated individuals in current Good Clinical Practice – through the Foundation
for Professional Development (FPD).
The course material for the training to be offered by the Foundation was reviewed by
members of the SciTech Clinical Specialist Committee.
Despite adequate funding committed by PhRMA (Pharmaceutical Research and
Manufacturers of America) and course material being available, there was a lack of
commitment from the academic centres in Cape Town and Stellenbosch which was
necessary for the project to succeed. Work with heads of research of academic institutions
continued during 2008. It was decided to run a course in Johannesburg instead of starting
in Cape Town and Durban as originally planned.
FPD identified 25 doctors from previously disadvantaged groups, to complete a training
course on cGCP (current Good Clinical Practice). The FPD will keep a register of those who
have been trained and the intention was that PIASA would encourage its members to utilise
these trained but inexperienced medical practitioners as sub-investigators under the
mentorship of experienced investigators, thus providing necessary experience in the
conduct of clinical trials. In addition FPD identified 35 nurses from previously disadvantaged
groups who would also complete a training course in cGCP and could then be able to act
as assistants to investigators conducting clinical trials.
Pharmacovigilance - a workshop on Pharmacovigilance is being planned for 2009.
The Clinical Subcommittee sincerely regretted the departure of Mark Hopley, who was
promoted to a senior position at Boehringer Ingelheim in Germany, as Mark had contributed
immensely to the success of a number of previous PIASA workshops and activities and the
Committee wished him well.
Other - PIASA submitted comment to SARS (South African Revenue Service) on tax
incentives for clinical trials.
22
Committee Members (August 2008 - August 2009): Chairperson: Piero Lamberti (Bayer Schering). Members:
Premla Naidoo (Abbott Laboratories), Elise Wagner (AHN), Marlize Theron (Bayer Schering), Pauline Carr
(Boehringer Ingelheim), Peter Moore (Bristol-Myers Squibb), Willem Kriel (Bristol-Myers Squibb), Salomi Keyser
(Galderma), Mandisa Maholwana-Makgotle (GlaxoSmithKline), Marco Alessandrini (Key Oncologics), Rashem
Mothilal (Schering-Plough), Darren Katzman (Schering-Plough), Nini Ramasamy (Wyeth), Kirti Narsai (PIASA) and
Maureen Kirkman (PIASA).
Committee Members (May 2007 – August 2008): Chairperson: Navin Singh (GlaxoSmithKline) until July 2008 when
he left GSK. Chairmanship was taken over by Piero Lamberti (Bayer Schering and SAAPP representative), Deputy
Chair: Mark Hopley (Boehringer Ingelheim). Members: Babalwa Kobese (Adcock Ingram), Razia Hussain
(AstraZeneca), Marlize Theron (Bayer Schering and SACRA representative), Peter Moore (Bristol-Myers Squibb),
Lindiwe Pemba (Novo Nordisk), Nini Ramasamy (Wyeth), Chris Webber (Wyeth), Joy van Oudtshoorn (consultant)
and Maureen Kirkman (PIASA).
Summary of important dates: 26 June 2008 - Distribution of Questionnaire
16 May 2008 - Submission to DoH on clinical trial approval process
16 October 07 - Comment on cGCP Guidelines submitted to DoH
Quality Management Subcommittee
The focus area of the Production, Quality Management and GMP Compliance group for 2008
were:
Good Manufacturing Practice (GMP);
Distribution, theft and counterfeiting;
Medical waste
The team members met several times during the year. It was agreed that a broader group
be invited to the working group ensuring greater input from those persons at the coal face of
the activities. The decision is showing greater benefits in 2009.
The same focus will continue in 2009 with additional review of the Responsible Pharmacist
role.
Committee Members (August 2008 – August 2009): Chairperson: Helen Sophos (Novo Nordisk). Members: Deon
Poovan (Alcon), Walda Ellerbeck (AstraZeneca) Franziska Smith (Abbott Laboratories) , Gina Partridge (Abbott
Laboratories), Elize Wagner (AHN), Kim Hobbs (Adcock Ingram), Irene Badenhorst (Adcock Ingram), Jill Hagley
(Bayer Schering Pharma), Phillipine Nkoana (Janssen-Cilag), Bernadette McDowall (Merck), Ilze Geyer (Merck),
Jacqueline Pieterse (Novo Nordisk), Lynette Terblanche (Schering-Plough), Fihlani Mavukani (Wyeth), Fleur Hartman
(consultant), Joy van Oudtshoorn (consultant), Miranda Viljoen (SAAPI), Maureen Kirkman (PIASA) and Kirti Narsai
(PIASA).
Committee Members (May 2007 – August 2008): Chairperson: Helen Sophos (Novo Nordisk), Deputy Chair:
Bradley Parsons (Adcock Ingram). Members: Bernadette McDowall (Merck), David Nkosi (Adcock Ingram),
Maureen Kirkman (PIASA) Pat Smith (consultant) and Miranda Viljoen (SAAPI).
SciTech Committee Members
Committee Members (August 2008 – August 2009) Chairperson: Kobus Venter (Janssen-Cilag), Bradley Parsons
(Adcock Ingram) – until April 2009, Kim Hobbs (Adcock Ingram) – from May 2009, Ronel Coetzee (Bayer Schering),
Deon Vos (Merck), Abeda Williams (Janssen-Cilag), Helen Sophos (Novo Nordisk), Lynette Terblanche (Schering-
Plough), Darren Katzman (Schering-Plough), Maureen Kirkman (PIASA) and Kirti Narsai (PIASA).
Committee Members (May 2007 – August 2008) Maureen Kirkman (PIASA) - Chair, Bhadrish Vallabh (Abbott
Laboratories), Gina Partridge (Abbott Laboratories), Bradley Parsons (Adcock Ingram), Davis Mahlatji (Alcon
Laboratories), Jasvanti Bhana (AstraZeneca), Mark Hopley (Boehringer Ingelheim), Peter Moore (Bristol-Myers
Squibb), Hilde Rodseth (Boehringer Ingelheim) - SAPRAA representative, Pat Smith (Consultant), Joy van
Oudtshoorn (Consultant), Karim El-Alaoui (GlaxoSmithKline), Monica Drogemoller (GlaxoSmithKline), Navin Singh
(GlaxoSmithKline), Abeda Williams (Janssen-Cilag), Bernadette McDowall (Merck), Helen Sophos (Novo Nordisk),
Lynette Terblanche (Schering-Plough), Miranda Viljoen (Schering) – SAAPI representative, Nini Ramasamy (Wyeth),
Fihlani Mavukani (Wyeth), and Christine Schoeman (PIASA).
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Marketing Committee For almost 30 years PIASA has had compliance with a Code of Practice for the Marketing of
Medicines as a condition of membership. Although the PIASA Code includes a procedure
for handling complaints the first objective is always for the issues to be resolved by direct
interaction between the companies.
The Marketing Committee is responsible for updating and enforcing the PIASA Code of
Practice and for providing training on the Code to members. PIASA members were
requested to formally commit to adherence to the Code on behalf of their companies by
signing the PIASA Marketing Code revised in December 2006.
PIASA and SMASA [the Self Medication Association of South Africa] make compliance with
the SA Code mandatory for their members at present.
South African draft Code of Practice for the Marketing of Prescription Medicines
During 2006, the various trade associations of the pharmaceutical industry viz. PIASA, IMSA,
PHARMISA, NAPM and SMASA worked together with wholesalers and distributors to form a
Steering Committee to compile a draft SA Marketing Code, which was based on the IFPMA
Code of Practice and the original PIASA Marketing Code. This was published in January
2007.
The draft South African Marketing Code proposes enforcement of the Code through the
establishment of a Marketing Code Authority managed and funded by the pharmaceutical
industry to handle complaints, and to provide training, interpretation and revision of the
Code as required. [The PIASA Code of Practice was revised in December 2006 to align it
with the clauses of the draft SA Marketing Code].
Although the draft SA Marketing Code was endorsed by all trade associations as well as
wholesalers and distributors, compliance will only be enforced if the Code is published by
the Department of Health in the government gazette, since several trade associations
believe compliance with the terms of the Code will place them at a competitive
disadvantage in the marketplace when competing against companies which will not
comply with a code of ethics, unless obliged to do so by law.
It will take some years for the establishment of an industry body to enforce compliance with
the SA Marketing Code provisions. Note however that the complaints procedure in the
PIASA Code remains the original PIASA procedure until the Marketing Code Authority is in
place and effective.
Efforts were made to secure support for the Code from all role-players in the industry by
presenting the draft Code to other trade associations, health professionals, professional
bodies, statutory councils and the Department of Health during 2007 and 2008. The
Pharmaceutical Society of South Africa now formally endorses the draft South African
Marketing Code.
In 2008, after a presentation to the Portfolio Committee on Health, Parliament also
supported the principle of the SA Marketing Code. It was recommended that
implementation be phased in with the Code applying to allopathic medicines initially
followed by application to other fields of medicine and medical devices.
Committee Members (August 2008 – August 2009): Deon Vos (Merck) – Chairperson. Members: Kobus Venter
(Janssen-Cilag), Abeda Williams (Janssen-Cilag), Eric Reurts (Novo Nordisk), Lynette Terblanche (Schering-Plough)
and Maureen Kirkman (PIASA).
Committee Members (May 2007 – August 2008): Deon Vos (Merck) – Chairperson. Members: Francois Hoffmann
(Adcock Ingram), Anton Potgieter (Boehringer Ingelheim), Greg Baines (GlaxoSmithKline), Sue King
(GlaxoSmithKline), Coen van Tonder (GlaxoSmithKline), Kobus Venter (Janssen-Cilag) and Maureen Kirkman
(PIASA).
24
Financial Report Presented by Vexillum Pty Ltd
The financial affairs of the association remained well controlled and well within budget. A
satisfactory audit report was received and is detailed in the following pages.
The most significant financial highlights are summarized hereunder:
Overall Financial Results
The Association posted an audited surplus of R550 167 for the financial year under review, in
comparison with a prior year surplus of R1 287 320.
Subscription Income
The membership subscriptions for 2008 were increased by 8%, as approved by members at
the Annual General Meeting held in 2007.
The income received from subscriptions for the year was R6 349 980, compared to R6 331 335
in 2007. The small increase of only 0,3% in the face of the 8% increase was partially due to the
loss of two members during the year under review.
Other Income
Other income came from workshops held and interest on bank balances. Interest received
exceeded budget expectations by R158 731.
Operating Expenses
The total operating expenses remained tightly controlled and ended well below budget.
* Personnel Costs
The Association‟s payroll costs were 18% higher in 2008 moving from R2 364 362 in 2007 to
R2 788 174 in 2008, but were below the budget of R2 917 806.
The increase was attributable to an approved annual increase in salaries and an
additional headcount for three months of the year, being the replacement for M Kirkman.
* Committee Expenses
The majority of the committee expenses related to draft pricing. The total cost incurred
was R826 025. No special levy was raised.
Capital Expenditure
The net cash used in capital expenditure was R213 591, exceeding the budget of R130 000.
The overspend was due to largely to the purchase of a generator, which was acquired jointly
with Wyeth, due to all the power shortages. This expense was not foreseen nor budgeted for.
The balance of the funds was spent on completion of the interior alterations, started in 2007,
which included a bigger boardroom, the conversion of one of the spare offices into a
catering room and changing the entrance hall as well as installing security fixtures on the
windows.
25
Accounts Receivable
The accounts receivable of the Association remained well controlled.
All subscriptions invoiced during the financial year were collected by year-end.
Cash Management
At year-end, the cash resources of the Association amounted to R7 319 914 exceeding the
prior year‟s balance of R6 989 771.
Most of the Association‟s funds are retained in interest bearing investments in order to
maximize the return thereon for the Association.
26
ANNUAL FINANCIAL STATEMENTS: Pharmaceutical Industry Association of SA For the year ended 31 December 2008
Contents
Directors‟ Responsibility Statement
Independent Auditor‟s report 3
Directors‟ report 4
Balance sheet 5
Income statement 6
Statement of changes in equity 7
Cash flow statement
Notes to the financial statements
27
28
29
30
30
30
31
31
Directors’ responsibility for the annual financial statements
The directors are responsible for the preparation and fair presentation of the annual financial
statements of The Pharmaceutical Industry Association of South Africa, comprising the
balance sheet at 31 December 2008, and the income statement, the statement of changes
in equity and cash flow statement for the year then ended, and the notes to the financial
statements, which include a summary of significant accounting policies and other
explanatory notes, and the directors‟ report, in accordance with South African Statements of
Generally Accepted Accounting Practice and in the manner required by the Companies Act
of South Africa.
The directors‟ responsibility includes: designing, implementing and maintaining internal
control relevant to the preparation and fair presentation of these financial statements that
are free from material misstatement, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting estimates that are reasonable in
the circumstances.
The directors‟ responsibility also includes maintaining adequate accounting records and an
effective system of risk management.
The directors have made an assessment of the company‟s ability to continue as a going
concern and have no reason to believe the business will not be a going concern in the year
ahead.
The auditor is responsible for reporting on whether the annual financial statements are fairly
presented in accordance with the applicable financial reporting framework.
Approval of the annual financial statements
The annual financial statements of the Pharmaceutical Industry Association of South Africa, as
identified in the first paragraph, were approved by the board of directors on 19 May 2009.
27
Independent auditor’s report
To the members of the Pharmaceutical Industry Association of South Africa
We have audited the annual financial statements of the Pharmaceutical Industry
Association of South Africa, which comprise the balance sheet at 31 December 2008, and
the income statement, the statement of changes in equity and cash flow statement for the
year then ended, and the notes to the financial statements, which include a summary of
significant accounting policies and other explanatory notes, and the directors‟ report.
Directors’ responsibility for the financial statements
The company‟s directors are responsible for the preparation and fair presentation of these
financial statements in accordance with South African Statements of Generally Accepted
Accounting Practice and in the manner required by the Companies Act of South Africa. This
responsibility includes: designing, implementing and maintaining internal control relevant to
the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the
circumstances.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with International Standards on Auditing. Those
standards require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor‟s
judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity‟s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity‟s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial
position of the Pharmaceutical Industry Association of South Africa at 31 December 2008,
and its financial performance and cash flows for the year then ended in accordance with
South African Statements of Generally Accepted Accounting Practice, and in the manner
required by the Companies Act of South Africa.
KPMG Inc.
Per C Swart
Chartered Accountant (SA)
Registered Auditor
Director
19 May 2009
28
Directors’ report
The directors have pleasure in presenting their report for the year ended 31 December 2008.
Nature of business The Association is incorporated in the Republic of South Africa. The Association‟s objective is
to promote the pharmaceutical industry at all times.
General review
The results of the Association‟s operations, for the year ended 31 December 2008, are
adequately disclosed in the accompanying annual financial statements. During the prior
year the Association changed its name from Pharmaceutical Manufacturers‟ Association of
South Africa to The Pharmaceutical Industry Association of South Africa.
Directors The following acted as directors during the year and to the date of the report –
J Louw (appointed 22 May 2007)
G Goolab
RA De Chastelain
AM Pearce
JD Venter
P Lyons
E Reurts
I Amod
D Vos
JW Hooghuis
Secretary The secretary of the company is Vexillum (Proprietary) Limited. Their registered and postal
addresses are as follows:
Registered address – Postal address –
11B Riley Road PO Box 781907
Eastwood Office Park Sandton
Bedfordview 2146
2008
29
Balance sheet Note 2008 2007
R R
Assets
Non-current asset
Property, plant and equipment 3 352 976 209 377
Current assets 7 699 275 7 245 610
Trade and other receivables 4 379 361 255 839
Cash and cash equivalents 5 7 319 914 6 989 771
Total assets 8 052 251 7 454 987
Equity
Reserves
Accumulated funds 7 497 552 6 947 385
Current liabilities
Trade and other payables 6 554 699 507 602
Total equity and liabilities 8 052 251 7 454 987
Income statement Note 2008 2007
R R
Revenue 7 6 540 263 6 639 285
Expenditure (6 698 827) (5 981 952)
Excess of revenue over expenditure before finance
income
9 (158 564) 657 333
Finance income 8 708 731 629 987
Excess of revenue over expenditure for the year 550 167 1 287 320
Statement of changes in equity Accumulated
funds
R
Balance at 31 December 2006 5 660 065
Excess of revenue over expenditure for the year 1 287 320
Balance at 31 December 2007 6 947 385
Excess of revenue over expenditure for the year 550 167
Balance at 31 December 2008 7 497 552
30
Cash flow statement Note 2008 2007
R R
Cash flows from operating activities
Excess of revenue over expenditure before working
capital changes
10.1 (88 572) 710 968
Working capital changes 10.2 (76 425) 129 949
Cash generated by operations (164 997) 840 917
Finance income 708 731 629 987
Net cash flow from operating activities 543 734 1 470 904
Cash flows from investing activities
Disposal of property, plant and equipment – 26 911
Property, plant and equipment acquired (213 591) (146 569)
Net cash flow from investing activities (213 591) (119 658)
Net increase in cash and cash equivalents 330 143 1 351 246
Cash and cash equivalents at beginning of year 6 989 771 5 638 525
Cash and cash equivalents end of year 5 7 319 914 6 989 771
Notes to the financial statements
1. Accounting policies
The annual financial statements are prepared on the historical cost basis, and incorporate the
following principal accounting policies which are consistent with those adopted in the previous
year.
1.1 Basis of preparation
The annual financial statements are prepared in accordance with the requirements of South African
Statements of Generally Accepted Accounting Practice and the requirements of the Companies Act of South
Africa. The annual financial statements are prepared on a going concern basis.
1.2 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and are depreciated at the
following rates per annum on the reducing-balance method, which is based on the estimated economic lives
of the related assets:
Motor vehicles 20%
Furniture and fittings 15%
Computer equipment 33.33%
Office equipment 25%
Leasehold improvements 20%
The initial cost of the fixed assets comprises its purchase price, and any directly attributable costs of bringing
the asset to its working condition and location for its intended use. Expenditures incurred after the fixed assets
have been put into operation, such as repairs and maintenance, are normally charged to income in the
period in which the costs are incurred.
In situations where it can be clearly demonstrated that the expenditures have resulted in an increase in the
future economic benefits expected to be obtained from the use of the fixed asset beyond its originally
assessed standard of performance, the expenditures are capitalised as an additional cost of the fixed asset.
31
1.3 Impairment of assets
Fixed assets are reviewed for impairment whenever changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset
exceeds its recoverable amount, an impairment loss is recognised in income for fixed assets carried at
cost.
The recoverable amount is the higher of an asset‟s net selling price and value in use. The net selling
price is the amount obtainable from the sale of an asset in an arm‟s length transaction while value in
use is the present value of estimated future cash flows expected to arise from the continuing use of an
asset and from its disposal at the end of its useful life.
1.4 Cash and cash equivalents
Cash includes cash on hand and cash with banks.
1.5 Financial instruments
Initial recognition
The company classifies financial instruments, or their component parts, on initial recognition as a
financial asset, a financial liability or an equity instrument in accordance with the substance of the
contractual arrangement.
Financial assets and financial liabilities are recognised on the company‟s balance sheet when the
company becomes party to the contractual provisions of the instrument.
Trade and other receivables
Trade receivables are measured at initial recognition at fair value, and are subsequently measured at
amortised cost using the effective interest rate method. Appropriate allowances for estimated
irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset
is impaired. The allowance recognised is measured as the difference between the asset‟s carrying
amount and the present value of estimated future cash flows discounted at the effective interest rate
computed at initial recognition.
Trade and other payables
Trade payables are initially measured at fair value, and are subsequently measured at amortised cost,
using the effective interest rate method.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly
liquid investments that are readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value. These are initially and subsequently recorded at fair value.
Bank overdraft and borrowings
Bank overdrafts and borrowings are initially measured at fair value, and are subsequently measured at
amortised cost, using the effective interest rate method. Any difference between the proceeds (net of
transaction costs) and the settlement of redemption of borrowings is recognised over the term of the
borrowings in accordance with the company‟s accounting policy for borrowing costs.
1.6 Revenue
Revenue, which excludes value added taxation, represents the invoiced value of subscription,
income, training course fees and other sundry income.
1.7 Finance income
Finance income comprises interest income on funds invested. Interest income is recognised as it
accrues, using the effective interest method.
1.8 Operating lease
Leases of assets under which all the risks and rewards of ownership are effectively retained by the
lessor are classified as operating leases. Lease payments under an operating lease are recognised as
an expense on a straight-line basis over the lease term.
32
2. Financial risk management
Overview
The association has exposure to the following risks from its use of financial instruments:
Credit risk
Liquidity risk
Market risk
This note presents information about the association‟s exposure to each of the above risks, the association‟s
objectives, policies and processes for measuring and managing risk and the association‟s management of
capital. Further quantitative disclosures are included throughout these financial statements.
Credit risk
Credit risk is the risk of financial loss to the association if a member or counterparty to a financial instrument fails
to meet its contractual obligations, and arises principally from the association‟s receivables from member and
investments securities.
Trade and other receivables
The association‟s exposure to credit risk is influenced mainly by the individual characteristics of each member.
Allowance for impairment
The association establishes an allowance for impairment that represents its estimate of incurred losses in respect
of trade and other receivables and investments.
Investments
The association limits its exposure to credit risk by only investing in liquid securities and only with major financial
institutions in the country.
Liquidity risk
Liquidity risk is the risk that the association will not be able to meet its financial obligations as they fall due. The
association‟s approach to minimising liquidity risk is to ensure, as far as possible, that it has adequate banking
facilities and reserve borrowing capacity to meet its liabilities when due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the association‟s reputation.
Market risk
Market risk is the risk that changes in the market prices, such as foreign exchange rates, interest rates and equity
prices will affect the association‟s income or the value of its holdings of financial instruments.
Currency risk
The association has limited exposure to currency risk as the majority of the association‟s transactions are in local
currency.
Interest rate risk
As part of the process of managing the association‟s interest rate risk, interest rate characteristics of new
borrowings and the refinancing of existing borrowings are positioned according to expected movements in
interest rates.
Capital management
Management‟s policy is to maintain a strong capital base so as to maintain creditor confidence and to
sustain future development of the business.
33
3. Property, plant and equipment
2008
Furniture
and fittings
Computer
equipment
Office
equipment
Leasehold
improvements Total
R R R R R
Beginning of the year
– cost 274 511 577 634 35 219 44 031 931 395
– accumulated deprecation (172 530) (477 757) (31 713) (40 018) (722 018)
Opening carrying value 101 981 99 877 3 506 4 013 209 377
Current year movements
– additions 180 541 – – 33 050 213 591
– depreciation (28 934) (33 293) (876) (6 889) (69 992)
Closing carrying value 253 588 66 584 2 630 30 174 352 976
Made up as follows:
– cost 455 052 577 634 35 219 77 081 1 144 986
– accumulated deprecation (201 464) (511 050) (32 589) (46 907) (792 010)
Closing carrying value 253 588 66 584 2 630 30 174 352 976
2007
Beginning of the year
– cost 216 696 508 579 35 219 44 031 804 525
– accumulated deprecation (154 533) (442 468) (30 545) (39 016) (666 562)
Opening carrying value 62 163 66 111 4 674 5 015 137 963
Current year movements
– disposals – (5 049) – – (5 049)
– cost – (19 699) – – (19 699)
– accumulated deprecation – 14 650 – – 14 650
– additions 57 815 88 754 – – 146 569
– depreciation (17 997) (49 939) (1 168) (1 002) (70 106)
Closing carrying value 101 981 99 877 3 506 4 013 209 377
Made up as follows:
– cost 274 511 577 634 35 219 44 031 931 395
– accumulated deprecation (172 530) (477 757) (31 713) (40 018) (722 018)
Closing carrying value 101 981 99 877 3 506 4 013 209 377
2008 2007
R R
4. Trade and other receivables Trade receivables – 117 379
Less: Impairment of trade receivables – (5 391)
Prepayments 61 814 82 716
Other receivables 317 547 61 135
379 361 255 839
34
2008 2007
R R
5. Cash and cash equivalents Bank balances and cash 650 298 26 502
Short term investments 6 669 616 6 963 269
7 319 914 6 989 771
6. Trade and other payables Accruals 106 660 214 505
Sundry creditors 115 929 22 144
Trade payables 23 651 250 953
Income received in advance 308 459 20 000
554 699 507 602
7. Revenue Subscription income 6 349 980 6 331 335
Sundry income 190 283 307 950
6 540 263 6 639 285
8. Finance income Interest on investments 708 731 629 987
9.
Excess of revenue over expenditure before finance income
Excess of revenue over expenditure before finance income is arrived
at after charging –
Profit on disposal of property, plant and equipment – (21 862)
Accounting fees 202 178 151 093
Auditor‟s remuneration
– audit fee 106 902 28 000
Depreciation 69 992 70 106
Impairment of trade receivables – 5 391
Legal fees 184 725 210 311
Rental
– office equipment 443 747 506 059
– premises 442 639 447 737
10. Notes to the cash flow statement
10.1 Excess of revenue over expenditure before working capital changes
Excess of revenue over expenditure for the year 550 167 1 287 320
Adjusted for –
Profit on disposal of property, plant and equipment – (21 862)
Finance income (708 731) (629 987)
Impairment of trade receivable – 5 391
Depreciation 69 992 70 106
(88 572) 710 968
10.2 Working capital changes
(Increase)/decrease in trade and other receivables (123 522) 36 577
Increase/(decrease) in trade and other payables 47 097 93 372
(76 425) 129 949
35
11. Taxation
The Association was previously exempt from taxation in terms of the now repealed
Section 10(1)(cB) of the Income Tax Act. The company was last assessed in the 2005 tax year
and the tax exemption was received in 2008.
In accordance with revisions to the Income Tax Act, the Association has re-applied for tax
exemption as a public benefit organisation. The Association will retain its exempt status until
written notification by the Commissioner of the outcome of the application is received.
12. Lease commitments
The Association has operating lease commitments in respect of buildings and office
equipment payable as follows:
2008 2007
R R
Due within a year 475 177 410 436
Due thereafter – 315 624
475 177 726 060
13. Financial instruments
Credit risk
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The
maximum exposure to credit risk at the reporting date was:
2008 2007
R R
Trade and other receivables – 255 839
Cash and cash equivalents 7 319 914 6 989 771
7 319 914 7 245 610
All trade receivables at the reporting date were domestic in nature.
Impairment losses
The ageing of trade receivables at the reporting date was:
2008 2007
Gross
Impairment
allowance Gross
Impairment
allowance
R R R R
30 – 60 days – – 36 145 (3 635)
60 – 90 days – – 81 234 (1 756)
Total – – 117 379 (5 391)
36
13. Financial instruments (continued)
Liquidity risk
The following are the contractual maturities of financial liabilities, including interest payments and
excluding the impact of netting agreements:
Carrying
amount
Contractual
cash flows
6 months or
less
R R R
31 December 2008
Non-derivative financial liabilities
Trade and other payables 554 699 554 699 554 699
31 December 2007
Non-derivative financial liabilities
Trade and other payables 507 602 507 602 507 602
Fair values
Fair values versus carrying amounts
The fair values of financial assets and liabilities, together with the carrying amounts shown in the
balance sheet, are as follows:
2008 2007
Carrying
amount Fair value
Carrying
amount Fair value
R R R R
Trade and other receivables – – 255 839 255 839
Cash and cash equivalents 7 319 914 7 319 914 6 989 771 6 989 771
7 319 914 7 319 914 7 245 610 7 245 610
Trade and other payables (554 699) (554 699) (507 602) (507 602)
6 765 215 6 765 215 6 738 008 6 738 008
37
14. Standards and interpretations not yet effective
At the date of authorisation of the financial statements of The Pharmaceutical Industry
Association of South Africa (an association incorporated under section 21) for the year ended
31 December 2008, the following Standards and Interpretations were in issue but not yet
effective:
Standard Interpretation Effective date*
IAS 1 (AC 101) Presentation of Financial Statements Annual periods
commencing on or after
1 January 2009*
IAS 23 (AC 114) Borrowing Costs Annual periods
commencing on or after
1 January 2009*
IAS 27 (AC 132)
amendment
Consolidated and Separate Financial Statements Annual periods
commencing on or after
1 January 2009*
IAS 32 (AC 125) &
IAS 1 (AC 101)
amendment
IAS 32 (AC 125) Financial Instruments: Presentation
and IAS 1 (AC 101) Presentation of Financial
Statements: Puttable Financial Instruments and
Obligations Arising on Liquidation
Annual periods
commencing on or after
1 July 2009*
IFRS 2 (AC 139)
amendment
IFRS 2 Share-based Payment: Vesting Conditions
and Cancellations
Annual periods
commencing on or after
1 January 2009*
IFRS 3 (AC 140) Business Combinations Annual periods
commencing on or after
1 July 2009*
IFRS 8 (145) Operating Segments Annual periods
commencing on or after
1 January 2009*
IFRIC 11
(AC 444)
IFRS 2 – Group and Treasury Share Transactions Annual periods
commencing on or after
1 March 2008*
IFRIC 12
(AC 445)
Service Concession Arrangements Annual periods
commencing on or after
1 January 2008*
IFRIC 13
(AC 446)
Customer Loyalty Programmes Annual periods
commencing on or after
1 July 2008*
IFRIC 14
(AC 447)
IAS 19 – The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and their
Interaction
Annual periods
commencing on or after
1 January 2008*
All Standards and Interpretations will be adopted at their effective date (except for the effect
of those standards that are not applicable to the entity).
IFRS 8 (AC 145), IFRIC 11 (AC 444), IFRIC 12 (AC 445) and IFRIC 13 (AC 446) are not applicable to
the business of the company and will therefore have no impact on future financial statements.
IAS 1 (AC 101)
IAS 1 (AC 101) will be adopted by The Pharmaceutical Industry Association of South Africa (an
association incorporated under section 21) for the first time for its financial reporting period
ending 31 December 2009.
The association will present all non-owner changes in equity in a single statement of
comprehensive income (which will include the current income statement).
38
Past Presidents
1967/68 Mr N R Tuck
1968/69 Mr A Sachs
1969/70 Mr A Sachs
1970/71 Mr A L Birchley
1971/72 Mr A L Birchley
1972/73 Mr A Sachs
1973/74 Mr A Sachs
1974/75 Mr C E Barrelett
1975/76 Mr C E Barrelett
Mr A V Trentham
1976/77 Dr H H Snyckers
1977/78 Dr H H Snyckers
1978/79 Mr D C Bodley
1979/80 Mr D C Bodley
1980/81 Mr D C Bodley
1981/82 Mr D C Bodley
1982/83 Dr H H Snyckers
1983/84 Dr H H Snyckers
1984/85 Dr H H Snyckers
1985/86 Dr H H Snyckers
1986/87 Dr H H Snyckers
1987/88 Mr S P Lance
1988/89 Dr H H Snyckers
1989/90 Dr H H Snyckers
1990/91 Dr H H Snyckers
1991/92 Dr H H Snyckers
1992/93 Dr H H Snyckers
1993/94 Dr H H Snyckers
1994/95 Dr G L Faber
1995/96 Mr M C Norris
1996/97 Mr M C Norris
1997/98 Mr R de Chastelain
1998/99 Mr R de Chastelain
1999/00 Mr R de Chastelain
2000/01 Mr R de Chastelain
2001/02 Mr R de Chastelain
2002/03 Ms E Mann
Mr R de Chastelain
2003/04 no President only presidents council:
Mr M Spector
Mr JD Venter
Mr A Wish
2004/05 Mr M Spector
2005/06 Dr G Goolab
2006/07 Mr A Pearce
2007/08
Mr A Pearce
39
Honorary Life Members
1969 Mr B Wright
1974 Mr A L Birchley
1978 Mr N R Tuck
1979 Mr H C McGarity
Mr S F Janet
1987 Dr R Bauling
Mr F Wayne
1992 Mr D C Bodley
1994 Dr H H Snyckers
1998
Prof J J van Wyk
Mr M Norris
Mr N Dolman
1999
Dr N Kritzinger
Mr J Niehaus
2002
Dr G Faber
Dr J Botha
Prof D Reekie
2008
Ms J van Oudtshoorn
Mr P Smith
Mr R de Chastelain
40
