Pretoria High Court: Cipla Medpro South Africa HIV Tender Set Aside, R12.6B Reconsideration

• The Pretoria High Court has set aside a R12.6-billion portion of the National Department of Health's R15.5-billion HIV pill tender due to multiple irregularities.
• Cipla Medpro Manufacturing and Hetero Drugs South Africa initiated the legal challenge after being largely unsuccessful in securing major contracts.
• Acting Judge Graham Girdwood ordered the Department of Health to redo the awards for one-month and three-month fixed-dose combination packs within 120 days.
• Innovata Pharmaceuticals and Viatris Healthcare were disqualified for lacking valid manufacturing licenses, while Barrs Pharmaceuticals and Aurobindo Pharma faced price adjustments and HDI claim scrutiny.
• The court mandated an investigation into potential collusion between Innovata Pharmaceuticals and Barrs Pharmaceuticals during the bidding process.

This ruling reinforces the principle that tender processes must be fair, transparent, and compliant with all legal and constitutional requirements, especially when dealing with life-saving medications.

The Pretoria High Court has ordered the National Department of Health to reconsider a substantial portion of its R15.5-billion HIV pill contracts, specifically the R12.6-billion allocation designated for one-month and three-month fixed-dose combination packs. This directive stems from a legal challenge initiated by Cipla Medpro Manufacturing, a prominent local pharmaceutical company, alongside Hetero Drugs South Africa, following their limited success in securing awards for these vital drug supplies. Acting Judge Graham Girdwood, presiding over the Pretoria High Court, identified numerous irregularities in the original tender awards, declaring them unlawful and unconstitutional.

The tender, which was slated to become effective in December 2025, involves the provision of Tenofovir, lamivudine, and dolutegravir, which constitute the standard first-choice ARV regimen in South Africa. These medications are indispensable for millions of individuals, and any interruption in their supply could pose severe, life-threatening risks. Cipla, despite its established market presence and strong track record, received only minor awards totaling R215-million, which prompted its legal action to have certain awards set aside. Hetero Drugs South Africa also sought a reconsideration of its own bid.

Judge Girdwood has mandated the Department of Health to re-evaluate and re-award the contracts for the one-month and three-month packs within a 120-day timeframe. To prevent any disruption in the supply chain of these critical medicines, the court stipulated that current suppliers must continue their deliveries. Furthermore, the setting aside of the original awards will only become effective 90 days after the department finalizes the new awards, thereby ensuring a seamless transition to the newly selected providers and avoiding any stockouts.

The Pretoria High Court tender judgment highlighted a range of South Africa public procurement irregularities, scrutinizing various aspects of the bidding process for the critical ARV tender. Acting Judge Girdwood's comprehensive ruling addressed concerns raised by Cipla, which included issues related to non-responsive bidders, inadequate past performance, incorrect granting of local manufacturing status, unsubstantiated claims for historically disadvantaged individual (HDI) points, and potential collusion among bidders.

A significant finding concerned Innovata Pharmaceuticals and Viatris Healthcare, whose bids were specifically excluded from reconsideration. The court determined that these companies failed to qualify beyond the initial stage of the bidding process. It was established that neither Innovata nor Viatris possessed a valid license for their Isando-based manufacturing facility at the time the bids closed, with the judge explicitly stating that an expired license is not a valid one. This fundamental non-compliance led to their Innovata Pharmaceuticals tender disqualification, meaning their bids should not have progressed further.

Further irregularities involved Barrs Pharmaceuticals and Aurobindo Pharma. The court ordered that their final bid prices be reverted to their pre-negotiation levels, as they did not meet the criteria for local manufacturing preference. Additionally, both Innovata and Barrs Pharmaceuticals faced score adjustments because they had been awarded HDI points without providing sufficient proof of the ownership they claimed. The judge also directed the Department of Health to conduct an investigation into whether Innovata and Barrs had engaged in collusion during the bidding process. Notably, both Innovata and Barrs, subsidiaries of Avacare, entered business rescue in December 2025, and Barrs experienced stockouts of its contracted items shortly thereafter, though both companies have since exited business rescue this year. The adjudication scores for manufacturers not implicated in any irregularity would not be affected by the review of the

The decision to set aside a substantial portion of the National Department of Health ARV tender underscores the critical importance of strict adherence to public procurement regulations in South Africa. This ruling reinforces the principle that tender processes must be fair, transparent, and compliant with all legal and constitutional requirements, especially when dealing with life-saving medications. The potential for stockouts of essential ARVs, which are the first-choice treatment for millions, highlights the severe public health risks associated with flawed procurement.

This Pretoria High Court tender judgment sends a clear message to pharmaceutical companies participating in South African public procurement: meticulous compliance with all tender specifications, including licensing, local manufacturing preferences, and accurate HDI claims, is non-negotiable. The judicial scrutiny applied in this case, particularly regarding the Innovata Pharmaceuticals tender disqualification and the ordered investigation into potential collusion, indicates a firm stance against any irregularities. The integrity of the procurement system is paramount to ensure that public funds are used effectively and that the most capable and compliant suppliers are selected to deliver essential services.

The requirement for the Department of Health to redo the awards within a tight timeframe, while simultaneously ensuring continuous supply, demonstrates the judiciary's commitment to both upholding legal standards and safeguarding public welfare. This outcome will likely prompt a review of bidding processes by pharmaceutical companies and procurement officers alike, aiming to mitigate risks of future challenges and ensure robust compliance frameworks are in place.

Lawyers advising pharmaceutical companies on South African public procurement must note the strict judicial scrutiny on tender compliance, particularly concerning licensing, HDI claims, and local manufacturing preferences, as evidenced by this judgment setting aside a major ARV tender. Compliance officers should review bidding processes to mitigate risks of irregularities and potential collusion investigations.

Source: Details from court judgment.