SAMED Presentation to Portfolio Committee on Trade and IndustryBBBEE Amendment Bill8 March 2013

About SAMED

SAMED – We are ........

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South African Medical Device Industry

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SAMED objectives

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About medical technology

What do we mean by medical technology?

* www.eucomed.org, 2011

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Medical technology delivers value to health system

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*http://www.treasury.gov.za/documents/national%20budget/2012/guides/Budget%20Highlights%202012.pdf and http://www.doh.gov.za/docs/notices/2011/not34523.pdf (pg 12).

Innovation

• Ongoing innovation responsible for countless successes and ‘miracles’ of medicine – Harnessing the power of technological revolution

to save and improve patients’ lives• Dynamic industry, driven by continuous

development of new and improved devices– Improvements happen at remarkable speed – new

version within 18-24 months of introduction– Revisions based on experience of clinicians and

patients• In near future today’s investments will bring

yet-unknown discoveries to help eradicate HIV/AIDS & NCD’s including cancer, diabetes, & CVD

Significant increase in value

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Challenges

• Largely unregulated environment– Medical Devices cannot be regulated as medicines– Base regulations on the Global Harmonisation Task Force

guidance documents and other international standards

• Procurement process– Outstanding payments– Tender bids lack consistency– Specs outdated– Cost of SANS specification and/ or SABS certification– (where each batch of product supplied requires a SANS / SABS

tests)– Credibility of the SANS specification– No system for post bid “award” for continued supply quality /

functionality review– Target for price compromising Quality & Functionality– Very little preferences/support for Local manufacture – cost of

CE Mark / ISO13485– Medical aids non transparent re reimbursement decision

criteria – focus on price

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BBBEE General Remarks

• SAMED supports BBBEE, and many of its members have over the years made significant strides in implementing BBBEE

• SAMED supports the Bill’s provisions on the BBBEE Council and the outlawing of fronting

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Bill and the Codes

• The Bill creates the empowering framework for the new draft Codes: – one needs to ensure that the law gives the

mandate to the Codes• The Draft Codes creates a system that will lead

to current level 4 BEE businesses becoming non-compliant once the new Drafts are in effect,– due to the higher points system and the two-level

downgrade for sub-optimal compliance with priority pillars

• The Draft Codes may have the opposite effect – disincentivising and/or making BEE unachievable or hard to achieve for many companies

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Definitions

“Broad-based black economic empowerment”: definition is narrow-based and linked to local content, does not enhance – broad-based and could actually override companies with good performance on other pillars (e.g. skills development or enterprise development)

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Local Content / Manufacturing

• This criterion is already included in the Preferential Procurement Regulations – now it is considered a second time? (preferential procurement regulations already include BEE in its totality as either 20 or 10 point)

• Is the BBBEE Act the right home to regulate local content and manufacturer and is it within the legislated mandate of BEE?

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Vagueness in Ministerial Determination

• “If requested to do so, the Minister may by notice in the Gazette permit organs of state or public entities to specify qualification criteriafor procurement and other economic activities which exceed those set by he Minister in terms of subsection (1)”

• No criteria when, no timeframes, no opportunity for comment, possibly an unlawful delegation of legislative power?

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Questions?

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