South African health products REGULATORY authority ( sahpra ) PROGRESS report 2018

1. South African health products REGULATORY authority (sahpra)PROGRESS report 2018 Select committee on Social Services 06 November 2018

2. OUTLINE • Background • Macro organizational structure of SAHPRA • SAHPRA vision and mission • Legislative mandates • Strategic outcome oriented goals • Strategic objectives • Key achievements per program • Key challenges and contingency measures

3. BACKGROUND • SAHPRA established in terms of the Medicines and Related Substances Act (Act 101 of 1965), as amended, to replace the MCC. • SAHPRA is Schedule 3A public entity: regulation of all medicines including complementary medicines, medical devices and IVDs, radiation emitting devices and radioactive nucleides. • Minister of Health appointed Board 2 October 2017. • Acting CEO appointed by the Board after consultation with the Minister of Health. • Staff transfer agreement signed October 2018 (section 197) following lengthy Bargaining Chamber processes. • Board Committees: Finance, Risk, Audit and Governance, HR and Remuneration, IT, Technical Oversight and Regulatory Strategy, Communication. • SAHPRA operational on February 1st 2018 with first Board. • 1st annual report due financial year 2018/19

4. Macro Organizational Structure of SAHPRA

5. VISION AND MISSION Our Vision: To strive towards excellence in health product regulation with the aim of promoting and protecting human and animal health in South Africa, being recognised and respected both nationally and globally as a leading and exemplary health product regulator Our Mission: To safeguard the health and wellbeing of all who live in South Africa and to support human and animal health through scientific and ethical regulation of medicines, medical devices, radiation emitting devices and radioactive nucleides

6. LEGISLATIVE MANDATES • The Constitution of the Republic of South Africa, 1996 (Act 108 of 1996) • The National Health Act, 2003 (Act 61 of 2003) • The Medicines and Related Substances Act , (Act 101 of 1965) as amended • Other Health-Related Acts • Other Legislation

7. STRATEGIC OUTCOME ORIENTED GOALS

8. STRATEGIC OUTCOME ORIENTED GOALS

9. STRATEGIC OUTCOME ORIENTED GOALS

10. SAHPRA STRATEGIC OBJECTIVES

11. KEY ACHIEVEMENTS

12. PROGRAMME ONE: ADMINISTRATION

13. PROGRAMME PURPOSE To provide the leadership and administrative support necessary for SAHPRA to deliver on its mandate and comply with all relevant legislative requirements. • Programme 1 has four sub-programmes: • Sub-Programme 1: Financial and Supply Chain Management • Sub-Programme 2: Governance and Compliance • Sub-Programme 3: Information Technology and Communication • Sub-Programme 4: Human Resource Management

14. KEY ACHIEVEMENTS Sub-Programme 1: Financial and Supply Chain Management • Finance, Supply chain and donations policies finalised • The Board manages its finances under the direction of the Public Finance Management Act (PFMA) through the Office of the CFO. • SAHPRA revenue earned for period 1 February to 31 March 2018 will be accounted for in the SAHPRA AFS for year ending 31 March 2019. • An exemption was requested in terms of Section 55 A of the PFMA from National Treasury. A letter has been tabled before the speaker in terms of Section 65(2) (a) to provide a written explanation setting out reasons why SAHPRA has not tabled the annual report and financial statement for the period 2017/18.

15. KEY OUTPUTS • Expenditure incurred of SAHPRA for the 2017-18 will be accounted for and reported in annual financial statements (AFS) of National Department of Health. • Revenue collected by SAHPRA for services rendered to the pharmaceutical and medical industry for 2017-18 financial year amounted to R 74,9 million. • Revenue generated for 10 months (1 April 2017 to 31 January 2018) while the Authority was known as the MCC amounted to R63,5 million. • Revenue will be accounted for and reported in the NDOH AFS and transferred to the National Revenue Fund via the NDOH. SAHPRA retained R11,4 million of revenue earned for period 1 February to 31 March 2018. • This will be accounted for in SAHPRA AFS for year ended 31 March 2019.

16. Actual Expenditure The month ending 31 August 2018 results are as follows.

17. SAHPRA Finances 2018/19 • Progress on Finance units: • Sage Pastel Partner additional licences for finance unit • Sage People HR & Payroll – System procured. To be used when staff from NDOH is transferred to SAHPRA • Existing contracts with the NDOH transferred to SAHPRA • Assets transferred to SAHPRA on 2nd August 2018 • Bank account transferred from NDOH profile to SAHPRA profile end of Oct 2018 (on-boarded at ABSA) • Critical staff member of Finance - CFO – interviews concluded

18. SAHPRA Finances 2018/19 Still required – Finance unit: • Major expenditures to be concluded in this financial year: (Included in 2018/19 Budget) • Building / Accommodation tender for new premises of SAHPRA • IT infrastructure upgrade • Additional SQL licences for payroll • Additional IT equipment to be purchased for critical staff • Service provider for HR & payroll support for critical staff (10 people) whilst SAHPRA does not have capacity • Service provider (GTAC) for corporate services • Additional ringfenced funding for ‘Backlog Project’ being sought

19. SAHPRA Finances 2018/19 Challenges faced with the industrial action at Civitas Building • SCM processes delayed as submission were not timeously attended to since protest action started April 2018 • This delayed order numbers for goods and services required and payments to suppliers • Mitigations to avoid further delays: • Corporate services assistance to capacitate SAHPRA’s procurement units

20. KEY ACHIEVEMENTS Sub-Programme 2: Governance and Compliance • Board manages its governance set out in the compliance framework and Policies of Risk, Audit and Governance. • This programme will be supported by the following offices: Board Secretary and Legal Services, strategic Planning and Monitoring, and Quality Management Systems. • Policies and Risk Registers developed

21. KEY ACHIEVEMENTS Sub-Programme 3: Information Technology and Communication • ICT Policy and Strategy developed and approved by Board. The strategy focuses on data management and digitization of functions of SAHPRA. • The domain “sahpra.org.za” was secured. • The SAHPRA Logo was approved by the Board • Website being updated • New Board Communications Committee established to strengthen public communication and support pharmacovigilance

22. KEY ACHIEVEMENTS Sub Programme 4 - Human Resources • Recruitment and Selection Policy and HR policies finalised • In process of filling critical senior posts: CEO, CFO, Director: Human Resources, Director: Information Technology and Communication, Board Secretary, Chief Regulatory Officer. • Transfer of staff • Staff Transfer Agreement signed in October 2018: Section 197 and staff formally notified of transfer October 2018

23. Procurement of SAHPRA accommodation in process • Project Working Group: x4 meetings held: made recommendations to the CEO • Core team SAHPRA MANAGEMENT TEAM • Needs analysis: Business and Space • Parking • Request For Proposal Bid specs • Financial analysis: Treasury & own budget • Recommendations to CEO • Union representatives • National Treasury, GTAC, NDoH • Budget input • SCM support • Engineer • Bid Committee setup • Lease drafting and negotiation support • Other Project Partners • Health and safety • Legal • Engineer • Project management • Tender • NDoH/National Treasury NDoH/National Treasury • Acting CEO's Office

24. EVENTS TO DATE Milestones • 2.0 Engagement with NDOH SCM • 3.0 Re-engagement with GTAC • 4.0 Bid Specification Committee 1.0 Engagement with GTAC (PPP) • 4.1 TORs being drafted • 4.2 Specs drawn up by internal Working Group to be confirmed • 2.1 Request for SCM assistance2.2 Skeleton staff (protest action) • 3.1 Request for SCM assistance with procurement of the SAHPRA accommodation • and advertisement Process timelines very tight • PPP technical assistance possibility • Letter written to the GTAC (05/09/2018) • Positive response received 8.0Measurement 6.0Bid Adjudication Committee • 5.0 BidEvaluation Committee 7.0Lease agreement • 8.1 Measure Project Performance NB Closure of Civitas means that urgent alternative accommodation must be immediately sought: Emergency discussions with labour and staff about relocation in progress

25. OTHER ACHIEVEMENTS • Collaborative relationships with other medicines regulatory authorities and regulatory bodies strengthened: • Zazibona • Pharmaceutical Inspections Cooperation scheme (PICS) • WHO • African Vaccines Regulatory Forum (AVAREF), • International Council for Harmonisation (ICH) and Veterinary International Cooperation on Harmonisation (VICH) • Regulators: Swissmedic, US FDA (Food and Drug Administration), European Medicines Agency (EMA). • Several stakeholder meetings and workshops held – • Pharma, Medical device, clinical trials and Complementary medicines industry and associations, round table discussions with CEO’s of industry • Laboratories - for the release of vaccines

26. PROGRAMME TWO: AUTHORISATION MANAGEMENT

27. PROGRAMME PURPOSE • To provide administration support necessary for SAHPRA to deliver on its mandate and comply with the relevant legislative requirements. • To co-ordinate the process of registration and/or licensing or amendment of applications in respect of medicines within a legislative framework that defines the requirements necessary for application to the Authority, to receive, record and distribute all documents submitted to SAHPRA, to manage and maintain SAHPRA’s main Registry.

28. A critical first task for SAHPRA is the clearance of the inherited medical products backlog, defined as: All applications1 submitted which are yet to receive final approval (including certification), as of 31 January 20182 1. Includes duplicates, clones, multiple doses and multiple dosage forms 2. SAHPRA was formed on 1 February 2018

29. Top facts about the backlog SAHPRA’s backlog comprises ~16,000 applications: 8,300 new registration and 7,200 variations SAHPRA’s backlog dates back to 1992 50% of the new registrations backlog is ≥5 years old (submitted 2013 or earlier) 16 applicants account for 50% of the new registrations backlog Generics comprise >90% of the new registrations backlog 15 molecules comprise 16% of the new registrations backlog, each averaging 20 applicants — which provides a batch processing opportunity Clinical applications represent 40% of the variations backlog There are 3,400 variations amendments awaiting certification: a relative “quick-win” 1 2 3 4 5 6 7 8

30. To clear the backlog within 2 years, there are three pillars to SAHPRA's backlog clearance strategy • Segment and prioritise remaining applications • Design and implement new models for evaluation • Reduce the number of applications that require evaluation • "Opt-in" for pre-2014 new registration applications • Consolidate and update all applications • Reject poor quality applications • Public health need will determine the order of evaluation • Public health risk will determine the evaluation pathway • New evaluation policies – relying on the decisions of stringent regulatory authorities • Radically improved operating model Source: BCG analysis

31. Evaluation policies • Streamlined processes • Upfront admin. and technical screening • Batch processing by API • Top-down (summary) approach to full reviews • Team-leader peer-review model • Staffed for success • New, dedicated backlog evaluation team • New positions: Application Managers, External Evaluator Coordin., Comms Manager • Improved utilisation • Digitally empowered • All re-submitted, updated applications should be electronic or eCTD • New, simple, standardised document tracking system • Published list of APIs and # of applications in backlog SAHPRA's new operating model Transparency and accountability Effective program management

32. Despite challenges, SAHPRA is making progress towards establishing an efficient, effective regulator Finding fit-for-purpose building Progressing the appointment of a new Executive Team Nearing finalisation of Section 197 transfer of staff Dramatic re-engineering / automation of Section 21 processes

33. KEY ACHIEVEMENTS • Analysed and verified the extent of the backlog • Backlog elimination strategy developed and approved by the Board • Currently working on implementation plan • The goal is to clear backlog within 2 years starting 2019 • Dedicated budget of between R 250 – 300 million required to achieve this and funds being sought from government with support of DG and Minister and from donor funding

34. PROGRAMME 3: INSPECTORATE AND REGULATORY COMPLIANCE

35. PROGRAMME PURPOSE • To ensure public access to safe or quality health products (include disclaimer) through inspections and regulatory compliance. The focus of this programme includes assessment of site compliance, with good regulatory and vigilance practices, including: • Good Manufacturing Practice (GMP); • Good Clinical Practice (GCP); • Good Warehouse Practice (GWP); • Good Distribution Practice (GDP); • Good Laboratory Practice (GLP); • Good Vigilance Practice(GVP)

36. KEY ACHIEVEMENTS • Inspections • Active Pharmaceutical Ingredient (API) • Medicine and medical device manufacturers • Wholesalers, • Pharmacovigilance • Clinical trial sites, located both locally and internationally; • Inspection and monitoring of compliance with applicable legislation as mandated (Medicines and Related Substances Act, 1965, Hazardous Substances Act, 1973). • Review of work completed in this programme is split between licensing and regulatory compliance.

37. PROGRAMME 4: MEDICINES EVALUATION AND REGISTRATION

38. PROGRAMME PURPOSE To evaluate the safety, quality and therapeutic efficacy of medicines and register them for use as per delegated authority in terms of relevant legislation as listed in the legal mandate. Functions • Management of the evaluation of applications to ensure safety, quality and efficacy of products. • Management of the registration and control of medicines. • Management of regulations pertaining to the sales of medicines. • Establishment of surveillance mechanisms to detect, assess and prevent adverse reactions to health products. • Management of the authorisation of sale of unregistered medicine for specified purposes in terms of relevant legislation. 44

39. KEY ACHIEVEMENTS • Using same approach as developed for the Backlog Project, new more efficient methods introduced for routine evaluations going forward including reliance mechanisms that take account of other international regulatory approvals • New approaches to identify and approve products of public health importance for expedited review • Evaluation of Medicines required for HIV, TB and cancer, New Chemical Entities (NCE) and biological medicines prioritized through expedited review • Appointment of expert evaluators and advisory committees for Backlog project and for new application processes • Online S21 application system (approval of unlicensed drugs required for emergencies and specific disease management) was implemented

40. PROGRAMME 5: MEDICAL DEVICES, DIAGNOSTICS AND RADIATION CONTROL

41. PROGRAMME PURPOSE To develop and maintain regulations and guidelines pertaining to the regulatory oversight of medical devices, ionizing and non-ionizing radiation emitting devices; and radioactive nucleides. Core functions for this programme include: • Licensing of medical device establishments; • Registration of medical devices and radiation emitting devices and radioactive nucleides; • Designation and supervision of conformity assessment bodies; • Conducting inspections of medical device establishments; • Post-marketing surveillance and vigilance; and • Approval of clinical trials.

42. KEY ACHIEVEMENTS • The focus of the Medical Device unit was to phase in the work of the unit as per the road map for implementing the regulation of medical device. Several workshops were held with the medical device industry • Licensing of medical device establishments is underway while concurrently developing a framework for the registration of medical devices. • The Radiation Control Unit primarily covers the registration and inspection of products and sites of Group III and IV radioactive nucleides and radiation emitting devices. • The work is split among 3 offices in Cape Town, Durban and Pretoria, and was under capacitared for many years resulting in permit backlogs. • Key posts that are not on the post establishment have been identified as critical and a strategy to fill these posts is being implemented and backlog is being addressed

43. Key Challenges and Contingency Measures Challenges Contingency Measures • Inherited backlogs for medicines and radiation control • Major delays to effect the Section 197 transfer of staff form DoH to SAHPRA. • Full autonomy from the NDOH not yet achieved • Urgent requirement for new building because of Civitas challenge • Protest action has negatively impacted on SAHPRA • Increased backlogs • Delays in appointment of key senior staff • Delays in registration of public health priority medicines- TB, HIV, Oncology, NCDs • Delay in issuing of permits: Section 21 required for patients suffering from life-threatening conditions to have access to unregistered medicines; radiation control; narcotics • Backlog project developed in consultation with industry: 2 year programme to be commenced in 2019 if funds secured from government and donor sources • SAHPRA policies developed and Corporate services assistance to capacitate SAHPRA’s procurement units in process. Section 197 staff transfer recently approved. • New building being identified as emergency intervention • Temporary relocation of critical services including Section 21: Successful automation of Section21 permits achieved • Backlog of issuing of narcotic permits addressed • Radiation Control backlog addressed – Acting Director and Acting DD appointed, experts appointed to assist with complex applications. • Pharmacovigilance & communication being strengthened

44. THANK YOU FOR YOUR ATTENTION