To establish a portfolio of investments, BioVentures, South Africa's first niche biotechnology and life sciences venture capital fund, looked for South African start-ups with proprietary technology that gives them a competitive advantage; a large, growing and preferably international market; multiple products and markets rather than a single product and market; and a quality and balanced management team. This article considers these points in more detail to create a checklist for divestiture preparation or asset hunting.
Health Minister Aaron Motsoaledi recently implemented various changes to Schedules 4, 6 and 7 of the Medicines Act in relation to cannabis and its related components. Although amendments to the Drugs and Drug Trafficking Act remain to be seen, the recent changes to the Medicines Act are a step in the right direction and a significant contribution to the rights of adults to cultivate, possess and use cannabis in private.
On the recommendation of the South African Health Products Authority, the minister of health recently issued Government Gazette 43346, which essentially exempts, under Section 36(1) of the Medicines and Related Substances Act, the free supply of medicines, medical devices and in vitro diagnostics to the state for three years. This exemption also extends to the supply of samples to the state as part of a tender published by the state.
The European Patent Office Enlarged Board of Appeal may have ended the debate on the patentability of plants and animals which are exclusively obtained by essentially biological processes by ruling that these are not patentable. If South Africa follows the board's interpretation, where essentially biological processes such as natural breeding techniques have been used to produce a plant or animal product, such a plant or animal product (and the process for producing the plant or animal) will not be patentable.
There have been a number of key developments in South African life sciences law relating to cannabis in recent years, including amendments to the Medicines and Related Substances Act 1965, such that products which contain only cannabidiol – when intended for therapeutic purposes – can now be obtained from a pharmacist by prescription. Further, cannabis-related trademark applications will now be accepted on the condition that the products comply with the standards set by the health minister.
The National Health Insurance (NHI) scheme, which is set to come into force on 1 January 2026, will centralise the purchasing of healthcare services in a single body established by the government: the National Health Insurance Fund. The proposed link between the NHI scheme's full implementation and the arbitrary date of 1 January 2026 may be irrational considering the risk of the requisite infrastructure not being sufficiently in place by such date.
South Africa is in the process of reviewing all existing IP laws, particularly in the context of access to medicines. It appears that the type of changes to be made in respect of the Bolar exception will relate to whether the narrow exception should be extended and, if so, to what. In particular, it is likely that an early experimental research exclusion will be included, such as for pre-clinical research. It remains to be seen whether South Africa's laws may change to allow stockpiling of generic medicines.
A recent European Court of Justice ruling on the status of organisms obtained by new breeding techniques as genetically modified organisms (GMOs) has again brought the scope of the South African GMOs Act into question. The difficulty with regulating organisms created through such techniques is that these organisms may be indistinguishable from organisms which have naturally evolved.
In October 2018 the draft National Biodiversity Framework (NBF) was published for public comment. Considering that South Africa is the third most biodiverse country in the world, the government, as custodian of the country's biodiversity, has implemented approximately 30 national strategies, frameworks and systems in the biodiversity sector. The NBF's purpose is to coordinate and align the efforts of the many organisations and persons involved in the complex interplay between these strategies.
Cannabis has enjoyed heightened attention following a recent ruling decriminalising the private possession, consumption and cultivation of the plant for recreational purposes. While there have been several positive developments in the promotion of the medical cannabis market in South Africa, the overarching regulatory framework and authorities' current practice remain barriers to entry for prospective local players in the medical cannabis product manufacturing market.
The Biodiversity Act regulates bioprospecting on and biotrade with indigenous biological resources and indigenous genetic resources and the use of traditional knowledge. Although the early years of regulation under the act were stormy and there was much confusion over who needed to apply for permits and what was required from applicants, there is now more certainty as to what is required.
The legal and philosophical issues relating to the concept of ownership of various kinds of human biological material has been hotly debated. This is an emotive topic that requires balancing societal and commercial interests with individuals' rights, such as the constitutional right to bodily and psychological integrity, which includes the right not to be subjected to medical research or scientific experiments without giving informed consent.
The Genetically Modified Organisms (GMO) Act provides the requirements to ensure the responsible development, production, use and application of GMOs. Any entity or person planning to perform a regulated activity under the act must prepare an application to the registrar and pay the application fee. Regulated activities include activities involving genetic modification, the experimental or trial release of a GMO, the contained use of a GMO and the general release of or commodity clearance regarding a GMO.
The South African government has focused on biopharming as a means of developing the bioeconomy for more than a decade. In addition, different government departments have already implemented legislation concerning plant-based protein production. Given this infrastructure and the highly active local biopharming research community, South Africa is considered a promising jurisdiction for the production of plant-based therapeutic proteins, with many possible opportunities for investment and collaboration.
The South African minister of health has called for public comment on the recently published Draft General Regulations Relating to Bonusing. The draft regulations aim to flesh out Section 18A of the Medicines Act, which prohibits the supply of any medicine, medical device or in vitro diagnostic medical device that is subject to a bonus system, rebate system or any other incentive scheme.
The recently published Draft IP Policy Phase 1 2017 includes a number of provisions relating to parallel import and state 'walk-in' rights for access to affordable medicines. Although there are complex issues surrounding access to affordable medicines, the inclusive process that the government has used in the implementation of the new policy is encouraging.
The keenly anticipated draft IP Policy Phase 1 (2017) was recently published for public comment. It constitutes the first phase in the implementation of a comprehensive IP policy for South Africa. One of the key issues to be addressed is the interplay between the constitutional rights relating to property and access to healthcare. According to the policy, the scope of compulsory licences will be strengthened and clarified in an effort to facilitate the process of exporting IP goods, such as medicines.
South African pharmaceutical product litigation case law provides no particular test that refers to the doctrine of equivalents. However, when interpreting the scope of patent claims, the courts may hold that a claim extends to obviously substituted equivalents in the infringing product or process that are not literally provided for in the specification and claims. As such, a pharmaceutical product or process with chemical equivalents may also be considered to constitute infringement.
In South Africa, gene editing techniques have and are being used in research studies for therapy with adult human cells. However, the ethical concerns around somatic gene editing therapy are less controversial than with germline therapy. At present, the modification of a human embryo's germline for therapeutic purposes culminating in the reproduction of a human being is prohibited. Germline editing for research purposes might be permitted, but would require conditional ministerial approval.