South Africa’s AIDS Drug Tender Controversy has escalated in Parliament, after Health Minister Dr Aaron Motsoaledi sought to distance himself from the department’s latest antiretroviral procurement saga. He told MPs that director-general Sandile Buthelezi, as the department’s accounting officer, carries full responsibility for procurement sign-off. This includes the R15.5bn AIDS drug tender announced in August.
The tender covers the three-in-one pill used by most HIV patients, commonly referred to as TLD (tenofovir, lamivudine and dolutegravir). Pressure mounted after it emerged that two companies awarded key portions of the contract, Barrs and Innovata, entered business rescue shortly after the supply period began on 1 December 2025. Furthermore, the two firms entered business rescue on 9 December 2025, prompting urgent contingency planning to avoid treatment disruptions.
AIDS Drug Tender Controversy Puts Due Diligence Under the Microscope
MPs used the committee session to probe how bid evaluators failed to detect financial distress at bidders linked to Avacare Health. Motsoaledi argued that the department does not routinely scrutinise company financial statements because it lacks in-house capacity. Additionally, outsourcing the work would be too costly relative to the perceived risk of supplier failure.
Senior officials reinforced that position. The department’s chief financial officer confirmed that the bid adjudication committee did not review bidders’ balance sheets. Officials also said the National Treasury, which previously oversaw pharmaceutical tenders, did not require financial statements in its own processes.
That explanation did not satisfy all parties. DA MP Michele Clarke argued that public finance rules require more rigorous checks on financial capacity before contracts are awarded. Meanwhile, EFF MP Naledi Chirwa challenged the “no capacity” claim, pointing to other tenders in which proof of financial capability was required. She also called for the Special Investigating Unit to probe what happened.
How the AIDS Drug Tender Controversy Hits Supply Risk and Market Confidence
For providers and funders, the immediate concern is continuity of ARV supply. The Health Department has said it moved quickly to secure alternative suppliers. This action aimed to prevent disruptions after Barrs and Innovata were unable to meet their obligations.
The dispute also lands in a sensitive part of the pharma value chain. Large, multi-year tenders shape manufacturing runs, working capital needs, and pricing dynamics. When winners slide into business rescue days into a contract cycle, the risk travels down to distributors and clinics. Ultimately, it impacts patients.
The controversy is not happening in isolation. The tender has been the subject of disputes since the awards were announced. This includes complaints from local manufacturers and litigation involving Hetero SA. Separately, the Competition Commission opened an investigation into Hetero SA after a complaint by the Health Department alleging price collusion.
In a further twist, Barrs later exited business rescue after selling a controlling stake to Hetero South Africa. This deal was reported to be worth R92m for 78% of the shares. That development has been framed as supporting continuity of supply. However, it will keep attention on governance, bidder screening, and competition risks in the ARV market.
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