The South African health sector is often divided into the following areas:

Pharmaceutical and medical devices companies supply all these sectors, within applicable legal frameworks.

The size of the pharmaceutical industry is about USD3 billion, and comprises around 200 companies including subsidiaries of well-known innovative and generic companies, as well as large local generic companies. During the COVID-19 pandemic, a local company and public-private partnership, Afrigen Biologics, started developing technology to locally replicate and manufacture mRNA vaccines. Three holding companies are listed on the Johannesburg Stock Exchange (JSE). However, most companies are privately owned, largely by multinational companies.

There are few pharmaceutical start-ups and small-medium sized enterprises (SMEs), and start-ups or smaller companies tend to import or market products from larger companies or companies with no presence in South Africa.

Both private sector entities and universities are involved in research and development. South Africa has excellent clinical trial infrastructure and companies are involved in research activities. The University of Cape Town and the Medical Research Council, in partnership, has a drug discovery and development centre.

The life sciences industry benefits from a range of incentives and grants under the South African Department of Trade, Industry and Competition (DTIC). These are categorised under the:

The national health care policy provides for free primary health care for all persons irrespective of citizenship, including those with no or limited sources of income. Certain groups, including pregnant women and children younger than seven years old, receive medical care at primary health care facilities free of charge, regardless of their income. These services are fully funded by the government and ultimately paid for by taxpayers. For all other patients using the public sector, a simple means-test is used and patients are categorised and charged accordingly. Fees are generally very low, if charged at all, and do not cover the cost of providing health care, so that the bulk of public sector health care is almost exclusively subsidised by tax contributions allocated to health budgets.

State health institutions purchase medicinal products from manufacturers through a state tender system, and tenders are awarded for two years. Tenders are only awarded for medicines on the Essential Drug List (EDL) and other products deemed to be in the public interest. There is also an Essential Equipment List (EEL) but unlike pharmaceutical procurement, which takes place nationally, public health institutions procure medical devices at provincial or hospital level.

There is also a system of discretionary spend in "super-specialist" settings in the public sector, where medicines are procured.

The government introduced a Bill into Parliament in 2020 for a national health insurance scheme (NHI), funded by tax levies (for example, payroll and income tax) to provide health insurance to all South Africans. Both public and private sector health care providers will contract into the NHI, and private health insurance (medical schemes) would only provide top-up care. Consultations have been ongoing since the publication of an NHI Green Paper in 2011, and an NHI White Paper in 2015. A financing paper is awaited, but depends heavily on economic growth and employment levels, both of which remain under pressure. It seems clear that the NHI will be partially and incrementally implemented, and the role of private insurers (medical schemes) will gradually reduce. Whether and when the scheme will be implemented, covering comprehensive care for all, remains to be seen. However, many policy changes proposed by the NHI are being implemented, such as a school health system, electronic health records, and reforms in the medicines distribution system to public sector patients.

There is a transparent pricing system for medicines and related substances, which includes a single exit price (SEP) for medicines and scheduled substances, as prescribed under the Medicines and Related Substances Act No. 101 of 1965 (Medicines Act) from time to time.

The prices of all medicines sold in South Africa in the private sector are regulated under the Medicines Act. The principal legislation is the Regulations Relating to a Transparent Pricing System for Medicines and Scheduled Substances (Pricing Regulations), which only apply to medicines supplied in the private sector. Schedule 0 medicines are excluded from the pricing system.

Medicine supply to the public sector is done under a tender system under the Public Finance Management Act 1999 and the 2005 National Treasury Regulations. A Draft Procurement Bill was published in 2019 to specifically regulate procurement in the public sector but it has not yet been introduced into Parliament.

On recommendation of the pricing committee (appointed under section 22G of the Medicines Act) the Minister of Health issues regulations on, among other things, an appropriate dispensing fee charged by pharmacists. Fees levied by logistics wholesalers or distributors of medicines can also be capped, although this is not currently the case.

The prescribed SEP price is the price at which manufacturers (including importers) must sell medicines to any person other than the state. No pharmacist, wholesaler, distributor, or other person licensed under the Medicines Act can sell a medicine at a price higher than the prescribed SEP. However, pharmacists can charge a dispensing fee.

Further, under the Medicines Act, the South African Health Products Regulatory Authority (SAHPRA) can collect fees for various medicine regulatory functions, such as for a medicine registration application and an annual fee to maintain certification for a registered medicine. The fees are published in the Government Gazette, from time to time.

Once the SEP is set, it is subject to annual increases announced by the Minister of Health on recommendation of the Pricing Committee. The Ministerial determination must consider factors listed in the Pricing Regulations but is based primarily on the Consumer Price Index (CPI) and average exchange rates over the preceding period. The increase is usually between 2% and 8%, depending on exchange rate and CPI fluctuations. The decision whether to increase the price of products, and the extent of any increase, within the limits determined by the Minister of Health, is then decided by the manufacturer or importer.

No reimbursement scheme is provided for by the Medicines Act or the regulations under it. However, the national health care policy and its benefits to end-users are discussed in Question 3.

The national health care policy is funded out of the Department of Health's budget as agreed between the Department of Health and the Treasury. The supply of medicines to state hospitals is governed by a tender system in which both multinationals and generic companies participate. Products can be available outside of the tender, in particular in tertiary and academic facilities on recommendation from pharmaceutical and therapeutics committees operating in hospitals and at provincial level, subject to facility budget constraints.

Private insurers (medical schemes), which are governed by the Medical Schemes Act 1998, must cover prescribed conditions in full, and medicines used to treat these conditions must be funded in full, unless managed care interventions limit the choice or level of funding by the insurer. Medical schemes can reimburse dispensing up to the legislated dispensing fee cap, but frequently reimburse at lower levels, or appoint preferred pharmacies to supply medicines to the beneficiaries of the scheme.

Under future National Health Insurance (see Question 3), reimbursement for medicines will be set by the NHI Fund and structures established in legislation.

Pharmacists in the private sector are entitled to a dispensing fee which is capped by legislation as a fixed fee and a percentage of the SEP. No other fees or mark-ups can be charged on sold medicines. The dispensing fee is reviewed annually.

Pharmacists can also charge for other services published by the Pharmacy Council (for example, HIV counselling) but these fees are rarely levied and never reimbursed by medical schemes. Pharmacists in the public sector are employed by the state and medicines are mostly supplied free of charge.

The Medicines Act makes generic substitution mandatory. There is a definition of when a product is substitutable. It does not cover the substitution of biological products with biosimilars.

Restrictions include those relating to:

Prescription medicine can only be sold and dispensed in accordance with the prescription given to the relevant patient.

Over-the-counter medicines can be sold to the public.

Prescriptions can be electronically issued, subject to the Electronic Communications and Transactions Act.

There are no express provisions on internet, e-mail, or mail order marketing in the Medicines Act, although the Marketing Code Authority (MCA) Marketing Code contains express provisions on electronic communication and digital media.

Package inserts and patient information leaflets for prescription medicines can be included online and be accessible by members of the public provided that they are not promotional.

A (licensed) wholesaler of medicines, medical devices, or in vitro diagnostics (IVDs) can only buy from the (licensed) original importer or manufacturer (section 22H, Medicines Act).

"Round-tripping" of products and the introduction of intermediaries is not permitted. Wholesalers can only on-sell to retailers (pharmacies, hospitals, or authorised dispensers) and cannot buy from or sell to another wholesaler. An exemption can be obtained from the Director-General of Health under the Medicines Regulations for any sale made in the public interest.

Section 22A deals with selling and possession. Schedule 0 medicines can be sold to the public by any retailer (such as a supermarket) and schedules 0 to 2 medicines can be sold by a pharmacist without a prescription (section 18, Medicines Act).

Section 22A governs whether a prescription is needed, how long it is valid for, variations, and so on. The criteria for a valid prescription are listed in Regulation 33 of the General Medicines Regulations 2017.

There are specific provisions for Schedule 5 to 8 medicines. Schedule 5 (analgesics and anxiolytic, anti-depressant, or tranquillising) medicines require more than one practitioner to confirm a patient's prescription for these products.

Special permits are required to export medicines that could be abused or used in narcotics products (such as medicines containing codeine).

This section also governs non-traditional prescriber rights to prescribe certain medicines.

A wholesaler buys a product from the manufacturer or primary importer of a product. Products reach wholesalers through logistics service providers that sell the products on behalf of and in the name of the manufacturer or primary importer. Although in the same fee category under the Medicines Pricing Regulations, logistics providers (sometimes called distributors) and wholesalers differ in terms of product ownership.

Wholesalers must obtain licences from:

SAHPRA requires compliance with the principles of Good Wholesaling Practice (GWP) and the guidelines issued by SAHPRA on wholesaling licences. All wholesalers must employ a Responsible Pharmacist responsible for all aspects of product integrity. To import or export, a wholesaler must obtain an import/export licence. The specific activities authorised are indicated on the licence. The licence must be renewed every five years.

Distribution of a medicine (by an importer, distributor/logistics provider, or wholesaler) without the required licence is a criminal offence under section 29(k) of the Medicines Act.

SAHPRA has an inspectorate that inspects facilities before licences are renewed and any non-compliance must be corrected before the licence can be renewed. The SAHPRA Inspectorate may also act on information from whistleblowers or undertake routine inspections.

Section 22E of the Medicines Act empowers SAHPRA or the Director-General of Health to notify an entity that it intends to revoke or suspend a licence based on:

A licensed entity must then respond to the notice, and its licence can be revoked or suspended by SAHPRA or the Director-General of Health if the reasons provided are inadequate.

An importer must have a section 22C licence that specifically allows the import of specific schedules and types of products, for example, biological medicines or schedule 5 medicines. It is commonly called a "manufacturing" licence, although most pharmaceutical companies import products rather than manufacture them locally. There is very little difference between the criteria for a manufacturer and an importer. Over-labelling and parallel imports are classified as manufacturing activities and require a licence. However, if import rights are not granted specifically on the licence, importing activity is not permitted.

The licensing process includes inspections of sites where products are manufactured, even if they are outside South Africa. South Africa is a member of the Pharmaceutical Inspection Co-operation Scheme (PIC/S).

The main conditions for a licence include:

Details on the documentation and information to be submitted are in the General Medicines Regulations and various SAHPRA Guidelines on Licensing.

SAHPRA also requires proof of a quality system addressing all quality assurance aspects, covering:

SAHPRA has issued Guidelines for the Importation and Exportation of Medicines. It outlines when medicines can be imported, including:

The Medicines Act provides for SAHPRA to liaise with other regulatory authorities to exchange information, and also to enter into co-operation agreements including for mutual recognition.

SAHPRA aligns its policies and guidelines with those of the (among others):

Two other procedures can be used, the World Health Organisation Prequalification (WHO PQ) and the Zazibona collaborative procedure. For an application to be considered for a reliance evaluation, additional documentation must be submitted.

Parallel imports are allowed but rarely (if ever) take place. The Medicines Act allows the Minister of Health to set out conditions for parallel import of a patented medicine. This is governed by regulations issued under the Medicines Act, and specific guidelines on SAHPRA's approach to applications have been issued.

Only medicines registered under the Medicines Act that are sold outside South Africa with the consent of the patent holder for the medicine in South Africa can be parallel imported. The person importing must have an export licence from a regulatory authority recognised by SAHPRA.

An application must be made for a parallel import permit from the Minister of Health. The comparative selling price is a significant factor in the Minister's decision to grant a permit. Documentary proof must accompany the application to confirm the lowest selling price of the medicine in South Africa and the price at which the parallel imported medicine will be sold.

Once a parallel import permit is obtained an application to SAHPRA must be made to register the medicine to be imported. The following characteristics of the imported medicine must be the same as the corresponding registered and already available medicine:

The provisions of the Patents Act (on the exclusive right of the patent holder to import) and the Trade Marks Act are rendered ineffectual for the medicine for which the permit is granted (the Trade Marks Act specifically allows parallel imports).

The Medicines Act, enforced by SAHPRA and the Department of Health, has various requirements for advertising medicines or scheduled substances, medical devices, or IVDs in South Africa, for example:

The word "advertise" (or "advertisement") has a broad definition in the Medicines Act and includes:

The above advertising restrictions therefore apply to all types of advertising media.

The MCA Marketing Code sets out provisions on advertising health products in South Africa.

In addition, the South African Medical Device Industry Association (SAMED) has issued a Medical Device Code on Ethical Marketing and Business Practices which its members agree to comply with.

In addition, the Code of Advertising Practice of the Advertising Regulatory Board of South Africa (ARB Code) applies to all commercial advertising in South Africa, including the marketing and advertising of goods and services in the health care industry.

The Consumer Protection Act No. 68 of 2008 (CPA) also applies to general advertising or marketing to a consumer.

The definition of "advertise" in the Medicines Act is quite broad and includes all forms and types of advertisements (see Question 9).

The Marketing Code also includes a prohibition on "disguised" promotions (clause 5.13).

For products that, by law, can only be advertised to health care professionals, disease awareness or "help-seeking" advertisements are permitted under the Code, provided that no claims are made, no product name or brand is mentioned, and no risk information is provided. Patients and consumers can be informed that treatment is available, but the statement "For more information refer to your Healthcare Professional" must be added.

No public health programme was formally provided an exemption from the advertisement prohibition during the COVID-19 pandemic. All public and private sector (mostly non-governmental entities but not pharmaceutical companies) advertising was done within the ambit of help-seeking advertisements. No sales have been made of Covid-vaccines by the pharmaceutical industry (all sales are to the government, who then supplies to the public and private sectors).

Exemptions from any section of the Medicines Act is possible, and is mostly obtained by medical device and IVD companies in relation to the advertising prohibition. This is for products that have to be illustrated to consumers, or where consumer information is necessary so that they are informed about the implications of a product before buying it.

This is a key responsibility of the Responsible Pharmacist who has ultimate liability for compliance with the Medicines and Pharmacy Acts, including advertising and promotional campaigns. In some cases, sign-offs by compliance officers or legal counsel are required, as more than one legal framework may apply, such as the Consumer Protection Act or anti-corruption legislation.

The Marketing Code deals with approval of marketing activities and materials. Materials must be approved and re-approved every two years. The Code requires a Code Compliance Officer. In many companies this is a different person from the Responsible Pharmacist, but they report to the Responsible Pharmacist.

The Code Compliance Officer must sign off on materials and activities as compliant with the Code. This person is certified by MCA, with re-certification required every two years. The Code Compliance Officer must also obtain certification of all sales representatives. The MCA can ask for proof of such approvals and certifications and bring complaints using a nominated complainant. Detailed record-keeping obligations are set out in section 6, including materials used in advertisements or activities.

There is no pre-approval for pharmaceutical advertising.

Clause 5.8 of the Marketing Code governs comparative advertising. It permits comparative advertising within certain parameters, including that trade marks and trade names are only used with the owner's permission. Advertisements must not denigrate, disparage, be ambiguous, or mislead. They must be factual, not confusing, and subject to substantiation. Open-ended comparisons and comparisons that imply ineffectiveness or harm are not permitted.

Pharmaceutical companies are prohibited by the Medicines Act from marketing or promoting any medicine that is not registered. Doing so can be an offence under the Medicines Act.

Medical practitioners can use and inform others or discuss off-label use, in line with ethical duties under the Health Professions Act. This can happen at conferences or scientific meetings and also in medical practitioner media or informal discussions.

Unregistered medicines may qualify for compassionate use, subject to:

A medicine will only obtain a private sector price after it is registered, therefore off-label or unregistered product pricing cannot take place. In reality, pharmaceutical companies start discussions with medical schemes (private insurers) before registration and also discuss price and reimbursement. They might also discuss this in public sector facilities, where state tenders may call for the products in the future. Such discussions have never been deemed off-label or to constitute advertisement under section 18 of the Medicines Act.

There are no specific rules in the Medicines Act or Medicines Regulations for the use of the internet and social media for advertising pharmaceuticals, so the rules for hard-copy advertisements apply. Social media advertisements relating to products that can only be advertised to health care professionals are prohibited unless they can be electronically restricted.

However, the Marketing Code contains provisions on how, for example, referencing and substantiation should take place if internet or electronic media is used.

Where patient/direct to consumer advertisements have been approved, SAHPRA advises compliance with the Protection of Personal Information Act 2013, specifically the cookie policy for internet-based advertisements.

For non-compliance with the Medicines Act, a complaint can be lodged with SAHPRA and its inspectorate and enforcement unit can investigate. Violations of section 18 (and the corresponding Regulation 42) of the Medicines Act on labels and advertisements can be prosecuted as criminal offences and can also lead to product de-registration and non-compliance with licensing conditions, leading to licences being revoked or suspended under section 22E.

However, most cases are handled by the self-regulatory system under the Marketing Code for pharmaceuticals, or under the SAMED Business Code for medical devices and IVDs. SAHPRA may even refer cases to the MCA or SAMED.

There are restrictions on the advertisement and sale of prescription and over-the-counter medication (see Question 9).

Off-label marketing of any medicine is prohibited, and advertising must be within the ambit of the information submitted to SAHPRA for product registration (or amendment) (Regulation 42, Medicines Regulations). However, section 18 permits the prices of products to be made public.

In general, advertisements must not mislead or disparage either directly or by implication. Information claims and comparisons must be accurate, balanced, fair, objective, unambiguous, and supportable, and must be based on an up-to-date evaluation of all the evidence and reflect that evidence clearly. The use of medical terminology is acceptable provided that this does not confuse or mislead the consumer.

In addition, there are specific provisions for marketing and promotion of medicines directly to the public, including that it:

Generally, advertising to both medical practitioners and the public must not conflict with the information (as incorporated into the package insert) submitted in support of the application to register the medicine with SAHPRA in relation to its safety, efficacy, and quality.

Where a medicine includes more than one active ingredient, no reference can be made to the specific properties of any specific active ingredient unless that reference has been approved by SAHPRA for inclusion in the package insert.

Providing free samples to the public is not permitted. Section 18A of the Medicines Act prohibits bonuses, rebates, and incentive schemes relating to any medicine, medical device or IVD. Section 18B prohibits sampling, which is defined as any "free supply" of any medicine, medical device, or IVD. These prohibitions apply throughout the supply chain (manufacturer/importer, distributor, wholesaler, and retailers/hospitals) and in the public and private sectors.

Sections 18A and 18B of the Medicines Act have been the subject of section 36 exemptions for medical devices and IVDs. This means that they have not applied to medical devices and IVDs, and the latest exemption ends in December 2023. However, section 18A and section 18B do apply to medicines as strict prohibitions carrying criminal sanctions.

The Marketing Code contains the following provisions:

Record-keeping of all consultancy arrangements is required under the Marketing Code.

All persons registered with health care professional councils are health care professionals. This includes persons registered under the:

Not all of these health care professionals have prescription rights, although some may be granted such rights by their professional councils under these laws and subject to a permit under section 22A(15) of the Medicines Act.

When advertising can be made to a health care professional (see Question 9) the advertisement must be limited to the product's approved label and contain the following information:

Any advertisements for complementary medicines that are not yet registered must include the phrase "This unregistered medicine has not been evaluated by SAHPRA for its quality, safety or intended use".

The provision of a medicine under any incentive scheme is prohibited.

The Prevention and Combating of Corrupt Activities Act 12 of 2004 sets out certain offences for bribery and other corrupt activities relating to public officers. Although it does not deal with the life sciences industry specifically, it may be relevant if there are suspected corruption or bribery activities in a public health establishment such as a state hospital.

Other national legislation that contains or relates to anti-corruption provisions includes the:

The MCA Marketing Code provides that, in general, no gift, benefit in kind, rebate, discount, kickback, or any other pecuniary advantage can be offered or given to health professionals, administrative staff, government officials, or the public as an inducement to prescribe, lease, loan, supply, stock, dispense, administer, or buy any health product. There are similar provisions in the Health Professions Council of South Africa's Policy on Perverse Incentives. However, occasional promotional aids or items (such as pens and pads) gifted to health care professionals, appropriate administrative staff, sales, and other staff are acceptable, provided that they are all the following:

Alignment with global pharmaceutical codes has led to the prohibition of any gift or promotional aid that could be deemed to be part of the running costs of a practice. Cash gifts or cash equivalents (such as vouchers) are not allowed.

Companies, organisations, or individuals are permitted to organise or sponsor meetings and events provided that, among other things:

The sponsorship of any stand-alone social or entertainment event is not permitted.

The engagement of a health care professional to provide genuine consultancy or other genuine services to a company is permitted under certain conditions. Health care professionals who provide consulting services to a company and are still practising their profession must declare their employment arrangement with the company whenever they write or speak in public about a matter that is the subject of the employment or any other issue relating to that company. The arrangement must be formalised in a written agreement, which can be subject to scrutiny by the MCA and the SAMED Code.

The Health Professions Council Business Practices Policy 2015 and Perverse Incentives Policy 2008 also apply to the relationship between the industry and health care professionals.

There is no such law in South Africa. However, the Marketing Code states that documents underpinning any contract must be available and requires record-keeping in terms of gifts and the like. A complaint by one member of the Marketing Code against another member may therefore trigger disclosure to the MCA as part of its handling of the complaint.

Breaches of section 18A of the Medicines Act are offences and offenders can be liable for a fine and imprisonment. Registration certificates and licences may also be at risk, as compliance with the Medicines Act is a condition of registration and a licence.

Non-compliance with the Marketing Code can lead to the withdrawal of product materials, issuing corrective statements, apologies, and fines.

Patent protection is governed by the Patents Act No. 57 of 1978, as amended (Patents Act) and regulations issued under it. The Patents Act provides that a patent can be granted for any invention that is:

Protection granted through patent registration extends to the invention as it is claimed in the patent specification. Under the Patents Act, any claim directed to a process (or apparatus) for producing a product extends to that product when produced by the process (or apparatus) claimed.

The main excluded categories are:

The concept of an invention is not strictly defined but the legislation lists a number of exclusions. Medicines and related substances (such as active pharmaceutical agents) are not listed as an excluded category. Medicines and related substances and the processes by which they are obtained are therefore patentable under the Patents Act.

The Patents Act provides that an invention consisting of a substance or composition "for use in a method of treatment" of the human or animal body can be patented, even though the substance (or substances) in the composition is previously known. The first medical use of a known substance is therefore patentable but the substance itself cannot be protected a second time.

Second and subsequent medical uses of known substances can be protected through Swiss form claim formats.

Methods of treatment of the human or animal body by way of surgery or therapy or of diagnosis practised on the human or animal body are not patentable.

Similarly, any variety of animal or plant or any essentially biological process for the production of animals or plants is not patentable, unless the process is a micro-biological process or the product of a micro-biological process.

It is possible to patent a pharmaceutical active agent, a pharmaceutical product containing the active agent, and/or a process for manufacturing the product or agent, provided that these comply with the patentability requirements (see above, Conditions and Legislation).

Application is made to the Companies and Intellectual Property Commission (CIPC). The application fee (excluding professional fees of a local agent for the application) is about ZAR590. Guidance on the application procedure and fees is available on the CIPC website.

The Patent Office takes about six to eight months to examine an application and accept or reject the specification. There is no substantive examination. Once the formal requirements have been met, the specification is accepted and notification of the patent is published in the Patent Journal. This publication constitutes the grant of the patent.

There is no provision to oppose pending or granted patent applications. However, at any stage after the grant of a patent, any person can apply to the Registrar of Patents to revoke the patent on one or more of a number of statutory grounds for invalidity. If the revocation proceeds, it is determined before the Court of the Commissioner of Patents, a special court in the High Court with national jurisdiction at first instance in all patent litigation matters.

The patent application process can be expedited on payment of a fee.

Acceptance of the specification in a South African national phase application based on an international (PCT) patent application can be delayed as of right for up to 15 months from national entry date. Further extensions are at the discretion of the Registrar of Patents (who can grant a request for delay indefinitely, but generally in 12-month increments).

A patent is valid for 20 years from its effective filing date.

The filing date differs depending on whether the application is made under the WIPO Paris Convention for the Protection of Industrial Property 1883 (Paris Convention) or the Patent Cooperation Treaty 1970 (PCT system) (see Question 28).

Renewal fees are paid annually and the patent cannot be extended once it has expired.

There is no provision to extend the term of a patent or extend the monopoly rights that it confers. South Africa does not provide for any form of patent term extension (for example, supplementary protection certificates).

There are no statutory provisions in South African patent law or in the medical regulatory laws that specifically deal with data package exclusivity. However, provisions on the protection of confidential information in general may be used in this respect.

The effect of a patent is to grant to the patentee for the duration of the patent the right to exclude others from making, using, exercising, disposing, or offering to dispose of or importing the patented invention in South Africa, so that the patentee has and enjoys the whole profit and advantage accruing by reason of the patented invention.

A patent is infringed when any person, without the patent owner's consent, carries out acts in South Africa that are exclusively reserved under the Patents Act for the patent owner. This includes:

The main defences are non-infringement or invalidity of the patent. Various grounds for invalidity of the patent exist including:

Research exemption. There is no specific research exemption but arguments exist that academic research does not relate to commercial exploitation of the patented invention.

Bolar exemption. The Patents Act provides for a Bolar provision (section 69A) for the non-commercial working of a patented invention and solely for purposes reasonably related to obtaining, developing, and submitting information required for regulatory purposes in respect of the manufacture, production, distribution, use, or sale of any product, including pharmaceuticals. Stockpiling is not allowed.

IP exhaustion. Local exhaustion of rights applies, except where the patented invention is disposed of internationally without any restrictions as to the territory of use.

South Africa is a party to various international treaties that facilitate the recognition of foreign IPRs, including the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

South Africa is a longstanding member to the Paris Convention and the Patent Cooperation Treaty 1970 (PCT).

A medicinal product brand complying with the following requirements can be registered as a trade mark.

Trade mark protection is governed by the Trade Marks Act No. 194 of 1993, as amended (Trade Marks Act) and the regulations issued under it. A trade mark is defined as any sign capable of being represented graphically and includes, among other things, a name, signature, word, or numeral.

To be registered under the Trade Marks Act, a trade mark must distinguish the goods or services for which it is registered (or proposed to be registered) from the goods or services of another person.

A trade mark is capable of distinguishing the goods or services if it is either (at the date of application for registration) inherently distinctive or capable of distinguishing by reason of prior use.

The Trade Marks Act also provides that a mark which is contrary to law or good morals cannot be registered as a trade mark.

Applications are made to CIPC, to the Registrar of Trade Marks. The application fee is ZAR590 per application filed, per class (excluding any professional charges of a professional firm for the matter). Guidance on the trade mark application procedure and fees is available on the CIPC website.

Once filed, the application is examined to determine whether it both:

It takes about nine to 12 months for the Registrar of Trade Marks to examine a trade mark application and issue a report on the examination. The Registrar will accept, reject, or provisionally refuse the application. A preliminary refusal will indicate any conditions subject to which the application can be accepted. The applicant can then make representations to address and overcome the Registrar's concerns.

Once a trade mark application is accepted, it is advertised for opposition purposes in the Patent Journal. If no objections are raised by third parties within the three-month period from the date it is advertised, the trade mark is granted and a certificate of registration issued within about six months from the date the opposition period expires.

The Competition Act applies to all agreements concluded or having an effect in South Africa, irrespective of the sector.

In relation to licensing and technology transfer, notice must also be taken of the Patents Act, which includes provisions aimed at preventing an unfair distortion of competition through the exercise of a patent.

Sector-specific competition law issues include:

The Competition Act is enforced by the Competition Commission.

Refusals to license and the question of compulsory licensing of a patent, in the context of an essential facility and dominance, have arisen but have not progressed to the Competition Tribunal. There is therefore no case law on this point. Other abuses of dominance have arisen in the context of pharmaceutical products and excessive pricing.

From a competition law point of view, patent settlement agreements that include pay-for-delay or similar clauses are likely to be considered anti-competitive. Agreements are also likely to be anti-competitive where they result in market allocation, market division, or fixing of a trading condition.

In relation to authorised generics, and their introduction during the pendency of a patent, the application of competition law is only triggered in case of dominance. Where dominance can be established, it is necessary to consider whether the introduction of an authorised generic results in an exclusionary act. This finding would be difficult given the Supreme Court of Appeal's apparent approval in Cipla Medpro (Pty) Ltd v Aventis Pharma SA, Aventis Pharma SA and Others v Cipla Life Sciences (Pty) Ltd and Others (139/2012, 138/2012) [2012] ZASCA 108; 2013 (4) SA 579 (SCA) (26 July 2012). The court stated that "Bearing in mind the commercial advantage of first-entry to the generics market, it is common for a patentee of a pharmaceutical product to enter the market shortly before its patent expires with an alternative product that will compete with anticipated generics".

Licence agreements that contain royalty payments paid to a foreign entity must be approved by the Department of Trade and Industry.

Foreign payments of royalties are subject to exchange control approval by the South African Reserve Bank.

SAHPRA can declare a medicine "undesirable" if it believes that it is not in the public interest for the medicine to be made available to the public (section 23, Medicines Act). In those circumstances, SAHPRA can, by notice in writing, direct any person to return such medicine to the manufacturer or, in the case of an imported medicine, to the importer or to deliver to any other designated person. SAHPRA can also require information to be supplied under sections 19 and 22 of the Medicines Act.

Further, SAHPRA can conduct an investigation into a medicine if:

(Regulation 39, Medicines Regulations.)

An inspector authorised under the Medicines Act can seize a medicine if it has been declared as undesirable by SAHPRA.

At common law, a claim for a defective product is based on delict (a tort), and the defendant's fault must be proved.

Liability for defective products, including medicinal products, is also imposed on manufacturers to protect consumers from personal injury. The principal legislation is the CPA. The main effect of the CPA is that it imposes strict liability in relation to defective products. The CPA provides that a producer, importer, distributor, or retailer of any goods is liable for any harm, caused wholly or partly, as a consequence of:

This liability only extends to three years after the product was used.

Under the CPA, there must be a causal link between the defect and the harm suffered. Fault is not a requirement for the strict liability offence created under the CPA.

There are two principal types of defect in South African law based on:

The CPA imposes the "consumer expectations" standard. The basic test for defectiveness is whether there is any:

The harm for which liability will arise includes:

The following parties are liable for any harm caused by a defective product:

The term producer is widely defined, and includes the manufacturer or producer of the defective product, or person(s) applying their name or trade mark to the defective product. A distributor is defined as a person who, in the ordinary course of a business, is supplied with the defective product and in turn supplies it to another distributor or retailer.

The court has authority to:

Companies take out product liability insurance, and pharmacy retailers, hospitals, and prescribers also have professional indemnity insurance/cover.

When supplying medicines to the state sector, tender contracts make the bidder liable. Malpractice litigation against professionals and health facilities, including the public sector, is fairly common, while lawsuits on the basis of harm caused by a medicine are rare. Claims for harm during clinical trials occur but rarely lead to litigation.

Under the common law, a variety of defences can be raised by the defendant to show the absence of fault on their part.

Under the CPA, liability does not arise in the following instances:

The limitation period generally is three years from the date the claimant becomes aware of the damage.

The CPA allows consumer protection groups to take steps to protect the interests of an individual consumer or a group of consumers collectively. However, any group must be accredited by the National Consumer Commission.

Section 76(1)(c) of the CPA specifically contemplates the award of damages in a class action. It states that a court can award damages against a supplier for collective injury to all or a class of consumers generally, to be paid on such terms as the court considers just and equitable and suitable to achieve the CPA's purposes. However, since this kind of action is novel in South African law, it remains to be seen how the courts will deal with them.

For both common law claims and claims brought under the CPA, the remedy is damages for the harm caused by the defective product. No provision is made in South African law for punitive damages. The claimant is limited to the damage that they can prove was actually suffered.