Business Unit Review
SOUTH AFRICAN BUSINESS: Pharmaceutical Division – continued
Marketing and distribution contracts with multi-national pharmaceutical companies, GlaxoSmithKline South Africa (Pty) Ltd (“GSK South Africa”) and Novartis South Africa (Pty) Ltd (“Novartis South Africa”) have continued to perform to expectation despite significant competition. Generic substitution has however impacted negatively on the products included in the AstraZeneca Pharmaceuticals (Pty) Ltd (“AstraZeneca”) contract, reducing both profitability and volumes. Leader in public sector supply Aspen increased volumes on award of the most recent South African public sector tenders for pharmaceutical supply (excluding ARVs) which commenced in October 2005. Aspen remains the leading supplier of generic medicines to the public sector. Business was however gained at reduced margins and the overall contribution from the public sector declined slightly for the year.
ARV exports into Africa contributed over R100 million to revenue. ARVs supplied to the public sector recorded revenues of R83 million, a four-fold increase on the prior year.
Placed first in OTC ranking For the third consecutive year, Aspen OTC was placed first in the nationwide Campbell Belman Confidence Standing Survey, an independent survey of retail pharmacies and buying groups published in December 2005. Significant volume growth over the previous year was recorded by OTC products assisted by a successful winter campaign incorporating the Bear CareTM concept. New OTC product launches include Clarinese, Endcol effervescent tablets, Flusin sinus tablets, Flutex effervescent tablets, Ibumol suspension and Somnil drops. Aspen’s performance in the managed healthcare arena was once again independently acknowledged in the 2006 Campbell Belman Confidence Standing Survey which rated Aspen second amongst managed healthcare providers and third amongst funders. Aspen was the only generics company to feature in the top 10. This is a significant achievement as it represents a move from seventh place amongst funders in the prior year. ARV revenue growth Aspen continues its commitment to fighting HIV/AIDS. Aspen’s penetration of the ARV market has yielded pleasing results. ARV revenue contribution to the Group has increased to R266 million. This represents a rise from 2% of total revenue in the prior year to 8% of total revenue in the current year. ARV exports into Africa contributed over R100 million to revenue. ARVs supplied to the public sector recorded revenues of R83 million, a four-fold increase on the prior year. Private sector sales of ARVs were R79 million. Aspen’s ARVs presently cover the lives of an estimated 300 000 patients. Aspen’s ARV basket is comprised of Aspen Stavudine, Aspen Didanosine, Aspen
Aspen Annual Report 2006