Court sets aside R12.6bn HIV pill contracts and orders health department to redo the tender

The Pretoria High Court has declared the two largest contracts in the national health department's R15.5bn antiretroviral tender unconstitutional and invalid, and given the department 120 days to award them again.

The contracts, worth a combined R12.63bn, cover monthly and three-monthly packs of TLD, the single daily pill that combines tenofovir, lamivudine and dolutegravir. It is the first-choice HIV treatment for adults in the public sector, where about 5.7 million people are on treatment, according to Treasury figures cited by Business Day.

Acting Judge Graham Girdwood handed down the ruling on Tuesday, 20 October, in challenges brought separately by Cipla Medpro Manufacturing and Hetero Drugs South Africa and later heard together. The tender took effect in December 2025.

Supply continues while bids are redone

The order does not stop deliveries. The setting aside is suspended until 90 days after the department finalises the new awards, so current suppliers keep delivering in the meantime. Cipla Africa chief executive Paul Miller welcomed that provision and said the company remains "committed to engaging constructively" with the department.

The department must reconsider the eligible bids and revise how the volumes are split between suppliers.

What the court found

According to reports of the judgment by GroundUp and Business Day, Viatris and Innovata should have been disqualified at the start, because neither held a valid licence for its manufacturing site when bids closed. "A licence that has expired is not, and was not on bid closure date, a valid licence," the judge wrote. Both are excluded from the reconsideration.

Cipla was unfairly shut out of the main contracts. It had been excluded for pricing more than 10% above the highest-scoring bidder, a rule the department had not disclosed to bidders, and the court found that arbitrary and irrational. Cipla received only three smaller awards worth R215m and must now be included when the bids are reconsidered.

Barrs and Aurobindo were wrongly given local manufacturing status, and their final prices must revert to the levels they bid before negotiation.

The department also accepted ownership claims by Innovata and Barrs that earned them historically disadvantaged individual (HDI) points without checking them. Those points must be removed. Both companies were held by Avacare when they bid, and the department must investigate whether they prepared their bids independently.

The department had disqualified Hetero on suspicion of collusive bidding with another company, Q-Sol, and referred it to the Competition Commission. The court dismissed Hetero's application and ordered it to pay costs on a punitive scale. The judge said the department had a "reasonable, rational suspicion of collusive bidding", but that the review was not the place to decide whether Hetero had in fact colluded.

The minister and director-general were ordered to pay Cipla's costs.

Who holds the contracts now

The winning bidders on both pack contracts were Aspen, Emcure, Innovata, Barrs, MacLeods, Viatris and Aurobindo, with Pharma Dynamics sharing the monthly contract only.

GroundUp reports that Innovata and Barrs, both Avacare subsidiaries, went into business rescue in December 2025 and have since exited it. Barrs ran out of stock of both items it was meant to supply days after entering business rescue. The court also found that Innovata's past performance had been wrongly disregarded.

The department's response

Health department spokesperson Foster Mohale told Business Day that the department is consulting its legal team on the judgment. "The department is assessing the feasibility of the timeframes stipulated in the court order," he said. It will decide on next steps after those consultations.

The industry body Pharmaceuticals Made in SA (Pharmisa) said the ruling backs concerns it raised earlier about bidders misrepresenting B-BBEE and local manufacturing credentials. Its chair, Stavros Nicolaou, said he hoped for "transparency and consistency in tenders moving forward".

Hetero did not respond to Business Day's request for comment.

What patients need to know

Nothing changes at the clinic counter for now. People on TLD should keep collecting and taking their treatment as prescribed. The court built in the 90-day buffer to avoid supply disruption, and the current contracts stay in force until the new awards take effect.

What happens next depends on whether the department can meet the 120-day deadline, or chooses to appeal.