Assessing the micro-economic impact of HIV/AIDS on a South African pharmaceutical manufacturer as well as evaluating their policy on HIV/AIDS

Ludick, Christopher Vernon (2004-03)

Thesis (MBA)--Stellenbosch University, 2004.

Thesis

ENGLISH ABSTRACT: HIV infection has increased sharply in SA over the past decade, from almost zero to a level where between 4-6 million citizens are estimated to be HIV positive (i.e. around Il percent of the total population). Given the considerable lag and link between the HIV and AIDS epidemic, the mortality consequences of this exponential increase in HIV infection over the 1990s are more or less matter-of-fact over the coming decade; even drastic interventions can do little to avoid this reality, albeit possibly impactingfurther beyond. The health care industry, and more specifically the pharmaceutical industry, is the only industry that can have a direct impact on the outcome of the epidemic in terms of provision of antiretroviral drugs. More importantly, the decision by multinational companies to provide voluntary licensing to local SA pharmaceutical manufacturers for the manufacturing of generic ARVs has gone a long way into achieving the World Health Organisations' objective of providing an ARV cocktail for less than $1,00 per day. The mam aim of the study is to establish and study the micro-economic effect of HIV/AIDS on a South African pharmaceutical manufacturer and to evaluate their HIV/AIDS Policy with the framework of the mV/AIDS & SID Strategie Plan for South Africa 2000-2005. Both qualitative and quantitative methods were used to obtain data from various key informants, manufacturers and market survey companies. The analysis of quantitative data was done using Excel software and a descriptive analysis method was used to interpret the data. The key findings from the study are that Aspen Pharmacare will experience a 20,8 % HIV prevalence rate in 2005, which will progressively increase to a 25,6 % level in 2015. This prevalence level will be severely experienced in the skilled, semi-skilled and unskilled employment of the company during the 2010 period and will start to stabilise in the latter part of 2015. The AIDS prevalence in the company will increase from a 2,0 % level in 2005 to a 4,4 % level in 2015. This increase is largely due to the increase in the prevalence rates in the semi-skilled and unskilled employees. At a senior management level the forecasted number of employees that will have clinical AIDS after 2010 is between 6 and 8. This clearly indicates that mv/AIDS prevalence at this level is independent of race and is lifestyle dependent. If the company were to have the full responsibility for the provision of benefits, based on the current expected employee benefit structures, the direct cost to company would add 10 % to salary and wages by 2005 and around 20 % by 2010. Indirect costs to company, such as recruitment and training, increased labour turnover, lost skills and intellectual property, etc. are estimated to be 2,5 % by 2005 and 5 % by 2010. With the high HIV/AIDS prevalence rates, especially amongst the unemployed, companies will have to carry the costs of their mv/AIDS patients for longer and register then with Aid for AIDS when it becomes too costly. More importantly employers will have to investigate the cost implication of assisting employee dependents, as this will have a direct impact on the morale of the employees. Aspen Pharmacares' mv/AIDS Policy goes beyond the requirements of the mv/AIDS Strategic Plan for SA in terms of the legal and social requirements. The company also has a Corporate Social Investment division that assists many NGOs, clinics, hospitals and communities. Based on the intellectual property, the pharmaceutical competencies and the continuous dialogue that exists between the pharmaceutical industry and the department of health, the researcher concludes, that pharmaceutical companies have an advantage over nonpharmaceutical companies in dealing with the mv/AIDS issues. The paper concludes by suggesting recommendations that companies can adopt to ensure that their mv/AIDS policy can form a significant component of their skills retention strategy.

AFRIKAANSE OPSOMMING: MIV infeksie het skerp gestyg in SA oor die laaste dekade, vanaf amper geen tot 'n vlak waar tussen 4-6 miljoen inwoners beraam word om MIV positiefte wees (minstens 11% van die totale bevolking). Gegee die aansienlike vertraging en skakel tussen die MIV en VIGS epidemie, word die eksponensiële toename in die sterfte syfer as gevolg van MIV infeksies gedurende die jare negentig as vanselfsprekend aanvaar in die komende dekade. Selfs ingrypende veranderinge kan min doen om hierdie katastrofe te keer. Die gesondheidsorg industrie, en meer spesifiek die farmaseutiese industrie is die enigste industrie wat 'n direkte slag kan slaan om die uitkoms van die epidemie te beinvloed, in terme van voorsiening van antiretrovirale medisyne. Die besluit van die multinasionale maatskappye om vrywillige lisensiëring aan plaaslike farmaseutiese maatskappye te bied, vir die vervaardiging van generiese antiretrovirale medisyne, is een stap vorentoe om by die doelwit van die Wereld Gesondheidsorg Organisasie se doelwit van die voorsiening van 'n daaglikse toediening van antiretrovirale medisyne van minder as $1.00 per dag. Die primêre doelwit van hierdie projek is om te bepaal wat die mikro-ekonomiese effek van MIV/VIGS op 'n Suid Afriakaanse farmaseutiese vervaardiger is en hul MIV/VIGS beleid te evalueer binne die raamwerk van die MIV/VIGS en SOS Strategiese Plan vir SA 2000-2005. Beide kwalitatiewe en kwantitatiewe metodes is gebruik om data te verkry vanaf verskeie bronne, vervaardigers en marknavorsings maatskappye. Die kwantitatiewe inligting was geanaliseer deur gebruik te maak van "Excel" sagteware en 'n beskrywende analitiese metode was gebruik om die data te interpreteer. Die hoof bevindinge van die studie is dat Aspen Pharmacare 'n MIV infeksie vlak van 20.8 % in 2005 sal ondervind, wat progressief sal toeneem tot 25,6 % in 2015. Hierdie infeksie vlak sal in die geskoolde, semi-geskoolde en ongeskoolde arbeid die ergste voorkom gedurende die 2010 periode en sal dan stabiliseer in die latere gedeelte van 2015. Die VIGS infeksie vlak in die maatskappy sal toeneem vanaf 2,0 % in 2005 tot 'n 4,4 % in 2015. Hierdie toename kan toegeskryf word aan die toename in die infeksie vlakke van die semi-geskoolde and ongeskoolde arbeid. Op die senior bestuurs vlak word beraam dat tussen 6 en 8 werknemers VIGS onder lede sal hê na 2010. Hierdie beraming toon duidelik aan dat MIV/VIGS op hierdie vlak onafhankilik van kleurgroup is en direk leefstyl verwant is. Gebaseer op die huidige verwagte werknemer voordele struktuur, en die feit dat die maatskappy volle verantwoordelikheid sou aanvaar vir die voorsiening van voordele, word beraam dat die direkte koste as gevolg van MIV/VIGS 'n toename van 10 % in 2005 en 20 % in 2010 by salarisse en lone sal voeg. 'n Toename van 2,5 % in 2005 en 5 % in 2010 word beraam vir indirekte koste (werwing van personeel, opleiding, ens.)as gevolg van MIV/VIGS. Met die hoë MIV/VIGS infeksievlakke, veral onder werkloses, sal maatskappye die kostes vebonde aan hul MIV/VIGS werknemers vir langer moet verduur en dan later sulke werknemers registreer by "Aid for AIDS" indien dit onbekostigbaar word. Belangriker is die feit dat werknemers die koste implikasie bepaal in die verband, omdat dit 'n direkte invloed sal hê op werknemer selfvertroue. Aspen Pharmacare se MIV/VIGS beleid bied meer as die wettige en sosiale vereistes soos uiteengesit in die MIV/VIGS en SOS Strategiese Plan vir SA 2000-2005. Die maatskappy het ook 'n Korporatiewe Maatskaplike Beleggings afdeling wat 'n bydra lewer by NGOs, klinieke,hospitale en gemeenskappe. Gebaseer op die intelligensie eiendom, die farmaseutiese bekwaamheid en die aanhoudende gesprekvoering wat bestaan tussen die farmaseutiese bedryf en die department van gesondheid, oortuig die navorser dat farmaseutiese maatskappye 'n voordeel het bo nie-farmaseutiese maatskappye in die hantering van die MIV/VIGS strydvraag. Hierdie studie sluit af met aanbevelings wat maatskappye kan toepas om te verseker dat hul MIV/VIGS beleid 'n betekenisvolle komponent van hul bekwaanheids retensie strategie is.

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