Barrs Pharmaceuticals has exited business rescue after agreeing to sell a controlling stake to Hetero. The deal signals a reset for a local manufacturer that has faced both operational disruption and regulatory pressure.
Business rescue consultant Karl Gribnitz announced that the Indian generics group’s South African subsidiary will acquire 78% of Barrs for R92m. The group intends this investment to stabilise the business and safeguard supply obligations at a critical point in the public sector medicines pipeline.
Barrs and its sister company, Innovata Pharmaceuticals, entered business rescue in December, alongside parent group Avacare. Gribnitz said Avacare and all subsidiaries have now exited business rescue.
Barrs Pharmaceuticals Will Deliver HIV ARV Stock
The immediate pressure point is government supply. Barrs has been unable to fulfil its share of the state’s latest HIV treatment tender. Under the transaction, Hetero South Africa will step in to cover Barrs’ portion of the order.
Gribnitz confirmed that the company will deliver outstanding antiretroviral stock by 10 February. The South African Department of Health confirmed it has approved Barrs to supply Hetero South Africa’s products at the price set out in the tender award. That decision should reduce the risk of interruptions for patients relying on the widely used three-in-one regimen supplied through the public sector.
The development also marks a change of tone in a relationship that has been tense. Hetero South Africa previously sued the Department of Health after the department excluded them from a R12.6bn tender for the triple-pill packs. The Department of Health referred Hetero South Africa to the Competition Commission, which opened an investigation in November.
Why the Deal Matters for South Africa’s HIV Supply Chain
For the health system, the key issue is continuity. Any disruption to high-volume ARV supply can quickly create downstream pressure on clinics, pharmacies, and adherence. A large-capacity partner with established generic manufacturing capability may provide added resilience, especially when local suppliers are under strain.
Bhavesh Shah, Hetero’s international marketing director, pledged the group’s commitment to expanding access to affordable medicines and strengthening local ARV production. If executed well, the transaction could help protect tender performance while supporting longer-term capacity and localisation goals.
SAHPRA Compliance Concerns Remain a Risk
Barrs still faces significant challenges. The company has closed part of its Cape Town operation since September 2025 due to repeated failures to address issues flagged by the South African Health Products Regulatory Authority (SAHPRA). Routine inspections in 2021 and 2023 identified unresolved problems. When officials revisited in August 2025, they discovered that the company had not addressed the concerns.
SAHPRA ordered Barrs to halt manufacturing at the non-compliant facility and quarantine all products made there. The regulator cited deficiencies in contamination and cross-contamination controls that could jeopardize product quality and safety. Although Barrs submitted a corrective plan in January, SAHPRA inspectorate leadership has not yet approved it.
Gribnitz said the closures apply only to creams and liquids. He said that facilities used to repackage imported morphine powder and to manufacture HIV medicines remain unaffected. The Department of Health also confirmed that SAHPRA’s directive does not affect the supply of ARVs or morphine.
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