Medical Research Council; National Health Laboratory Services Annual Reports 2005/06

HEALTH PORTFOLIO COMMITTEE
12 June 2007
MEDICAL RESEARCH COUNCIL; NATIONAL HEALTH LABORATORY SERVICES ANNUAL REPORT 2005/06

Chairperson: Mr LV Ngculu (ANC)

Documents handed out:
South African Medical Research Council presentation
National Health Laboratory Services presentation
South African Medical Research Council Annual Report 2005/06 (available at www.mrc.co.za)
National Health Laboratory Services Annual Report 2005/06 (available at www.nhls.ac.za)

Audio Recording of the Meeting

SUMMARY
The Medical Research Council presented its Annual Report and emphasised the need for government to get more involved in funding research and investing in training and infrastructure in this field. Members raised concerns about the Auditor General findings in the Annual Report and the work being done on TB and the Multi-Drug Resistant (MRD) and Extreme Drug Resistant (XDR) strains.

The National Health Laboratory Services gave a presentation on their Annual Report. Questions were raised again regarding the incidence of TB and the treatment of MRDs and XRDs. Further questions around auditing were asked.

MINUTES
Medical Research Council (MRC)
Prof Anthony Mbewu, MRC President, stated the mandate of the MRC as being the promotion of health and quality of life through research, development and technology transfer. Strategic objectives were to promote and conduct research, professional support for research and research translation. The MRC was divided into the following units: HIV and AIDS, Tuberculosis (TB), Infectious Disease, Cardiovascular Disease and Diabetes, Crime, Violence and Injury, Cancer and Health Promotion, Public Health, Genomic and Proteomics, Women, Maternal and Child Health, Nutrition, Environment and Health, Brain and Behaviour and African Traditional Medicines.

Growth in MRC income went from R304 million for 2005/06 to R334 million in 2006/07. He noted that the MRC did not do research for the pharmaceutical industry, but that they were involved in cutting edge research. The need for government to double invest into the building of infrastructure, building human capacity and laboratories was vital since overseas funding was only allowed to be used purely for research. No research could effectively take place without the laboratories, the human capacity and the infrastructure. The government funded the MRC with R189 million. Outputs included 49 PhD graduates and 50 Master graduates, patents for new HIV vaccines and some 670 publications in 2006. They had 854 personnel of which 81% were black and 67% were women. South Africa had only seven out of every thousand knowledge workers compared to Korea with seventy out of every thousand.

Highlights included assisting the Department of Health with bio-statistics for the HIV epidemic in pregnant women since 1990. This figure has grown every year until 2005 with 30.2%, which may indicate stabilization. Some 350 000 people were on ARVs. The development of microbicides was an important aspect of their research where even though condoms were 100% successful in preventing AIDS, many men still forced women to have sex without. Microbicides could reduce infection by 50% and gave women the power to do something about prevention. Major trials earlier this year had failed but further trails would be conducted. The government needed to fund research to a far greater degree than it was currently doing.

The MRC was involved in the rapid diagnosis of MDR TB together with the NHLS and FIND Diagnostics, reducing testing time to three days.

The MRC was involved in the development of pneumococcal vaccines.

Women’s Health was being looked at through gender research with regard to sexual violence towards women and the socio economic factors behind such behaviour. Men’s Health and Behaviour Research looked at the practice of circumcision and the fact that HIV transmission can be reduced by 50% through circumcision.

Lead in paint, especially on toys, is being researched and a lead awareness campaign is being developed.
Prof Mbewu took the Committee through the work being done by the various other units and concluded that the MRC was growing from strength to strength in terms of the depth and breadth of its research portfolio.

Discussion
Mr G Morgan (DA) congratulated Professor Mbewu on running "a fantastic organization", and asked him to address three issues raised by the Auditor General (AG): the status of the MRC’s fraud prevention plan; inconsistencies between reported outcomes and source documentation; and performance measurement.

Professor Mbewu replied that the fraud prevention developed over the past two years, had been approved by the MRC board in 2006, and had been implemented since then. The plan included a whistle blower mechanism, through which three cases had already been reported and followed up on. He confirmed that the AG had found disparities between the MRC’s Key Performance Indicator (KPI) Report and its Strategic Plan. He stressed that MRC had been working diligently to ensure that its Strategic Plan was specific regarding key results areas, targets and indicators, and that every item in the KPI report could be verified by source documents. Regarding performance management, MRC was also working hard to ensure that the performance of its various units and directorates could be measured clearly against verifiable indicators.

The Chair pointed out that these issues had been raised by the AG already in the 2004/05 audit report.

Professor Mbewu admitted that MRC had at first been slow to react to these comments, but had now dealt with them.

The Chairperson asked about the financial risks faced by the MRC, as described in the report.

Prof Mbewu replied that the MRC was working diligently to improve its risk management policies. It had established a risk management committee specifically to identify financial risks and to ensure that programmes and processes were in place to diminish and control those risks.

Ms N Mathibela (ANC) thanked the MRC for a "balanced report", and asked if the MRC was faced with the problem of losing researchers and scientists.

Prof Mbewu replied that it was somewhat difficult to attract and retain students in the field of science, largely due to the absence of a post-PHD career path both in the universities and the MRC. There was a need to create such career pathways through post doctoral programmes and the like. MRC had looked into this, but government also needed to invest much more in this area.

The Chairperson asked Prof Mbewu to comment on the AG’s statement that MRCs strategic plan was not in line with its level of performance in terms of meeting strategic objectives.

Prof Mbewu replied that that these findings pertained to the 2005 audit report. MRC had paid close attention to the AG’s comments in elaborating subsequent plans (the strategic plan for 2006 and a 5-year plan for 2005-2010), ensuring that each objective had clear indicators and time-bound targets. These improvements would reflect clearly in the next report submitted for 2006/07.

Asked which medical aid MRC staff belonged to, Prof Mbewu said that it used to be exclusively BestMed, but that since last year employees had been free to join a scheme of their choice. Regarding allegations that MRC’s medical aid policy was in violation of the law, he said this referred to an oversight affecting some twenty retired employees, for whom another solution had now been found.

The Chairperson asked about non-funded assets.

Prof Mbewu replied that the matter had been dealt with, but he would need to consult the MRC’s Chief Financial Officer on which specific measures had been taken and provide written clarification to the Committee. The CFO had been unable to attend the meeting as he was overseas attending a course.

Mr A Madella (ANC) congratulated Prof Mbewu on the good work done by the MRC. He asked what progress had been made towards developing medications to fight MDR and XDR TB, to stop this disease from destroying the population.

Prof Mbewu replied that TB could potentially have a catastrophic impact on South Africa, as was evidenced by the Kwa Zulu Natal epidemic. The main reason for this was the high rates of HIV infection which make people particularly susceptible to XDR TB. There were some 5.5 million HIV positive people in South Africa, which made up 12% of the population. The MRC’s response included involvement in identifying the epidemic, and working with the Department of Health, the WHO and Health Departments in other SADC countries to improve screening for drug resistant TB and to develop new technologies to shorten the detection time from two months to three days. The cure rates for TB should be above 85%, yet these were not the rates being experienced and the MRC was doing research into the reasons behind this. A new generation of five TB drugs was being developed, all five of which were being tested in clinical trials in South African. Unfortunately such development usually took from ten to fifteen years and one was looking at 2010 before any of them could go on the market. He said that although tablets were available for drug resistant TB, their use was problematic due to their high levels of toxicity. MRC was also looking at using immune boosters together with TB chemotherapy to improve patients’ response to treatment.

Ms N Mathibela (ANC) sought clarification on the auditing procedure, asking whether each body was audited at its own level, and whether this did not cause some confusion.

Prof Mbewu replied that that like other statutory bodies, the MRC had both internal and external auditors to provide oversight of the board, executive and committee. Internal auditors reported to the Audit Committee, which meets four times a year, and a rolling audit ensured that a detailed audit report was submitted to external auditors annually on at least three out of twelve support directorates. In response to other questions, he said that the MRC had considered doing all its auditing internally, but had established that this would be more expensive than the current system.

The Chairperson asked Professor Mbewu what the attrition rate for the MRC was, to which he replied 2%.

Ms N Mathibela (ANC) asked to be briefed on the Conrad trial report. Professor Mbewu said there were two separate reports: one from a clinical trial and one from the National Health Research Ethics Committee. The first pertained to a clinical trial which had been terminated in January due to suspicion that there were more HIV positive people in the treatment group than in the placebo group. It had subsequently been found that there was no significant difference. The second report pertained to allegations of breeches of protocol and ethics. The Minister of Health had investigated this through an independent study, and would take whatever action deemed appropriate.

Mr A Madella (ANC) asked whether the MRC had done anything to address the under representation of disabled people in the organization, such as a programme to headhunt disabled students having been awarded bursaries.

Professor Mbewu admitted that the MRC had performed very poorly in this regard. It had tried to headhunt, but not with much success.

Mr A Madella (ANC) asked whether the MRC thought that warning labels could help reduce drug- and alcohol usage.

Prof Mbewu replied that not much research had been done into this question. He suspected that warning labels on alcohol would have much the same effect as those on tobacco products, but this would need to be proven through research.

The Chairperson thanked Professor Mbewu for a well-prepared presentation, and expressed regret that the CFO had not been present to answer the questions on financial issues.

National Health Laboratory Services
Mr John Robertson, CEO:NHLS, introduced his delegation and presented their Annual Report.

The purpose of the NHLS was to provide cost effective health laboratory services, training for health science education, support health research and surveillance. It had 6000 clinics across the country, as well as hospitals, the National Institute for Communicable Diseases (NICD) and the National Institute for Occupational Health (NIOH). They had 265 laboratories, now including 52 in KZN and a total of 5473 personnel. Mr Robertson looked at the changes in workforce profile, which had been affected considerably by the inclusion of KZN. The intake of registrars had increased from thirty in 2005 to sixty in 2006, not including figures for KZN. They had suffered a drop in pathologists in 2005 and had 120 in 2006, while aiming to build up to 200 in the coming year. The function of surveillance was being carried out by the National Institute for Occupational Health (NIOH), which was recognised internationally for quality, research and service, as well as by the WHO. One of their priorities was the measurement of silica and the link with TB in miners. Funding of R12 million had been made available for the building of a training centre. The South African Field Epidemiology and Laboratory Training Program (SA FELTP) was in the process of integrating epidemiology and laboratory services into a virtual facility in conjunction with the University of Port Elizabeth.

Mr Robertson showed the incidence of polio isolates during 2006 listed by African countries. The highest incidence was in Nigeria with 654 cases. There had been a substantial increase in capacity for testing through an increase in the number of laboratories. The increase in laboratories doing CD4 tests was up from about nine to forty-seven, the number doing viral load tests up from about seven to fifteen and those doing PCR up from about three to eight.

Regarding TB Mircoscopy tests, numbers were up in all provinces, totalling some two million tests in 2006. It was shown that out of 100 000 microscopies, 7000 would test positive for TB. Cultures for TB had also increased per province The number of MDR TB cases identified had also increased per province, while in some provinces like Gauteng and Western Cape the number of XRDs had decreased from 2004 to 2006. Testing for the disease could take up to three months if it included culturing. The NHLS was looking at cellphone technology to speed up sending results through to the various centres and they were trying to build the appropriate interfaces to enable the printing out of SMS messages from dedicated cellphones. A pilot laboratory information system would be installed by October 2008. Specimen transport still proved to be a challenge which was being addressed in all manner of innovative ways, such as the use of unmanned aerial vehicle systems (little aeroplanes with electronic motors). This project was being funded by Denel and the NHLS to the tune of R150 000 each.

In summary of the group results, he said that the group needed its surplus of R158 million for working and capital expenditure. Transfers in were R30 million from a trust and R40 million for the start up of the ARV programme for two years. A summary of cash flows showed an operating profit of R275 million, grants received from government of R73 million, investment in property, plant and equipment more than doubled to R152 million, leaving a net increase in cash of R288 million which usually was absorbed in working capital.

The audit qualification was related to an inventory balance, which had to be carried over to the end of the year. Emphasis of matter relating to the completeness of the external grant program was due to the unknown status of researchers’ proposals. He said this was perfectly common among research organizations and did not reflect a lack of control or governance.

Certain title deeds needed to be transferred and this would take at least another year and therefore would probably appear again in the following annual report.

The contravention of statute which had been raised was as a result of certain board members being reluctant to deliver a full set of their assets. The Fraud Prevention Plan would be fully implemented before the next report, when the hotline would have been installed.

Mr Robertson showed that tariff rates for tests would be kept low by the NHLS| in comparison to private pathologists, the price rising on average from 2005/06 of R41,02 per test to R42,51 in 2006/07 and rising to R43,45 for 2007/08, compared to R63,28 by the CMS.

Expenditure was about R117 million, 84% of which went to employment equity companies. This excluded international spend on diagnostic equipment.

Discussion
Mr Madella asked for further elaboration on the new process whereby screening could be done within seventy-two hours. He said this was extremely encouraging.

Mr Roberston said the joint venture between NHLS and Find Diagnostics was a project being funded by the latter and consisted of 40 000 tests. A model of microscopy meant that usually out of one hundred tests, around twenty would test positive and one out of the twenty would be MDR. This could be determined within seventy-two hours. However, those tests that had negative results would have to have cultures made form them and these cultures took six weeks, out of which usually a further two would prove to be positive and MDR. Therefore out of a hundred usually around three tested positive for MDR. The quick turnaround time could at this point only be guaranteed for microscopies. It was essential to reduce the turnaround time as this reduced the time the disease had to spread further. Roche was involved in trying to develop tests which could detect TB at an earlier was stage. This would probably take another two years.

Mr Ngculu asked why external auditors were involved in financial auditing and not the AG.

Mr Suliman Minty (CFO) replied that the external auditors had been appointed by the AG to act on his behalf as there was a lack of capacity.

The Chair commented that since the AG was the custodian he should have an opinion on the matter. He noted that most of the cases of dismissal and disciplinary meetings involved Africans.

Mr Minty said that the AG held the external auditors responsible.

Mr Senzeni Ndlangisa (acting HR manager) said this view was indeed correct and that an investigation had been initiated into the reasons behind these dismissals. They occurred certainly among the lower ranks of the organization, who also happened to be largely African. It seemed most of the disciplinary hearings were for minor transgressions and training would be instigated in order to ensure a better understanding of the NHLS policies among these echelons of the organization.

The Chair asked if there was collaboration with SADC countries in the prevention of recurrence of polio, especially in view of the political and economical instability in Zimbabwe.

Mr Robertson affirmed there was extensive collaboration on the continent and the African headquarters of the WHO was in Harare. The numbers of the polio isolates shown in the presentation were in fact sent to them directly from all round the continent.

Mr Robertson said that recently the NHLS had to appear in front of SCOPA on the behest of the AG. The explanations they had offered seemed to have satisfied the AG.

Mr M Sibuyana (IFP) asked according to the figures presented, why fewer people contracted TB in Limpopo and whether there were any centres there.

Ms Joyce Mogale (Branch Executive Manager) said the figures for Mpumalanga were even lower, but this might be interpreted as meaning that fewer tests were being conducted than there should. She said there were laboratories in every hospital throughout the country and there were transport services to the clinics in Limpopo. In fact, 76% of those clinics were visited daily. Cultures were currently sent to Gauteng because they lacked space for a facility. They were now in the process of renovating a facility for this purpose. The same problem beset them in Mpumalanga where space had also been identified in Ermelo for testing. She noted that laboratories had to have separate facilities for the testing of MDRs for safety reasons.

Mr Robertson said the figures quoted were absolute numbers of cases identified and even though these seemed to indicate that there were no instances of XDR in Mpumalanga, in reality this was probably unlikely

The meeting was adjourned.