India’s Aurobindo is taking the South African Treasury to court claiming that it lost out unfairly on lucrative anti-retroviral (ARV) contracts.

Aurobindo claims that it lost out on a $400m ARV contract to local South African companies despite tendering a cheaper price for the drugs.

A report by South African newspaper Business Day said that the tender award might have been influenced by a study compiled by the Industrial Development Corporation commissioned by the Department of Trade and Industry, which took into account the contribution back into the economy by local manufacturers versus overseas-based importers.

The court case over local bias puts pressure on bilateral agreements between the South African pharmaceutical industry and its counterparts in India.

According to Business Day neither company would comment as the case was sub judice.