South Africa Pharmaceuticals & Healthcare Report

Providing expert analysis, independent forecasts and competitive intelligence on the pharmaceuticals and healthcare industry.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, BMI's Pharmaceuticals and Healthcare Risk Reward Index, Market Summary, Economic Forecasts, Company Profiles and Competitive Landscape.

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South Africa Pharmaceuticals & Healthcare Report
Product Price
$1,295.00

BMI View: Improvements to South Africa's pharmaceutical distribution procedures will improve the population's access to essential medicines. Moreover, advancements to the country's drug monitoring capabilities will make the country a more attractive destination for local manufacturing over the long term. While South Africa is taking steps to address the distribution of counterfeit medicines, the widespread prevalence of substandard drugs will remain a risk to our outlook for the country.

Headline Expenditure Projections

  • Pharmaceuticals: ZAR43.41bn (USD3.40bn) in 2015 to ZAR47.48bn (USD3.08bn) in 2016; +9.4% in local currency terms and -9.3% in US dollar terms. Forecast in US dollar terms revised slightly upwards from last quarter.

  • Healthcare: ZAR359.6bn (USD28.2bn) in 2015 to ZAR387.0bn (USD25.1bn) in 2016; +7.6% in local currency terms and -10.8% in US dollar terms. Forecast in US dollar terms revised slightly upwards from last quarter.

Headline Pharmaceuticals & Healthcare Forecasts (South Africa 2014-2020)
2014 2015 2016f 2017f 2018f 2019f 2020f
f = BMI forecast. Source: National Sources, BMI
Pharmaceutical sales, USDbn 3.670 3.400 3.080 3.300 3.530 3.740 4.160
Pharmaceutical sales, % of GDP 1.05 1.09 1.11 1.13 1.14 1.15 1.16
Pharmaceutical sales, % of health expenditure 11.9 12.1 12.3 12.5 12.6 12.7 12.9
Health spending, USDbn 30.790 28.170 25.130 26.520 27.990 29.380 32.370

Risk/Reward Index

South Africa has strong longer-term commercial potential because of its sizeable population and economic development. However, the impact of currency depreciation and a worsening economic outlook have hurt its short-term growth prospects. In Q416, South Africa's stepped up from 11th to 9th position in the matrix compared to the previous quarter, with a score of 49.9 out of 100.

Latest Updates

  • In June 2016, AstraZeneca entered into a commercialisation agreement with Aspen Global (Aspen Pharmacare) for rights to AstraZeneca's global anaesthetics portfolio outside the US. Under the terms of the agreement, which covers seven established medicines, Aspen will acquire the commercialisation rights for an up-front consideration of USD520mn, milestone and royalty payments.

  • In September 2016, GlaxoSmithKline announced a series of agreements with Aspen Pharmacare, under which GlaxoSmithKline will divest its anaesthesia portfolio to Aspen for GBP180mn (USD237.4mn) plus milestones of up to GPB100mn (USD131.9mn). In addition, GlaxoSmithKline and Aspen have terminated their collaboration in Sub-Saharan Africa and for Aspen to exercise its option to acquire GSK's remaining thrombosis business in certain retained markets.

  • In April 2016, Johnson & Johnson officially launched its global public health (GPH) strategy at the opening of its on-the-ground GPH operations in Cape Town, South Africa. Through this global strategy, Johnson & Johnson will mobilise its global public health capabilities and resources behind a unified, multidisciplinary effort. The company's GPH strategy will include early stage disease-specific research, product development, manufacturing and distribution, and education and training resources through its philanthropic efforts.

BMI Economic View

We now expect that the South African Reserve Bank will keep the policy rate on hold in 2016 as a shift toward loose monetary policy in the developed world bolsters the rand and tempers imported price pressures. This will allow the bank to adopt a more accommodative monetary policy stance in the face of persistent sluggish economic growth.

BMI Political View

The re-emergence of rumours that Finance Minister Pravin Gordhan could be arrested suggests increased risk to South Africa's fiscal consolidation efforts and heightens the potential for a credit ratings downgrade. The elevated political uncertainty also suggests that after the rand and South African yields have already begun to reverse course following a sizeable rally in recent months, we could see a further sell off.

BMI Industry View
7
Table: Headline Pharmaceuticals & Healthcare Forecasts (South Africa 2014-2020)
7
SWOT
9
Industry Forecast
11
Pharmaceutical Market Forecast
11
Table: Pharmaceutical Sales, Historical Data And Forecasts (South Africa 2012-2020)
13
Healthcare Market Forecast
14
Table: Healthcare Expenditure Trends, Historical Data And Forecasts (South Africa 2012-2020)
16
Table: Government Healthcare Expenditure Trends, Historical Data And Forecasts (South Africa 2012-2020)
16
Table: Private Healthcare Expenditure Trends, Historical Data And Forecasts (South Africa 2012-2020)
17
Prescription Drug Market Forecast
18
Table: Prescription Drug Market Indicators, Historical Data And Forecasts (South Africa 2012-2020)
19
Patented Drug Market Forecast
20
Table: Patented Drug Market Indicators, Historical Data And Forecasts (South Africa 2012-2020)
22
Generic Drug Market Forecast
23
Table: Generic Drug Market Indicators, Historical Data And Forecasts (South Africa 2012-2020)
24
OTC Medicine Market Forecast
25
Table: Over-The-Counter (OTC) Medicine Market Indicators, Historical Data And Forecasts (South Africa 2012-2020)
27
Pharmaceutical Trade Forecast
28
Table: Pharmaceutical Trade Data And Forecasts (South Africa 2014-2020)
29
Table: Pharmaceutical Trade Data And Forecasts local currency (South Africa 2014-2020)
29
Industry Risk/Reward Index
30
Middle East and Africa Risk/Reward Index - Q3 2016
30
South Africa Risk/Reward Index
38
Rewards
38
Risks
39
Regulatory Review
40
Table: Drug Classification System
40
Intellectual Property Issues
45
Pricing Regime
48
Table: Tiered Pharmaceutical Pricing System Is Better Than A Flat Fixed Mark-Up
48
Reimbursement Regime
50
Market Overview
51
Healthcare Sector
52
Table: Healthcare Resources (South Africa 2010-2015)
58
Table: Healthcare Personnel (South Africa 2010-2015)
58
Table: Healthcare Activity (South Africa 2010-2015)
59
Research & Development
59
Clinical Trials
60
Epidemiology
64
Competitive Landscape
68
Research-Based Industry
68
Table: Multinational Market Activity
70
Generic Drugmakers
71
Pharmaceutical Retail Sector
72
Company Profile
76
Aspen Pharmacare
76
Adcock Ingram
80
Cipla Medpro
84
GlaxoSmithKline
88
Novartis
92
Pfizer
94
Roche
97
Sanofi
99
Demographic Forecast
102
Demographic Outlook
102
Table: Population Headline Indicators (South Africa 1990-2025)
103
Table: Key Population Ratios (South Africa 1990-2025)
103
Table: Urban/Rural Population & Life Expectancy (South Africa 1990-2025)
104
Table: Population By Age Group (South Africa 1990-2025)
104
Table: Population By Age Group % (South Africa 1990-2025)
105
Glossary
107
Methodology
109
Pharmaceutical Expenditure Forecast Model
109
Healthcare Expenditure Forecast Model
109
Notes On Methodology
110
Risk/Reward Index Methodology
111
Index Overview
112
Table: Pharmaceutical Risk/Reward Index Indicators
112
Indicator Weightings
113

The South Africa Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.

BMI's South Africa Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the South Africa pharmaceutical and healthcare industry.

Key Benefits

  • Benchmark BMI's pharmaceutical and healthcare market forecasts for South Africa, to test other views - a key input for successful budgeting and strategic business planning in the South African pharmaceutical and healthcare market.
  • Target business opportunities and risks in the South African pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in South Africa.
  • Assess the activities, strategy and market position of your competitors using our company profiles (including SWOTs, KPIs and latest activity) and competitive landscape tables.

Coverage

BMI Industry View

An at-a-glance perspective on the latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The pharmaceuticals and healthcare SWOT outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.

BMI Industry Forecast Scenario

Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:

  • Healthcare: Total healthcare expenditure (USDbn), healthcare expenditure (% of GDP), healthcare expenditure per capita (USD), hospital beds, doctors, and birth & mortality rates (all per ‘000 population).
  • Pharmaceutical Market: Drug expenditure in USDbn, % of GDP and per capita (USD).
  • Patented Drug Market: Prescription drug sales (USDbn & % of total sales).
  • Generic Drug Market: Generic product sales (USDbn), generic sales (% of total sales).
  • OTC Drug Market: OTC sales (USDbn & % of total sales).
  • Macroeconomic Forecasts: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against USD, government expenditure and external debt.

BMI’s Pharmaceuticals and Healthcare Risk Reward Index

BMI’s Risk Reward Index provides investors (both national and multinational) looking for opportunities in the region with a clear country-comparative assessment of the market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.

Market Summary

A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape

Industry Developments

A focus on government healthcare reforms, epidemiological trends, mergers and acquisitions, product launches, market entries, FDI activity, R&D, biotechnology, clinical trials and supply chain issues.

Regulatory Regime

Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as analysis of the overall regulatory burden.

Competitive Landscape

The competitive landscape section provides comparative company analyses and index by USD sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics and distribution sub-sectors.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.