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
$1,345.00

BMI View: South Africa's disease profile will be a central factor supporting pharmaceutical market growth , with the longstanding HIV/AIDS epidemic ensur ing this therapeutic area remains a key area of commercial interest . In addition, the rising chronic disease burden , combined with government incentives to improve access to treatment, will support a greater multinational presence over the long term. Although treatments targeting these non-communicable conditions will contribute more to overall pharmaceutical sales, South Africa's healthcare system will remain underdeveloped in key respects - thereby preventing a large-scale uptick in multinational drugmaker interest.

Headline Expenditure Projections

  • Pharmaceuticals: ZAR45.5bn (USD3.56bn) in 2015 to ZAR46.9bn (USD3.18bn) in 2016; +3.3% in local currency terms and -10.6% in US dollar terms. Forecast decreased from last quarter.

  • Healthcare: ZAR359.0bn (USD28.1bn) in 2015 to ZAR385.7bn (USD26.2bn) in 2016; +7.4% in local currency terms and -7.0% in US dollar terms. Forecast decreased slightly 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 3.334 3.561 3.182 3.240 3.372 3.572 3.855
Pharmaceutical sales, % of GDP 0.95 1.14 1.10 1.06 1.03 1.00 0.98
Pharmaceutical sales, % of health expenditure 10.8 12.7 12.2 11.7 11.4 11.2 11.0
Health spending, USDbn 30.786 28.124 26.151 27.632 29.500 31.923 35.026

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 Q117, South Africa's moved to 6th position in the matrix (compared to 9 th in the previous quarter), with a score of 52.6 out of 100.

Latest Updates

  • In September 2016, AstraZeneca completed its commercialisation agreement with Aspen Global (Aspen Pharmacare) for rights to AstraZeneca's global anaesthetics portfolio outside of the US. The agreement covers seven established medicines: Diprivan (propofol), EMLA (lidocaine+prilocaine) and five local anaesthetics with combined yearly revenue of USD592mn. The agreement includes an upfront payment of USD520mn, USD250 in product sales-related payments and double digit percentage royalties on sales.

  • South Africa's ministry of health has set a new target date of April 2017 for the transition to the South African Health Products Regulatory Agency (SAHPRA), which replaces the Medicines Control Council (MCC). The impending establishment of SAHPRA will reduce drug approval times in the country and give a boost to the local pharmaceutical industry.

  • By the end of 2016, the South African ministry of health is expected to roll out a new tuberculosis (TB) treatment programme that will allow South Africans to access the latest drug-resistant TB treatment. The department is currently in talks with Japanese drugmaker Otsuka Pharmaceutical to negotiate access to its TB drug Deltyba (delamanid). In total, the ministry has allocated ZAR740mn (USD45.97mn) for expanding the TB programme in the country.

BMI Economic View

South Africa will continue to move toward fiscal consolidation in the coming quarters, though sluggish growth and a challenging political environment will ensure this occurs at a more moderate pace than government estimates in the Medium Term Budget Policy Statement suggest. In the absence of key structural reforms, we believe that a downgrade of the country's foreign currency debt to junk status is still a significant risk.

BMI Political View

The November 26, a no confidence motion brought against President Jacob Zuma at the National Executive Committee (NEC) highlights the deep level of discord within the ruling African National Congress (ANC), and further reinforces our view that political unrest is likely to remain elevated in the run-up to the party's December 2017 National Elective Conference.

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.