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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  • Get a full view of the competitive landscape to assess your market position
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South Africa Pharmaceuticals & Healthcare Report
Product Price
$1,295.00

BMI View: Continued delays towards large-scale regulatory improvements in South Africa's pharmaceutical industry pose a threat to generic medicines market growth; however, long-term growth will be supported through a variety of other driving factors including cost-containment measures and revised pricing structures. Despite the South African Department of Health's commitment to improving regulatory conditions, issues relating to consumer perceptions are set to persist.

Headline Expenditure Projections

  • Pharmaceuticals: ZAR43.41bn (USD3.42bn) in 2015 to ZAR47.33bn (USD2.91bn) in 2016; +9.0% in local currency terms and -14.7% in US dollar terms. Forecast in US dollar terms revised downwards from last quarter.

  • Healthcare: ZAR351.1bn (USD27.6bn) in 2015 to ZAR378.7bn (USD23.3bn) in 2016; +7.9% in local currency terms and -15.7% in US dollar terms. Forecast in US dollar terms revised downwards 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 3.668 3.415 2.912 2.881 2.933 3.070 3.210
Pharmaceutical sales, % of GDP 1.05 1.07 1.08 1.09 1.10 1.12 1.12
Pharmaceutical sales, % of health expenditure 12.2 12.4 12.5 12.6 12.8 12.9 13.1
Health spending, USDbn 29.979 27.621 23.297 22.793 22.934 23.714 24.494

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 Q216, South Africa's dropped from ninth to 10th position in the matrix compared to the previous quarter, with a score of 48.7 out of 100.

Key Trends And Developments

  • In January 2016, multinational drugmaker Johnson & Johnson opened its newly modernised pharmaceutical manufacturing plant in Cape Town, South Africa. An investment of R300mn (USD18.02mn) was targeted towards infrastructure and technological improvements, which makes up part of Johnson & Johnson's target to triple its manufacturing output of pharmaceuticals by 2022.

  • In December 2015, US-based drugmaker AbbVie signed a licensing agreement with UN-backed health organisation Medicines Patent Pool (MPP). The agreement will allow generic manufacturers to manufacture and sell generic versions of lopinavir + ritonavir (LPV/r) - used for second-line treatment of HIV/AIDs - to help maintain supplies in South Africa. The country was previously dependent on this single supplier as the company's patents prevented other firms from selling the drug in the country.

  • In December, South Africa based Treatment Action Campaign (TAC) has raised concerns over the decision of French drugmaker Sanofi to cut TB vaccine production, reports Times Live. Sanofi has stopped manufacturing the Bacillus Calmette-Gueri (BCG) vaccine. TAC accused Sanofi of putting 'thousands of children's lives at risk by stopping production of the BCG with no warning'. There has been a global shortage of the BCG vaccine all year and thousands of South African babies have not been vaccinated, noted TAC.

BMI Economic View

Overall, the improved deficit projections of the 2016 Budget, which are driven by tax adjustments which will increase revenues by ZAR48.1bn over the next three years, speak to fiscal consolidation. But it will take more than one rigorous budget to check the upward trajectory of employee compensation, debt interest costs and borrowing requirements of state-owned enterprises.

BMI Political View

Despite the tense run-up, President Jacob Zuma's state of the nation speech on February 11 contained no major surprises. Commitments to tackling pressing issues such as South Africa's fiscal problems and crippling power shortages were light on detail, which made it difficult to accurately assess the credibility of the government's plans to tackle key issues such as budgetary problems, the electricity crisis and a possible sovereign rating downgrade.

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)
12
Healthcare Market Forecast
13
Table: Healthcare Expenditure Trends, Historical Data And Forecasts (South Africa 2012-2020)
15
Table: Government Healthcare Expenditure Trends, Historical Data And Forecasts (South Africa 2012-2020)
15
Table: Private Healthcare Expenditure Trends, Historical Data And Forecasts (South Africa 2012-2020)
16
Prescription Drug Market Forecast
17
Table: Prescription Drug Market Indicators, Historical Data And Forecasts (South Africa 2012-2020)
18
Patented Drug Market Forecast
19
Table: Patented Drug Market Indicators, Historical Data And Forecasts (South Africa 2012-2020)
21
Generic Drug Market Forecast
22
Table: Generic Drug Market Indicators, Historical Data And Forecasts (South Africa 2012-2020)
23
OTC Medicine Market Forecast
24
Table: Over-The-Counter (OTC) Medicine Market Indicators, Historical Data And Forecasts (South Africa 2012-2020)
26
Pharmaceutical Trade Forecast
27
Table: Pharmaceutical Trade Data And Forecasts (South Africa 2014-2020)
28
Table: Pharmaceutical Trade Data And Forecasts local currency (South Africa 2014-2020)
28
Industry Risk/Reward Index
29
Middle East and Africa Risk/Reward Index - Q2 2016
29
South Africa Risk/Reward Index
36
Rewards
36
Risks
37
Regulatory Review
38
Table: Drug Classification System
38
Intellectual Property Issues
43
Pricing Regime
46
Table: Tiered Pharmaceutical Pricing System Is Better Than A Flat Fixed Mark-Up
46
Reimbursement Regime
48
Market Overview
49
Healthcare Sector
51
Table: Healthcare Resources (South Africa 2010-2015)
57
Table: Healthcare Personnel (South Africa 2010-2015)
57
Table: Healthcare Activity (South Africa 2010-2015)
58
Research & Development
58
Clinical Trials
59
Epidemiology
63
Competitive Landscape
67
Research-Based Industry
67
Table: Multinational Market Activity
69
Generic Drugmakers
70
Pharmaceutical Retail Sector
71
Company Profile
75
Aspen Pharmacare
75
Adcock Ingram
79
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.