South Africa Pharmaceuticals & Healthcare

Summary

South Africa has the largest and best developed pharmaceutical market in Africa, although per capita drug spending stood at just US$63.5 in 2005. This reflects the fact that although a wealthy country in African terms, there remain large socio-economic inequalities. This is reflected in healthcare, where in 2005 out of a total expenditure of US$17.2bn only US$6.7bn was spent in the public sector.

Drug spending is forecast to reach US$3.74bn in 2010 driven by growing private expenditure, increased health awareness among the population and large government tenders for generics to treat the HIV/AIDS crisis in the country. Local drugmakers are expected to benefit in the coming years with Aspen Pharmacare recently announcing strong results for the financial year. This was driven in part by booming sales of ARVs, with the company currently serving an estimated 300,000 people and aiming to increase this to 1mn.

The adjusted Business Environment Rankings for the Middle East and Africa region reveal that South Africa is in 5th place, behind only UAE, Bahrain, Turkey and Oman. This is primarily due to the large size of the market, coupled with a strong long term economic and political outlook. However, price restrictions are having a negative impact, especially as they do not account for cost inflation.

The South African government recently introduced new draft dispensing fees for pharmacies. The proposed new structure comes after the Constitutional Court threw out the controversial 'Single Exit Price' dispensing regime in September 2005. Under the new system price ceilings for low-cost drugs will be reduced. However, margins for more expensive treatments are likely to become progressively higher. Pharmacists are unhappy with the plans, claiming that their survival was already precarious under the previous system of dispensing fees. With the government's insistence on price controls, the pharmacy sector has little room for manoeuvre.

Key Benefits of Report

• Rely On Our Independent 5-Year Forecasts As A Benchmark
  to test other views - a key input for successful budgetary and strategic business planning.
• Target Business Opportunities & Risks
  through our reviews of latest industry trends, regulatory changes, and major deals, projects and investments
• Exploit Latest Competitive Intelligence & Company SWOTS
  on your competitors and peers through company rankings by sales, market share and ownership structure – includes multinational and national companies.

Scope of Report

An at-a-glance perspective on latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The SWOT outlines strategic factors which affect BMI’s forecast analysis, and taken together with BMI’s Economic and Business Environment SWOTS, give a complete overview of market climate.

Outline of market characteristics, growth factors, leading therapeutic segments and a competitivness of the market.

Guide to and analysis of country intellectual property developments and pricing & reimbursement issues, which constitute the regulatory make-up of the market.

Focus on government healthcare reforms, epidemiological trends, company M&As, product launches, market entries, FDI activity, R&D and patent legislation.

5-Year Forecasts to end-2010 for all key industry indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:

• Drug market expenditure (US$bn); drug expenditure per capita (US$); as % of gdp
• Prescription drug market (US$bn)/as % of total market; sales by alimentary tract/metabolism; antibiotics, cardiovascular, central nervous system, oncology, musculoskeletal and respiratory system
• OTC market (US$bn)/as % of total market (sales by analgesic, cough and cold, digestives, skin treatments, vitamins and minerals)
• Generics market (US$bn)/ as % of total market
• Health expenditure (US$bn, % of gdp and per capita); public sector health expenditure as % of total; number of hospitals; beds, hospital admissions, doctors, births and deaths per 000 population

Forecasts based on bespoke BMI economic modelling, using historical data sets of macroeconomic and industry variables to derive rigorous statistical relationships, anchored in advanced linear regression techniques.

BMI forecasts for all headline macroeconomic indicators, including:
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 US$, government expenditure, external debt

Intelligence on the market position of major MNC power houses and indigenous companies. BMI profiles key research-based companies. Company SWOTS are provided for all key strategic players, complete with a company activity overview, its leading products and analysis of business opportunities.

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