South Africa Pharmaceuticals & Healthcare Q4 2006

Published by: Business Monitor International

Published: Oct. 1, 2006 - 70 Pages

Table of Contents

Chapter 1 - Executive Summary

South Africa Economic SWOT

South Africa Business Environment SWOT

Chapter 2 - South Africa: Business Environment Ranking

Table: Business Environment Ranking: Middle East & Africa

Business Environment Ranking

Economics - Long-Term Risk

Politics - Long-Term Risk

Regulatory Barriers

Domestic Sector Threat

Market Growth Potential

Market Size Ranking

Chapter 3 - South Africa: Market Summary

Chapter 4 - Regulatory Regime

Intellectual Property Environment

Pricing & Reimbursement Issues

Chapter 5 - Industry Developments

Healthcare Sector

HIV/AIDS

Tuberculosis

Pharmaceutical Sector

Company Developments

Table: Results of South Africa HIV/AIDS Drug Tender, March 2005

Chapter 6 - Industry Forecast Scenario

Overall Market Forecast

Table: South Africa Drug Market Forecast Indicators

Key Growth Factors - Industry

Table: Health expenditure indicators

Prescription & OTC Market Forecasts

Table: South Africa Prescription Drug Market Forecast Indicators

Table: South Africa OTC Drug Market Forecast Indicators 2004-2010

Generics Market Forecast

Table: Generic & Branded Drugs Forecasts

Export/Import Forecasts

Table: South Africa Export & Import Trade Forecast Indicators

Key Risks to BMI’s Forecast Scenario

Chapter 7 - Competitive Landscape

Profiles: Leading Foreign Companies

GlaxoSmithKline

Sanofi-Aventis

Pfizer

Bayer

Roche

Profiles: Leading Indigenous Manufacturers

Aspen Pharmacare

Adcock Ingram

Chapter 8 - BMI Forecast Modelling

How we generate our industry forecasts

Technical Process

Pharmaceutical Industry

Sources

Chapter 9 - Appendix: Regional Demographic Data

The Long View: Data Over The Economic Cycle (2000-2007)

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Chapter 10 - Country Snapshot: South Africa Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Abstract

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.

BMI's 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.

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