South AfricaÃ¢â‚¬â„¢s pharmaceutical market is expected to increase at a compound annual growth rate (CAGR) of 5.8% from 2011 to 2020, when its value will have risen from US$2.5 billion to $4.2 billion, according to new forecasts.
This expected fast growth will be driven by the governmentÃ¢â‚¬â„¢s healthcare reforms, which include improving access to healthcare services by expanding National Health Insurance (NIH) coverage to the entire South African population, and overhauling the nationÃ¢â‚¬â„¢s drug regulatory processes to be faster and more transparent.
These moves, together with the introduction of a new regulatory agency and efforts to augment economic growth, will positively contribute to growing the countryÃ¢â‚¬â„¢s pharmaceutical sector and boost foreign investment, according to the report, which is produced by market intelligence provider GlobalData.
The study points out that there are major concerns impeding the growth of the South African healthcare market, including poor infrastructure in rural areas and no universal system to keep healthcare costs in check. However, the governmentÃ¢â‚¬â„¢s adoption of NHI should significantly reduce the direct healthcare costs for low-income families and households, especially those living in rural areas who bear the highest burden in terms of disease and poverty, GlobalData forecasts.
The NHI system will expand health insurance coverage and create an opportunity for lower-income households to be included in the South African healthcare system, regardless of income, as access to preventive services such as immunisation against influenza and tuberculosis will contribute to the growth of the countryÃ¢â‚¬â„¢s healthcare market, the study says.
South Africa is also modernising its regulatory structure to speed up drug approvals and increase foreign investment in the country. Under the old regulatory regime, drug approvals took a long time and the process was not transparent, and this led many pharma multinationals to consider investing in other markets where there was greater clarity, more streamlined processes and less risk.
To this end, the government is establishing the South African Health Products Regulatory Agency (SAHPRA), to replace the Medicines Control Council (MCC). The new body will have a wide range of responsibilities, including helping to remove the backlog of drug applications and speed up the registration process from five years at present to one year.
SAHPRA will be a key contributor for incentivising foreign investment into South AfricaÃ¢â‚¬â„¢s pharmaceutical sector, GlobalData forecasts.
The report also points out that South Africa has taken positive steps to augment macroeconomic growth, including pushing for the countryÃ¢â‚¬â„¢s official designation as a BRICS (Brazil, Russia, India, China and South Africa) nation. This will not only benefit the macro-economy but will also spur investment and drive the coutureÃ¢â‚¬â„¢s healthcare sector as well, it says.
The BRICS designation will create additional opportunities for South African pharmaceutical companies to develop new business relationships and strategic partnerships with fellow BRICS nations, along with other rapidly-developing economies, GlobalData forecasts.
Source : abdas.org