South Africa’s pharmaceutical market is one of the most attractive markets in Africa. Some of the main reasons for its rapid growth are the availability of cost-effective and skilled labor, high quality infrastructure, and the introduction of the South African Health Products Regulatory Authority (SAHPRA). The health care system aims to cover the entire population under the National Health Insurance (NHI) scheme, which it started implementing in a small population of 10 districts in 2012.
South Africa is home to drug major Aspen Pharma and privately owned Equity Pharma, however, most of the local drug manufacturers and distributors are in the hands of major international pharmaceutical firms.
In 2011, GBI Research valued the South African pharmaceutical market at $3.8 billion, and expects it to reach $7 billion in 2018 at a Compound Annual Growth Rate (CAGR) of 9.2%. South Africa’s healthcare sector is set to witness a number of new healthcare reform plans in the future, with the primary objective being to reduce the growing drug expenditure by increasing the use of generics.
According to GBI Research, generics accounted for over 60% of the volume of the pharmaceutical market in 2011. Government reforms have encouraged the manufacture and use of generic drugs as a tool to limit drug expenditure and provide low-cost effective public healthcare. The combination of government healthcare policies and numerous active generic manufacturing companies points to an increased generic market share in the forecast period.
Source: GBI Research