South Africa health care market to grow to $4.2 billion by 2020

The South African government’s adoption of National Health Insurance (NHI), the introduction of a new regulatory agency, along with efforts to augment economic growth will positively contribute to growing South Africa’s pharmaceutical sector and boost foreign investment, states market intelligence provider GlobalData.

According to the firm’s latest report, the South African pharmaceutical market is expected to expand at a compound annual growth rate (CAGR) of 5.8%, from $2.5 billion in 2011 to $4.2 billion by 2020. GlobalData attributes this expected growth to the South African government’s health care reforms, which include improving access to health care services by expanding insurance coverage to the entire population, and overhauling its regulatory processes to be faster and more transparent which will drive investment into the country.

GlobalData believes some of the major concerns impeding the growth of the South African health care market are a poor health care infrastructure in rural areas and a lack of a universal system to keep health care costs in check. GlobalData expects the government’s adoption of NHI to significantly reduce the direct health care costs for low-income families and households, especially those living in rural areas that bear the highest disease and poverty burden.