Pharmaceuticals

Overview

Demand for pharmaceutical products in South Africa is increasing. The country has an established supply chain, with local production meeting almost 70% of the pharmaceutical sector’s demand. The bulk of local pharmaceutical output comprises generic medicines, representing 50% of the overall market.

Value proposition

The South African pharmaceutical market is forecast to grow around 7% a year and reach R54 billion in value by 2021. Pharmaceutical companies will increasingly benefit from a centralised procurement database. South Africa is the only country in Africa that meets World Health Organization standards to manufacture pharmaceutical products. State support for localisation will underpin domestic manufacture.

Opportunities

Reliance on imports, particularly of active pharmaceutical ingredients, presents a clear opportunity for import replacement, in both human and veterinary pharmaceuticals. Moreover, continental integration means that opportunities exist in expanding exports.

The main destination for South African pharmaceutical exports is already the SADC region. That the country complies with WHO standards for manufacturing pharmaceuticals makes it more appealing to multinational corporations than other African countries, which then present an export market.

Specific capabilities have been developed in the manufacture of certain medicines such as anti-retroviral drugs, with six local companies having established competencies to formulate, tablet and package ARVs locally. Spending on ARVS is government’s biggest health commodity spend, and it is likely that a significant portion of the state’s procurement be given to local players.

The dti has committed itself to support industry mechanisms where necessary to promote local manufacture.