Sunday, 25 September 2022


Opportunities in the Medical Supply Industry in South Africa

There are vast opportunities in the Medical Supply industry in South Africa, both for local use and for export into neighbouring countries that do not have advanced products and equipment as South Africa has access to.


South Africa has a growing population and is one of the most economically well-off countries in the world, with a rapidly expanding economy. South Africa also has a well-established tradition for excellence in the medical industry and for progress in research.

South Africa is known for its technical and scientific excellence, having many innovative products and services available due to the high standard of scientific research that it hosts. In keeping with these values, South Africa is one of only seven countries worldwide to host both the headquarters and analogue laboratory of WHO/WHO Focal Point on Vaccines and Biologicals - under the Global Health Innovation Network (GHIN) project - as well as the global headquarters of Pfizer Inc., one of the world's largest pharmaceutical companies.

The conditions required to start a pharmaceutical business are different in each country/region, but almost all countries/regions require a drug license to carry out any type of pharmaceutical business. In South Africa, you also need to obtain a medicine license to distribute medicines under your company's name. You need to visit your local pharmaceutical department to collect all the detailed information about the start of the drug distribution. 

They will help you and provide you with all the basic knowledge and details of permits, qualifications and registrations you need to start a drug distribution business in South Africa. Here, we will explain brief information on how to open a pharmaceutical distribution company in South Africa. For the import, export, distribution and manufacture of any drug in South Africa, the specific drug must be registered. You must register the drugs to be sold and distributed in South Africa in the Drug Control Commission Register. Once the drug is registered, you must apply to the council for a distribution license.

Firstly, we must understand that medicines and all things medical are regulated by the government, and any start-up must comply before starting.

The South African government has formed the South African Health Products Regulatory Authority (SAHPRA) to oversee the country's medical device and drug markets. SAHPRA is based on elements of South Africa's Medicines Control Council (MCC).

There is the South African Medical Device Industry Association, that plays a major role in best practice and industry standards for is members. 

Established 1985, voluntary association, not for profit that represents interests of 150 companies in Medical Device, Medical Equipment and In-vitro Diagnostics Industry - Multinationals, Distributors, Agents, Local Manufacturers; and Associate members of MISA and SALDA.

Before Starting Medicine Business, you must apply to the Council for a license to act as wholesaler or distribute medicines, scheduled substances or medical devices; appointment of a pharmacist who will control distribution of medicines and related substances; and then appointment of an authorized person who resides in the Republic and responsible for all activity related to licensing procedure and interaction with council

The procedure for applying for Medicines Distribution License includes applicant has to submit application to registrar on a prescribed form provided by council; registrar will issue a written notice to applicant regarding documents to be submitted to council for granting license to distribute medicine and related substances in reasonable time; council will inspect the business premises specified in application; and if the council is satisfied with all requirements and arrangement, council will issue license to applicant for distribution of medicines and related substances.

Main suppliers for medical equipment supply in South Africa are international names like Beckton Dickinson & Company, Siemens Healthineers, Fresenius Medical Care, Philips, Abbott, Thermo Fisher Scientific, Johnson & Johnson, and Medtronic.

The main suppliers of medical equipment, drugs and medicines into South Africa include major international pharmaceutical manufacturers such as Pfizer, Merck, GlaxoSmithKline, and Sanofi Aventis. Some established local providers of medical supplies include Allmed (a distributor of products for the pharmaceutical and healthcare industry), MedPharm (a distributor of products for the dental industry).

There are many other small companies providing wholesale distribution services; however, it is hard to get information about them. If you are a supplier, it is very essential to understand the South African market. It is always recommended to consult an experienced pharmaceutical consultant before deciding on entering the South African market.

The South African government provides various types of incentives and subsidies to encourage research and development in the country. One such policy includes R&D tax rebate incentive for qualifying companies, which are entitled to claim a full 100% tax deductible input expenditure on any implementation of approved R&D projects by them within the prescribed limit. For further information about this policy, you must check with your local tax office as the qualification and other requirements may vary from year to year.

Generally, 95% medical Devices in South Africa are imported, and the industry generated over R10.5 billion rand in revenue in 2010 and has since risen by the year, making it a viable business to enter. The industry has been growing at around two percent annually since then. The South Africa medical device market will register a 9.1% CAGR between 2017-2018 according to a recent Fitch Solutions report. This significant growth will raise the market to USD 1.27 bn by 2018. A substantial portion of medical device and lab equipment exports are sent to other parts of Africa, with 12 African nations featuring in its top 20 export destinations last year.

Many companies enter into the medical supply industry because they want to make more profit, but it is very essential for these companies to know all legal permit and requirements. Unless you keep yourself updated, you may be dealing with government officials who could shut down your company for violating some rule or regulation of which you are unaware. Following are some general points any one dealing in medical supply should observe in South Africa:

Health care system in South Africa is an important part of the country's economy and society, being described as "the largest health care provider and largest employer".

South Africa is moving towards universal healthcare in the form of National Health Insurance (NHI). Through NHI, the government is likely to become a major buyer of medical products and services and invest in the public health system to improve infrastructure and services. NHI is expected to be implemented in phases starting in 2026, but this will depend on funding and political will and other constraints.

In terms of real purchasing power, the South African healthcare market is highly complex and fragmented. Entry generally requires the appointment of an experienced and reputable dealer.

The public sector is the main buyer of sanitary equipment and supplies, especially primary health care. Procurement was entrusted to each of the nine provinces, which in turn issued their own tender announcements, but the Ministry of Health also issued tenders for national supplies. Strict funding restrictions make it difficult for public hospitals to maintain or purchase equipment. At present, the best prospects for advanced technology and equipment are still in the private sector. Hospitals in this field are dominated by three major hospital groups: Netcare Limited, Life Healthcare Group and Mediclinic Southern Africa.

All health-related products must be registered and evaluated with the South African Health Products Regulatory Authority (SAHPRA). All entities involved in the manufacture, distribution, import and export of health care products must obtain SAHPRA licenses. Only authorized representatives residing in South Africa can apply for product registration with SAHPRA.

Underdeveloped markets offer growth potential, but face considerable constraints, including severe financing problems, weak infrastructure, shortages of personnel (especially in the public sector), and difficulties in entering the market due to severe delays in the SAHPRA approval process. The COVID-19 pandemic and the general economic recession will only exacerbate these obstacles.

According to the US Trade Department, the available opportunities in South Africa include Cost effective and innovative detection and treatment for cancer and other non-communicable diseases (NCD); Cost effective and innovative surgical equipment; Advanced surgical technologies, robot-assisted surgeries to improve outcomes and address skills shortage (likely more in the private sector); Developing local manufacturing for medical devices and medicines (Public- Private Partnerships); and Vertical integration of larger healthcare providers to control costs of their supply chain by owning more of it (mergers, acquisitions, partnerships) and using technology: IoMT (Internet of Medical Things), SaMD (Software as Medical Device), Cybersecurity, data analytics, digitization and compliance.

Sources: Business Wire, Health.Gov.Za, Trade.Gov