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The South African Pharmaceutical industry
The pharmaceutical industry provides the vital service of providing medication to the South African population and was valued at between R42.6bn and R45bn in 2016. Involved in the sector are 276 companies licensed by the Department of Health and the Medical Controls Council. Local manufacturing, valued at R 4.9bn in 2015, is dominated by local companies. In 2015 Aspen had a market share of 15.3% and Adcock Ingram’s market share was 8.9%. South African companies hold the number one position for overall market share, for Pharmaceuticals only and for over-the-counter medication only.
Some of the important challenges facing the industry are tensions between improving access to affordable medicines on the one hand, and growing the manufacturing of pharmaceuticals on the other. Other factors influencing the sector include the introduction of the National Health Insurance (NHI), significant changes in technologies to manufacture drugs and the emergence of the use of cannabis and other alternative healing methods. Weak economic growth means that the public health sector will be required to do more with fewer resources than initially planned. It also has implications for the filling of an additional much-needed 12,000 pharmacist posts in the public sector.
The detailed report on the Pharmaceutical industry focuses on developments in the South African manufacturing and retail sectors during 2016 and 2017. The report profiles 88 companies including newcomer Inicio, which recently secured a licensing agreement with German firm Fluxpharm. The agreement is a key step towards possible domestic production of active pharmaceutical ingredients (APIs) for HIV/AIDS drugs, which locally-based pharmaceutical manufacturers currently import from China and India. If this is successful, South Africa will have its first black-owned pharmaceutical company. State-owned pharmaceutical manufacturer Ketlaphela has yet to begin production of APIs. Also profiled are three companies that have been investigated by the Competition Commission in relation to the supply of various cancer medicines, Pfizer, Aspen and Roche and its US-based biotechnology company, Genentech.