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South Africa - Medical Devices
Sep 27, 2018

Overview

Unit: USD million

 

2015
 

2016
 

2017
(estimated)

2018
(estimated)

Total Market Size

1108.81

1102.3

1371.5

1560.8

Total Local Production

186.4

177.1

193.39

210.95

Total Imports

922.4

1038.2

983.18

933

Imports from the U.S.

212.15

294.34

309

324.4

Exchange Rate: 1 USD

12.76

14.71



 
South Africa is considered one of the largest markets in the MEA region and by some estimates is the largest economy in Africa. Spending on medical devices as a proportion of wealth is lower than average for this region, at around 0.3% of GDP and 4.0% of health expenditure (2015).
 
It is projected that 2017 will be a more positive year for the healthcare sector in terms of growth, but challenges remain due to the sluggish economic growth and currency fluctuations. Most of the major product categories will be affected, which include consumables, diagnostics, dental and orthopedics. Medical device imports will grow modestly, and South African exports will remain muted.
 
The medical device market in South Africa continues to be dominated by the United States in all categories, but particularly in orthopedics, prosthetics, patient aids, other devices and consumables. However, buyers are increasingly looking towards sourcing from Asian markets in an effort to save on costs. Germany is second to the USA, followed by China, Switzerland, the UK and Japan. China is making significant inroads, increasing by around 10% in terms of market share.
 
Market growth will likely be influenced by national legislation related to the government’s NHI program, as well as the Competition Commission’s investigation into private healthcare costs.
 
Competition from local production will be muted, and mostly limited to consumables (bandages, dressings, etc.) and furniture. However the local development of Lodox Systems, a full-body X-ray machine, as well as the Aceso system by CapeRay, a screening device integrating two modalities – full field mammography and automated breast ultrasound, indicates that local producers can successfully compete with international suppliers of sophisticated equipment if they have access to the appropriate funding channels.
 
The Department of Health has issued new regulatory requirements for medical devices and in vitro diagnostic (IVD) devices. These regulations, which lay out the procedures for registration, were published in the Government Gazette in December 2016 appear to have taken immediate effect. Registration with the Medicines Control Council (MCC) is mandatory for devices procured under international tendering. For other transactions, there will be a transitional arrangement of as yet unregistered devices and IVDs. However, the MCC can impose requirements at its discretion for devices not participating in public tenders in order to ensure that the medical device or IVD meets the essential principles of safety and performance, as determined by the Council.
 

Sub-Sector Best Prospects

According to analysis by BMI, diagnostic imaging facilities are underdeveloped with a low provision of advanced equipment. According to the WHO, South Africa has 12 MRI scanners and 51 CT scanners in the public sector, equal to 0.2 and 1.0 units per mn population. There were also 32 mammography units, 21 linear accelerators, nine telecobalt units and three PET scanners. The overall provision of equipment would be higher if units in the private sector were included. According to Elekta, there are a total of 71 linear accelerators in operation in public and private centers, but even this figure is said to be less than half the total number actually needed.
 
Diagnostic Imaging Equipment:
Diagnostic imaging equipment is forecast to be valued at US will grow approximately at a CAGR of 12% between 2016 and 2021 and is likely to continue as and when healthcare infrastructure and upgrades will be made.
 
Dental Equipment:
Although the smallest product area (3.6% of all medical imports), it grew at a CAGR of 10.2% in the last year. Access to good dental health remains a problem for the majority of the population.
 
Patient Aids:
Patient monitoring devices, powered mobility aids and other patient aids have experienced higher growth. This is a market that is dominated by India and China. This market sector is forecast to grow at a CAGR of 15.7% from 2016–2021.
 
The sophisticated South African medical community is generally interested in new technology developments and innovative products, hence all product categories will be considered.
 

Opportunities

The underdeveloped market offers potential for growth but is considerably restrained by funding issues, poor infrastructure and staff shortages (particularly in the public sector. Opportunities will exist for exporters of medical equipment (particularly new and innovative equipment), as extensive upgrades and development of hospital infrastructure is being considered. The private healthcare sector is very sophisticated and boasts world class facilities with several centers of excellence. However, approximately 93% of equipment is imported. Refurbished equipment is not favored by the medical community, particularly in the private sector, and that market opportunities here will be very limited.




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