The Supply and Manufacture of Medical and Surgical Equipment Industry in South Africa 2023

Introduction

South Africa’s medical devices industry consists of mostly small to medium enterprises and larger multinational companies with local subsidiaries or partners. It is dominated by multinationals as imports make up 90% of the market. Disposable devices account for the largest share followed by diagnostic imaging. The public sector accounts for less than half of healthcare expenditure but serves a large part of the population, and the private sector is better resourced with medical devices. The need for medical devices is underpinned by the prevalence of communicable and non-communicable diseases, trauma, and an ageing population. These factors have not necessarily led to higher demand due to low economic growth, a real decline in health budgets and no growth in medical scheme membership. Of the public funding available, considerable amounts have been lost through corruption. The planned National Health Insurance (NHI) is expected to increase public sector health expenditure, but lack of funding means this may be delayed.

Opportunities

Decline in the attractiveness of the local market for international companies if high levels of corruption are not addressed. Deteriorating exchange rate against currencies in which imports are denominated. Loss of skills to international markets. Opportunities Vulnerability to global supply chain disruptions such as the export restrictions that occurred during the pandemic.

Outlook

The South medical device sector is likely to continue to be dominated by imports. Challenges include regulatory compliance, accessibility to developed markets, alignment between stakeholders and economic conditions. Growth could be driven by finalisation of the Medical Device Master Plan, the successful rollout of universal healthcare, the ageing population and the rise in non-communicable diseases that require the use of devices for appropriate management. Medical devices will continue to be a critical enabler for targeted therapy such as for cancer.

Report Coverage

This report on the manufacture and supply of medical and surgical equipment and orthopaedic appliances in South Africa includes information on the state of the sector, the main devices used and imported, utilisation of healthcare services using medical technology, licences, notable players and technology and innovation. There are profiles of 65 companies including international companies present in South Africa such as Medtronic, Johnson & Johnson Medical, Siemens, notable pharmaceutical wholesalers and retailers, and other notable players such Southern Medical, CapeRay and Ascendis.

Strengths

A well-established science and technology institutional infrastructure. International accreditation achieved by some local companies. The strength of the regulatory environment positioning South Africa well especially on the African continent. Track record of local companies able to produce technologically innovative medical devices.

Threats

A more conducive support environment enabling local companies to gain greater market share versus multinationals. Digitalisation of healthcare information to improve healthcare analytics and improved patient outcomes. Finalisation and implementation of the Medical Devices Master Plan. Leveraging the African Continental Free Trade Area (AfCFTA) to position South Africa as the medtech hub of sub-Saharan Africa. Strong relationships with international NGOs. Successful implementation of the proposed National Health Insurance.

Weaknesses

Costly and slow regulatory compliance processes. Fragmentation of industry that hinders benefits of collaboration. Large dependency on imported products. Private and public health corruption depriving sector of needed funds. Real decline in healthcare budget allocation. Threats Uncertainty around the implementation of National Health Insurance and role of private and public sector stakeholders.