PHARMACEUTICAL: Pharmaceuticals to See 22% Growth Over Next Three Years
Recent Gauteng Business News
The SA pharmaceutical industry in 2009 had one of the best years despite the global recession. This underlined the sustainability and resilience of the industry.
In addition to an increasing aging population, the expanding middle class and a growing population, growth in the sector was stimulated by increased prices and volumes of products sold.
The fundamental growth drivers of the SA pharmaceutical industry remain strong. However, industry executives are concerned with government’s inconsistencies in awarding the annual Single Exit Price (SEP) increase.
The announcement on 2010’s SEP increase should have been made in February but there has been a delay by the Department of Health. Industry executives are frustrated, as this delay creates uncertainty and can be destabilising to any business. The SEP legislation was introduced in 2004 to make medicine more affordable. The first increase was 5,2 % in 2006 followed by 6,5% in 2008 and 13,2 % last year.
The industry’s future remains positive with anticipated growth of 22% over the next three years based on higher levels of fixed investments through the private sector. Coupled with this are the ever-increasing numbers of midsize pharmaceutical companies entering the market creating a larger network base for companies to grow through consolidation or initiatives into speciality drugs and generic medicines.
South Africa is 18% HIV prevalent and the current anti-retroviral (ARV) program reaches approximately 1,7 - million people. The ARV government tender is set to be awarded in June 2010. This will allow pharmaceutical companies to bid to supply the biggest HIV treatment programme in the world.
However, there are delays in registering ARV medication through South Africa’s drug registration body, the Medicines Control Council (MCC), which in turn may keep cheaper, more patient-friendly drugs out of reach of those affected.
Business News Sector Tags: Health|