About four in five medical devices used in South Africa are imported, a new study by the Localisation Support Fund (LSF) found. The findings were shared by industry professionals on October 27.
The study showed that the import share of medical appliance supply rose to 80.8% in 2022, up from 78.1% in 2021. Total supply grew to R67.5-billion from R57.2-billion. Local production grew by only R500-million to R12.9-billion.
“Manufacturers need predictable volumes to motivate investment and the data from the study showed that demand-pull from public purchasing is a realistic target,” said Dr Stephanie Berrada, public health principal for Middle East and Africa at IQVIA.
The study was done by health data company IQVIA and advisory firm HealthValue Consulting. LSF CEO Irshaad Kathrada said the aim was to build evidence on the problems facing local makers and ways to solve them.
HealthValue Consulting MD Dr Kirti Narsai said demand was not the main problem. Narsai said the real limit was turning that demand into local production.
According to the study, about 29% of devices and medical consumables in the public sector came from local producers. In the private sector, the figure was about 25%.
Many local factories are running well below capacity. The study found that 47% of local companies operated at less than 50% of their capacity. Only 6% said they ran above 75%.
Companies named high input costs as the biggest barrier, cited by 68% of respondents. Heavy regulation was cited by 61%, skills gaps by 38% and access to finance by 36%.
The study found that 63% of respondents said the public sector was the hardest market to serve. Payment delays and slow tenders were the main reasons given, more than low prices.
South Africa imported an estimated R155-billion worth of medical technology between 2021 and 2025. Public sector buying of medical technology came to about R50.3-billion in that time.
Berrada said Gauteng, KwaZulu-Natal and the Western Cape made up about 67%, or R33.7-billion, of national public spending on these products. She said pooling the buying of these three provinces could send a strong signal to local makers.
She said multi-year contracts and better demand forecasting would help manufacturers plan their investments. The study found that more than half of the companies surveyed had been running for over 20 years.
A representative of medical imaging company Lodox said more than 80% of its sales went to the United States. The study found that about 70% of medical devices imported into South Africa came from the US.
“We cannot crack our home market, despite being developed partly through government funding,” the Lodox representative said. The Industrial Development Corporation holds a large share in the company.
A representative of the Medical Device Manufacturers of South Africa (MDMSA) said public contracts can last up to five years. This locks local makers out of bidding for that work during that time.
The MDMSA representative said the group applied to the Department of Trade, Industry and Competition to become an export council. The group had received no feedback after six months, the representative said.
The study suggested local makers start with lateral flow rapid tests. It proposed beginning with lower-risk tests, then malaria tests, and later pregnancy and HIV tests.
Department of Health director Fundile Gebremedhin said government serves about 84% of the population. Gebremedhin said scattered buying and poor data make it hard to signal clear demand to local makers.
Gebremedhin said the department could learn from medicines procurement, where it already coordinates tenders and combines demand across provinces. A similar approach for medical technology “could help unlock local manufacturing opportunities and strengthen growth”, Gebremedhin said.
Source: this article is based on reporting by Engineering News. Image: Engineering News. Written with the help of AI and published by the Tzaneen Voice Technology desk. See our Editorial Standards.
Werner Jacobs covers technology for Tzaneen Voice. Werner reports on mobile networks, data prices, internet access, smartphones, apps, AI, cybersecurity and South African tech companies. Each story explains what a new product, price change or policy means for ordinary users in South Africa.