South African vaccines manufacturing unit strong competition for others

Published: 6 Nov 2007

By Lizelle Wentzel, Research Analyst

There is a significant divide in healthcare in South Africa between the public and the private sectors. 80 percent of South Africans rely on public healthcare, but the sector is under-staffed, operates on strict budgets, and must rely on government tenders for the procurement of goods and services. The private sector serves around 20 percent of the South African population, and this figure is growing as medical aid scheme membership numbers increase. Although margins charged in the private sector are high, patients are willing to pay the premiums for good service by skilled staff.

In South Africa, vaccination against certain diseases is compulsory. The main reason for this to prevent outbreaks of diseases such as polio. The South African Government, in accordance with the guidelines of the World Health Organisation (WHO), has implemented the Extended Immunisation Plan (EPI) to control major diseases. The EPI programme contains vaccines against measles, diphtheria, pertussis, tetanus, polio, haemophilus influenza tybe b (the cause of invasive disease), hepatitis B, and tuberculosis. Government covers the cost of EPI vaccinations for all children up to the age of five.

Paediatric Vaccine Market: Market Share Analysis by User-Segment (South Africa), 2006

                                   Source: Frost & Sullivan

Although these major diseases are controlled, other organisms leading to daily deaths in Africa are not yet covered by Government's EPI programme. These include pneumococcal disease caused by Streptococcus pneumoniae and acute diarrhoea caused by rotaviruses. The South African Government operates on a tight budget and has adapted very slowly to new technology, predominantly due to the cost of new vaccines. These vaccines are however available to private sector patients at high price margins.

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