The past two decades have changed the pharmaceutical sector and health care delivery in both developed and emerging economies. The increasing use of generic medicines globally, 1 the consolidation of manufacturing into centers of excellence—mainly in Asia—and evolution of supply chains have been driven by rising demand for health care, decreasing budgets, and pressures to drive medicine prices down. 1 , 2 The emphasis on improved health outcomes—especially for women, children, and those with HIV/AIDS—further increased demand for medicines, particularly in emerging economies on the African continent.
The global pharmaceutical market, valued at $1.1 trillion in 2017, 3 is expected to grow to $1.4 trillion by 2020, representing a 4.2% compound annual growth rate (CAGR). Sub-Saharan Africa is expected to lead the trajectory at a rate of 7.5% CAGR.3 The South African pharmaceutical market was valued at $3.2 billion in 2017, making it the biggest in Africa (ahead of Nigeria, Egypt, and Kenya). 4
The Department of Trade and Industry (DTI) reports, however, that the country’s import penetration rate for pharmaceuticals (the ratio of pharmaceutical imports to exports) is a staggering 65% 5 and growing disproportionately. According to Quantec, a leading consultancy on economic and financial data, the pharmaceutical trade deficit totaled $15.35 billion between 1993 and 2017. 6 This led to the pharmaceutical industry being the fifth leading driver of the national trade deficit.5
South Africa’s pharmaceutical trade deficit can be attributed to a considerable shrinkage of the country’s pharmaceutical manufacturing capacity: 37 plants closed in the late 1990s and early 2000s. 5 The country’s weak pharmaceutical industry is due to factors such as a lack of access (perceived or real) to capital, tariff structures that favor low-cost imports, and an insufficiently skilled labor force. The latter was well documented in a 2011 study commissioned by the DTI to investigate the human capital outlook within the domestic pharmaceutical industry. The study highlighted considerable constraints as well as the lack of a coherent, evidence-based, demand-driven skills development strategy for the sector. 7
POLICY DEVELOPMENTS
Following the advent of democracy in South Africa in 1994, the 1996 Constitution declared that access to adequate health care (including medicines) is a human right and describes the state’s responsibility to ensure that sound regulations and laws promote affordability and improve access to health care (including medicines). The key policy objective of the 1997 “White Paper for the Transformation of the Health System in South Africa” was to promote equity and accessibility to health services. Pharmaceutical care was dealt with extensively in a document called the National Drug Policy (NDP), part of the White Paper addenda that guided the recalibration of the policy frameworks from the previous segregated health care system.8
As depicted in Table A, wide-ranging legislative reforms were enacted on both the demand and the supply sides of the pharmaceutical industry to promote access to medicines. Inadvertently, some of the legislative reforms had a profound impact on the pharmaceutical human capital in the country. Section 22F of the Medicines Act, for example, allows generic substitution; the Patents Act amendment allows generics to be registered while the original patent is still valid. These pro-generic legislative reforms led to an influx of generic drug applications at the Medicines Control Council (MCC), then the South African regulatory authority. The increase in drug applications created considerable challenges for the council’s ability to process applications, resulting in drug registration backlogs. These delays deny patients timely access to affordable, high-quality, safe, and efficacious medicines. 9 , 10
RECONFIGURATION OF THE PHARMACEUTICAL LANDSCAPE
Key developments in the South African health care system are likely to have a considerable impact on the pharmaceutical workforce. These include the National Health Insurance (NHI), the South African model of universal health coverage, which has been in a pilot phase since 2012.11 The NHI is intended to remove barriers to health care access, including medicines. This is expected to significantly increase the consumption of medicines, and will likely exert pressure on the supply side of the fragile market, which relies on pharmaceutical imports.
The South African Health Products Regulatory Authority (SAHPRA) has been established to recalibrate the local pharmaceutical industry. Introduced in 2018, SAHPRA replaced the 50-year-old MCC, which had not kept up with legislative changes. Registration delays spanning an average of three years or longer had become an industry norm owing to the influx of registration applications. 9 SAHPRA is expected to improve efficiencies and reduce timelines for medicine registrations. This goal is unlikely to be realized, however, unless agile skills development and retention strategies are adopted by the agency and in industry.