Conducting a comprehensive diagnostic assessment and developing a roadmap for unlocking pharma and medtech sector potential in South Africa

Background and Scope
SMC team was engaged by IFC to support IFC team in conducting a comprehensive diagnostic assessment and developing a roadmap for unlocking sector potential in South Africa across pharmaceuticals, biotech, and other product segments.

Scope of review:

Demand and supply-side considerations – Review comprehensively the continental, regional, and South African national market to assess demand dynamics, areas of growth, expanding opportunity, and competitive landscape.

Firm-level competitiveness and operating environment – Conduct a detailed review of the industry value chain, access to key inputs, industrial infrastructure, firm-level competitiveness, policy and regulatory enablement, and the ecosystem, assessing the collective impact of these factors on the South African industry.

Strategic opportunity for South Africa and potential for competitiveness and scale – Evaluate strategic opportunities for South Africa by benchmarking industry operations and the ecosystem against regional peers in Africa and global pharmaceutical manufacturing hubs to assess the potential for competitiveness and scalability. We will assess opportunities and challenges for growth and develop a roadmap for nurturing sustained competitiveness and scale.

Our Approach
The team adopted a mixed approach of secondary research and primary interactions with key stakeholders to analyze and assess the pharma and medtech industry in South Africa and benchmark with the countries, which is critical to develop a roadmap for sector development in South Africa.

1. Secondary research includes reviewing publications, reports, and data from the public domain. This covers any documents from continental/global development anchors such as WHO, Africa CDC, African Union Development Agency-New Partnership for Africa’s Development (AU-NEPAD), World Bank (WB), African Development Bank Group (AFDB), Unitaid, government procurement entities, and global pooled procurement agencies (Global Fund, PEPFAR, UNICEF, GAVI, etc.), publications from the South African government (NDoH) and other policy documents, regulatory documents and information published by SAHPRA, publications from individual companies or industry associations, market research and analyst reports, trade data on imports and exports, etc.
2. Primary research involves interviews with key stakeholders, including industry experts of South African firms and firms from peer countries and globally established firms, regulatory authorities, anchor institutions in research and innovation, investors and development partners, etc. Categories of primary stakeholders and target coverage are discussed below. Through primary interactions, we will validate secondary findings and gain a qualitative perspective, providing holistic insights into opportunities and challenges for value chain development.

Key activities:

• Initial whiteboarding of market segments to support foundational framework for identifying and defining market segments and user archetypes.
  • Classification of market segments and use cases across.
  • Define preliminary use cases in the beginning and review at the intersection of use case and archetype of users.
  • Will guide primary research coverage and initial analysis.

Segments: Public Hospitals, Private Hospitals (Tier 1), Private Hospitals (Tier 2), Home Care Providers

• • Current practices and competition by archetype of user / use case – Based on the identified use cases across chronic disease management, ICU care and routine diagnostics, to
    • Review current practices and competition across market segments and how use case is currently addressed including through clinical protocols and technology adoption (direct competitive devices and other alternative devices)
    • Identify direct competitors and alternatives for each use case along with their business models, and assess how competitors address the identified use cases and the effectiveness of their solutions
  • Price and high-level volume estimate by user archetype
    • Assess potential for adoption near term, pricing possibilities and potential business models by user archetype
    • Assess overall market opportunity and merit in targeting the market segment near term or develop a phase-wise target model based on activities required to enable product adoption in the market
    • Assess level of price sensitivity and pricing window / business model scenarios
  • Scenario modelling and recommendations
    • Based on the above, model scenarios for possible business models and implications for near to midterm scale-up (3 year or 5-year potential).

Study Output
Report with actionable recommendations for Datavitalis on India’s go-to-market strategy, considering identified opportunities and potential challenges, and key priorities for market entry, such as target segments, marketing strategies, and partnership opportunities.