Medical Device Segment braced for change in South Africa


Trailing behind South Africa’s pharmaceutical market in both value and growth, the nation’s medical device industry has long enjoyed minimal barriers to entry and easy market access. But, with imminent onset of a new regulatory regime, both local and multinational players of all sizes may have to start imposing stricter governance standards over quality assurance standards and efficacy.

In 2013, the South African medical devices market was estimated at USD 1.2 billion, placing it among the top 30 largest in the world.  While South Africa’s pharmaceutical sector has grown to exhibit the most sophisticated and comprehensive regulatory environment on the continent, the nation’s medical device sector has remained relatively unencumbered despite its size. But as South Africa’s Department of Health looks to completely overhaul its healthcare system to improve patient outcomes and promote safer, cheaper, and more widespread medical treatment to all citizens, this particular industry is on the cusp of regulatory reform.

“Impending regulations are undeniably one of the main fields where important changes have taken place these past few years,” argues the Executive Officer of the South African medical devices industry association (SAMED) Tanya Vogt. “New government drafts demonstrate the extent to which industry viewpoints are now being taken into account, by highlighting more specifically the nuances and the differences between the medical devices and pharmaceutical industries.”

According to general manager of Bard South Africa, “In the current scheme, local manufacturers can easily bring in unregulated products from places with traditionally much less stringent quality assurance standards such as China or India.” While FDA approvals and CE marks certainly act as standardized protocol, they do not represent quality assurance—strictly undercutting the dedicated efforts of many multinational companies that invest substantial time and resources in employing the strictest governance standards in quality, safety, and efficacy.

“There are a lot of local companies introducing questionable products into the market at the same price point as multinationals, but without the same level of quality assurance,” elaborates managing director of Globus Medical South Africa Steve Klopper. “Although these particular players are making tremendous margins, they aren’t reinvesting anything back into the market and contributing to the sustainable development of this industry. The multinationals are the ones investing millions of dollars in educating the medical community and encouraging the safe and effective use of more value-adding solutions.”

“Without the proper quality control mechanisms, these efforts are undermined, and create less incentives for continued investments—which only serves to hinder the growth of this sector and all stakeholders involved,” asserts Klopper.

Other companies such as Dräger have experienced first-hand what type of consequences a lack of regulatory oversight can potentially entail. “We also see, especially in Africa, the trend of dumping, where companies would offload older devices that are at the end of their useful life in less developed places such as Kenya or Malawi that lack education and experience,” describes the country manager of Dräger South Africa Marius Fourie. “Contrary to popular thought, such actions create no benefits have limited service capabilities remaining, and might actually create its own set of complications and problems without the ability for maintenance.”

Although a transition that has long been announced and subsequently delayed, the MCC is slated to transform into a new independent entity called the South African Health Products Regulatory Authority (SAHPRA)—also encompassing medical devices within its scope. Henriette Viennings, managing director of MRA regulatory consultants, suggests that under this new system, “It is going to be a more technical weighting around the quality of the product. From that perspective it is more of a South African national standard accreditation driven system. If a product complies with the standards, such as ISO requirements, then it will not need to go through the whole registration process, unless it’s a high-risk device like a drug-eluting stent. That is going to be quite an interesting development as it is going to be a unique type of regulation that we’ve never had to meet as an industry.”

As with any type of industry-wide reform, the competitive landscape is bound to experience some form of evolution as a response. The managing director of regulatory consultancy MC Pharma Group, Henk Krebs predicts that as the regulatory regime develops, “a lot of Chinese or Indian companies that have been able to come to the market and steal quite a bit of the market share due to price competition will disappear because of stricter regulations. On the contrary, large multinationals such as Zimmer Biomet, J&J Medical, or Medtronic and the like are self-regulated and have products that follow strict quality control processes will survive and see market shares increase.”

Though, for many longstanding industry players, the topic of regulation is nothing new.  “In fact, SAMED came into existent 30 years ago in order to bring in regulation,” recounts the founder and owner of Baroque Medical Albert Denoon. “So, we’ve truly gone through the mull of implementing industry regulation. There’s a lot of trepidation faced by stakeholders in understanding the differences between the few thousand types of pharmaceutical products and the few hundred thousand types of medical devices.”

The general manager of Biotronik South Africa, Robbie Nel believes that moving forward, material progress and mutual benefits can only be realized by fostering greater dialogue between industry and government stakeholders. “From my perspective, regulatory bodies must make more of an effort to involve multinationals and help them moving forward because, although we’re for-profit, our commitments are steeped in improving the overall welfare of South African citizens. If the proper support structures and incentive mechanisms are put in place, I’m confident that more foreign companies will localize operations,” contends Nel.

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