Healthcare Sector in Africa

2010 | Africa Medical & Healthcare news

The healthcare sector in Africa is showing signs of remarkable improvement as the quality of hospitals and the availability of qualified doctors has dramatically improved over the last few years. By making the transformation from traditional medicine to a modern and well structured healthcare system, many African countries have been able to meet the growing demands for quality healthcare services for their people.

 

The Council for Health Services Accreditation for Southern Africa (COHASA) has been accrediting many hospitals under its jurisdiction that meet the applicable predetermined and published standards. However, Africa’s healthcare industry is characterized by a huge division between the private and public sectors both in terms of facilities and funding. Perhaps the biggest problem facing the public sector currently is the rising incidence of HIV/AIDS, which is and will continue to place considerable strain on the public health system in many African countries.

 

As a result, there exist immense opportunities for the supply of a wide range of hospital equipment, instrumentation, machinery and allied medical products. Most of the requirements of the healthcare sector in Africa are imported from Dubai. Being a price-sensitive market, African buyers are always on the lookout for high quality, competitively priced goods to meet their requirements.

 

South Africa - Clicks Pharmacy Sees Scope for Major Growth

16 September 2010 | By Edward West

Johannesburg — Clicks Pharmacy is the largest corporate-owned pharmacy chain in SA and a major component of Clicks Group's growth strategy.

THERE remains considerable growth potential in SA for Clicks Pharmacy - the Clicks Group-owned pharmacy chain that operates in 254 Clicks retail stores - according to Dan Zinner, head of business development at the group. Clicks Pharmacy is the largest corporate-owned pharmacy chain in SA and a major component of Clicks Group's growth strategy   Mr Zinner said yesterday, in an interview at a conference in Durban, that Clicks Pharmacy was exploring opportunities in other African countries. Nevertheless, "the growth opportunity remains huge in SA" given that the group operated more than 370 Clicks stores across the country, and there were many of these stores where new pharmacies could be opened, Mr Zinner said.   The further establishment of pharmacies in Clicks stores in SA depended on a number of factors, including time, capacity, the shortage of pharmacists and the speed of regulatory processes. Opportunities also existed for the pharmacies to work with the government on initiatives such as the acceleration of testing for HIV, the national health insurance scheme and other changes within the medical aid industry, he said.

 

Willie Jordaan, head of professional services for Clicks Pharmacy, said the chain had worked hard to "improve efficiencies without affecting the quality of care", through "a tough period" after 2004 when the government first regulated the prices of medicine, and this had affected profit margins.

 

He said that from a pharmacy industry perspective, it was becoming important for the recent draft regulations on dispensing fees to be promulgated.

The draft regulations propose an increase in the dispensing fee of 30%- 32%. Mr Jordaan said Clicks thought the increase was "fair".

The draft regulations, although capping the amount that pharmacies may charge in dispensing fees, would improve margins for some pharmacies and help make healthcare more affordable.

 

Mr Jordaan said the shortage of pharmacists in the country was part of a worldwide trend and SA remained a recruiting country for pharmacists by large international groups.

 

 

African Medical Investments opens new boutique hospital in Maputo, Mozambique

10 May 2010 | By Edward West

African Medical Investments has opened its new 30 bed private boutique hospital, trauma centre & Well Woman Clinic in Maputo, Mozambique, replicating its successful first boutique hospital, Trauma Centre & Well Woman Clinic in Dar es Salaam, Tanzania, which opened a few months back. 

 

The opening of this facility is in line with the group’s  strategy to rapidly accelerate the roll-out of private boutique hospitals, Trauma Centres, Well Woman and Well Man Clinics across Africa to meet soaring demand for dedicated private medical services.

The group chose Maputo as a suitable location in which to extend its offering due to its large expatriate community and the low number of health facilities currently in the city.  The facility has 30 beds including three ICU beds and two neonatal ICU incubators.  Additional facilities include a full emergency department, a major and minor operating theatre, delivery rooms, a radiology department with CT scanner, digital X-ray and 4D ultrasound machines, occupational health services, a vaccination centre and a dedicated pharmacy.   The new facility complements African Medical's current healthcare portfolio which includes the Dar es Salaam hospital, the Trauma Centre in Harare and Airport Medical and Vaccination Centres in Johannesburg and Cape Town International Airports.     The company is also extending its current facility in Harare to include a full boutique 20 bed hospital and refurbishment work is also underway to establish a Well Woman and Well Man Clinic in Nairobi, Kenya.  It is expected that all these facilities will be fully operational by the end of June 2010.

African Medical CEO Vivek Solanki said: “By the end of June, with three hospitals and three clinics operational, we will have a solid foundation from which to make strong expansionary progress.” At the end of April African Medical completed the drawdown of funds under its equity line agreement with a fund managed by New York based Harbinger Capital Partners LLC, and the £2.995 million raised will be used to further advance the company's growth strategy.

 

The new funds completed the drawdown under the US$47 million equity line agreed with Harbinger in October 2009. In the latest transactions, The New York firm will subscribe to shares representing 6.05% of the enlarged capital of African Medical. This will consist of 6.5 million shares at 23 pence and 6 million shares at 25 pence and will up Harbinger’s interest in African Medical to 41.89%.

 

African Medical will use the proceeds to fund its expansion plans. It aims to be managing a total of ten healthcare facilities by 2012.

 

 

Tanzania - The Medical Imaging Market

30 Jan 2010 | By Frost & Sullivan

This Frost & Sullivan research service titled The Medical Imaging Market in Tanzania provides a strategic analysis of the medical imaging market in Tanzania, with the Market Engineering research methodology. This measurement-based methodology focuses on market measurement, analysis, forecasting, strategy development and monitoring. In this research, Frost & Sullivan's expert analysts thoroughly examine the following technologies: ultrasounds, computed tomography (CT) scans and X-rays.

 

The Tanzanian Medical Imaging Market Offers Significant Potential for New Technologies. Although the Tanzanian medical imaging market is not yet advanced, it provides primary diagnosis to a large proportion of its population. Therefore, it has a significant potential for suppliers to introduce new technologies. The growth of the private sector has paved way for innovative technologies such as three-dimensional/four-dimensional (3D/4D) ultrasounds and computed radiography (CR) X-ray systems, which continue to be mostly limited to private hospitals. The public sector is focussing more on equipping all the referral hospitals with advanced technologies. In 2000, the Tanzanian Government, in collaboration with the Dutch Government, initiated a hospital revitalisation programme, which included the provision of basic medical imaging systems to regional and district hospitals. The installation of these X-ray and ultrasound units was completed at the end of 2003, and many of these systems are now almost at the end of their lifecycle.

 

'The replacement or upgrading of these systems will subsequently provide solid opportunities for vendors in this market,' says the analyst of this research. 'Suppliers will have the opportunity to upgrade old and outdated equipment with new technologies such as 3D/4D ultrasound and CR x-ray systems, which have considerable scope in this market.' The digitisation of X-ray systems took place in Tanzania only during the last two years. Although the Tanzanian medical imaging market is still small, the advantages of digital processing are anticipated to drive sales in this market significantly. A slow, but steady, adoption is expected. Digital systems provide the benefits of image manipulation to enhance contrast, radiation control and patient throughput. Moreover, these systems are more cost effective than analogue radiography.

 

Ultrasound systems with 3D imaging are likely to drive sales in the medium-to-long term, as the benefits of real-time reconstruction and visualisation of images can be seen with greater precision, while managing to reduce the levels of invasiveness and, consequently, the cost. This 3D technology has proven to be particularly beneficial in obstetrics by providing information that is not easily obtainable in 2D imaging.

 

Flexible Financial Options by Manufacturers is the Key to Success in this Market. There has been an increasing influx of low-cost Chinese and Indian brands into the price-sensitive Tanzanian medical imaging market. With the government favouring public tenders, major market participants have been compelled to compete with low-priced and low-specification products. Many high-quality product providers are finding it challenging to convince the healthcare decision makers about the economic and technical benefits of their products. 'Competitors in this market are driven to review their pricing policies while, at the same time, making sufficient profit in order to achieve revenue growth,' explains the analyst. 'Thus, the trend of price cutting remains a challenge for various companies as they attempt to compete with low-cost participants.'

 

 

African Medical Investments plans expansion of healthcare facilities

By Medical Tourism News

Africa is a continent that has a few well-off countries with good medical facilities, such as South Africa, but many more where facilities are less than adequate, often due to lack of  funding by governments. Recent years have seen more private companies moving in to fill the gaps. Any new hospital or clinic in Africa must have a first priority of serving the country it is in. Secondly it has to deal with international travelers and expatriates there for work or retirement. Thirdly it has to deal with medical tourists. Unlike many other continents, in Africa, medical tourism is more driven by need rather than want, due to lack of local facilities. It is often easier to travel to a clinic across a border, than it is to go to one in their home country. Also there is a growing middle-class who can afford to travel for treatment, and increasingly they prefer to stay within Africa rather than go to Europe or Asia.   African Medical Investments is providing healthcare in niche areas, particularly to the expanding African middle classes and expatriates. It is looking to capitalise on the growing demand for quality medical services in Africa with recently secured funding from US based hedge fund Harbinger Capital. Progress with negotiating new facilities in new target cities and increasing the number of patients has been good. African Medical’s Vivek Solanki says, “ We are being approached by foreign governments with requests for medical facilities in their cities. ”   Earlier this year it opened the first of a number of planned clinics and well women centres aimed at meeting the demand for dedicated healthcare services across Africa. The first development was a 30-bed boutique hospital and well-woman clinic in Dar-es-Salaam, Tanzania. As with other clinics, it is managed and operated by African Medical's wholly owned subsidiary, VIP Healthcare Solutions Limited (VIP).

It currently has five facilities, and the company is evaluating additional cities that meet its investment criteria. Since then it has opened a similar hospital in Cape Town. The Maputo Trauma Centre & Well Woman Clinic will open in March next year in Mozambique. Accra in Ghana and Nairobi have been identified as suitable for a Well Woman and Well Man clinic. African Medical is also in discussions with the authorities to establish boutique hospitals, trauma centres and Well Woman clinics in Kampala in Uganda and Kigali in Rwanda, which display the vital criteria including high number of expatriates and members of the African middle class. When the company bought VIP in November 2008, it already managed the Airport Medical & Travel Vaccination Centre at Johannesburg International Airport and The Trauma Centre in Harare.

 

The target of 10 facilities in total by 2012 and 15 by 2015 remains unchanged, with this goal looking yet more achievable now with the new funding agreement with Harbinger. More patients are expected to fall into the company’s target audience as more international investment is directed towards Africa.

 

 

Kenya - Import Enough Pain Killers, Health Ministries Told

23 September 2010 | By Daily Nation

The Kenya Cancer Association has urged the two ministries of health to intervene and ensure steady supplies of painkillers. This comes in the wake of reports that hospitals had run out of morphine, which is used by terminally ill patients, mostly suffering from cancer and Aids, to manage pain. "The Kenya Medical Supplies Agency (Kemsa) does not import morphine, ensuring availability of this critical palliative care medicine is left to the private sector.

 

"Although advocacy groups and non-governmental agencies involved in palliative care are making frantic efforts to bring in some morphine, this has not borne any fruits and patients around the country continue to suffer," the association's chairman, Mr Newton Siele, said. The government, he said, had a constitutional obligation to ensure patients access the painkillers. To alleviate the shortage, Mr Siele recommended that morphine be imported and distributed by Kemsa. This, he said, would avert stockouts and guarantee reliable supplies to even the most remote of locations. The drug is imported mostly by certified chemists to avoid abuse.

 

 

Private Equity Taps Health Sector Growth

June 2010 | By Steave

Private equity funds are lining up for entry into Kenya's health sector in a move that could add a profit segment to the cost of treatment and spark a fresh rally of medical costs in the country. Health sector players say private equity's interest in private hospitals has more than tripled in the past two years and is expected to peak at not less than Sh1 billion by end of the year.

 

Private equity (PE) interest in Kenyan hospitals began in 2008 with TBL Mirror Fund BV's purchase of a significant stake in Meridian Medical Clinics for an undisclosed sum. That move was followed early this year by Aureos Capital's buy into the Nairobi Women's Hospital for Sh200 million.

Acumen Fund, another private equity firm, has also bought a stake in a start-up eye hospital and a pharmaceutical franchise, while Karen Hospital is in talks with an unnamed PE fund for money to expand its presence in East Africa."We are in discussions with a private equity fund for possible short and long-term capital partnerships," said Dr Ernest Mureithi, the chief operating officer at Karen Hospital. The Nairobi Hospital also confirmed that it is looking for a possible PE fund to boost its expansion plan. "A lot more PE funds are eyeing the health sector, which they now see as a profit centre rather than just a social service," said Milton Lore, the managing director of the African Venture Capital Association. Ongoing transformation of medical services into a viable investment platform for private equity is attributed to the recent expansion of Kenya's middle class between 2006 and 2007 with robust economic growth. The growth of the middle class is expected to continue this year as the economy recovers, pushing up demand for private health services that private equity is hoping to tap. The value of health services in Kenya has risen steadily from Sh33 billion in 2004 to Sh51 billion in 2008, according to the Economic Survey 2008.

 

That growth is being driven by the pharmaceuticals segment that is now valued at Sh17.92 billion, according to Business Monitor International, and is expected to register a double-digit growth this year and hit the Sh32.12 billion mark by 2014. The rising interest of PEs in the health services is in line with the general interest by investors from mature economies in Africa's most robust sectors such as small and medium scale enterprises.

Foreign PE's interest in Kenya has been rising steadily from five in early 2000 to an estimated 25 currently. A recent study by the International Finance Corporation found that Kenya needs between Sh1.8 trillion to Sh2.2 trillion in new investments by 2016 to keep pace with its development goals, half of which is expected to come from the private sector. Health experts however warned that the entry of PEs into medical services, though positive and desirable for the sector to maintain the tempo of demand, is likely to result into higher costs as hospitals factor in the necessary margins to meet the expectations of the new shareholders. Kenyan hospitals have largely operated on the social principles that are hinged on a business model targeted at meeting operating costs and modest returns. The entry of investors with a profit motive therefore sets the stage for a review of the business plans and price increases to meet the new shareholder goals.