Medical device manufacturers are calling on the government to provide incentives to bolster the sector’s growth prospects and the entry of new players, following the launch of the industry’s master plan this week.
The medical technology (medtech) industry makes a range of products from syringes, disinfectants and bandages to hi-tech electromedical devices such as magnetic resonance imaging machines (MRI) and digital cameras, along with related software.
This week, together with the department of trade, industry & competition (DTIC), the sector launched the medtech master plan to create a “proficient and competitive” industry over the next three years, with a special focus on small business development. The aim is to supply domestic and international markets and “build productive and technical skills with the aim of creating 1,000 new jobs over the next three years”, the department said in a statement.
Peter Mehlape, chair of the South African Medical Technology Industry Association, one of the signatories of the master plan, said the industry would like the same kind of incentives that have allowed the local automobile industry to thrive.
“We can manufacture just about everything but the industry will need a little bit of that type of support from the governmen,” he said.
Mehlape said that during the pandemic manufacturers had given priority to supplying the markets where they were based, so such countries as South Africa had been last in line. “The only way to solve this problem is obviously to strengthen the medtech manufacturing industry,” he said.
If a product is approved in South Africa by the regulator, I don’t have to apply for another approval elsewhere that could take two-three years of approval. I should be able to sell the product across the countries
— Peter Mehlape, chair of the South African Medical Technology Industry Association
The master plan aims to encourage domestic innovation and manufacturing and identify areas that may need support through incentives and other forms of assistance.
He said the master plan was a road map and as the framework became clearer, “the more attractive I think the sector will become for even foreign direct investments, joint ventures and collaboration between local and international companies, who will also bring different skill sets to the local manufacturing sector. We’ve seen it work in other sectors where there are incentives in place.”
The medtech industry is valued at R21bn, with more than R4bn in exports. Over the next three-five years, the master plan seeks to launch local manufacture of products to the value of up to R1bn that are currently imported.
Three-quarters of the companies in the local medtech sector are classified as small or micro enterprises, with turnover of between R10m and R50m per annum. These supply about 80% of the locally made products on the market. According to a survey conducted by the South African Medical Research Council, South Africa has at least 136 medtech manufacturing companies.
Key issues include the regulatory framework and exports. The local medical industry regulator is in discussions with other countries to “harmonise and simplify the process”, said Mehlape.
“If a product is approved in South Africa by the regulator, I don’t have to apply for another approval elsewhere that could take two-three years of approval. I should be able to sell the product across the countries. In the same way that they do in the US and Europe. Africa needs to provide their own kind of regulatory approval stamp to make sure their products are safe to be used,” he said.
This will play a key role in creating an enabling environment to promote regional trade and generate much needed volumes through exports.
DTIC minister Ebrahim Patel said in a statement that the medtech sector offered a unique and significant opportunity for growth in South Africa.
“[It] has emerged as an increasingly innovative sector, developing technologies that can service both our local market and abroad. With the modalities for the African Continental Free Trade Area agreed, the African market provides a significant opportunity for growth in the sector. The African continent is currently a significant importer of medical technologies, with much of this demand within the scope of South African producers.”
Patel said the “action-orientated plan is based on identified competitiveness improvements, measures to reduce imports, drive demand and reposition the industry to become resilient under the intense global competition and pressure”.
Mehlape said transformation and training will also be key. The master plan is the 12th master plan to be finalised by the government. Others cover such sectors as sugar, poultry and clothing and textiles.
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