By Lindsay John Curran, Managing Director of VIVA Medical (Pty) Ltd
The Coronavirus (Convid-19) has affected every business and person throughout South Africa and indeed the globe, but particularly the local healthcare industry, which is being stretched to its limits and beyond. Never in the short history of our hard-won democracy has our country been confronted by such a severe situation with potentially dire consequences. This is a situation that we will overcome if we all work together.
South Africa’s economy is the largest on the African continent but the economic growth in South Africa has slowed due to low global commodity prices, exchange rate fluctuations and some very poor political decision-making over the past decade. In his budget speech on 26 February 2020, Finance Minister Tito Mboweni’s stated that in this fiscal year 20/21, the State’s total expenditure is projected to be R1.95 Trillion while spending on HEALTH is budgeted at R230 Billion or 11.9% of GDP. This oddly enough equates to almost R4,000 per person per annum.
This GDP healthcare spend per capita is 4% higher than the WHO’s recommended spending for a country of our socioeconomic status which raises some serious questions given the state of our public hospitals. Of greater concern are our health outcomes which are still trailing in comparison with similar middle-income countries and this poor performance is compounded by the fact that South Africa spent R99.2 Billion on medico-legal claims to patients and their beneficiaries in 2019 as a result of negligence and injuries.
The current COVID-19 healthcare crisis raises critical questions around our preparedness to respond to the needs of our healthcare workers and the public in general.
These unprecedented global developments have had an immense impact on our ability to provide our healthcare workers with protective gear. Most importantly, it places our people’s health at risk when we hear every day of doctors, nurses and paramedics who do not have the necessary protective gear and disposable products they need when treating patients. These unsung heroes are being exposed to this life-threatening virus. Fortunately, South Africa got out of the blocks early and instituted the lockdown which has given us a window of opportunity to slow the spread of the virus.
Reports from other countries, as at Thursday 9 April, shows that in the UK, 72% of doctors cannot get hold of a mask, 77% report shortages of long-sleeved gowns and 43% cannot always use a visor or goggles when they need them. In Italy, 61 Doctors have died from contracting the virus while Spain has the world’s highest reported rate of COVID-19 infection for doctors and nurses. 15,000 health workers in Italy are now sick or self-isolating, making up 14% of confirmed cases in the country, according to the Italian health ministry. Spanish doctors and nurses say they lack protective equipment needed to treat patients safely in crowded hospitals. Their government’s emergency health chief admitted last week that the shortage may have fuelled the high rate of infection among medical professionals.
Which brings us to the ‘covert’ aspect of our healthcare crisis (the definition of ‘covert’ in the dictionary refers to words such as ‘concealed,’ ‘secret’ and ‘disguised’). This raises this question: Is there some hidden secret why South Africa has no locally manufactured protective equipment? Why is it that, despite having developed some of the world’s leading healthcare technology, there are no locally manufactured medical masks, gloves and basic protective equipment for healthcare workers that meet the standards and regulations in South Africa?
We read in the media that:
These funds are predominantly being used to purchase essential medical items, mainly medical and surgical masks and basic items that are being purchased from foreign countries, mainly China and India. Despite the strong push by local medical device manufacturers, there has been very little support by government to grow the local medical devices manufacturing market, in particular, the low technology sector to produce items such as surgical and respiratory masks, gloves, gowns, surgical packs, syringes, and infusion sets which are basic items that are used in hospitals and clinics.
Why have local entrepreneurs not ventured into the medical devices manufacturing sector? Perhaps we need to understand the purchasing practices of the biggest consumer of these products in South Africa, the government. Consider that Government Preferential Procurement Policies are biased towards the cost of medical devices and not necessarily the value of the product.
PREFERENTIAL PROCUREMENT REGULATIONS, 2017 allocates business via an intricate formula on a 90:10 basis, where 90 points are allocated to price and 10 points are allocated to local manufacture and B-BBEE empowerment. Simply put, in terms of Regulation 7 (2) of the Preferential Procurement Regulations 2017, the bidder with the highest number of points (read ‘cheapest’) will be allocated the business. There is little regard for local employment, investment in the local economy and reinvesting in the GDP of the country.
As George Sebulela, the president of South African United Business Confederation (SAUBC) and president of African Entrepreneurs Council (AEC) published recently, the Preferential Procurement Policy Framework has assisted in establishing a market for South African produced medical devices and these will continue to grow. A critical element, however, is missing. Although certain products are given protection by The Dti as a designated sector, the medical devices sector is not a designated industry or sector. The Preferential Procurement Policy Framework Act (PPPFA) regulations came into effect in December 2011. So, while items such as textiles, set top boxes, buses and furniture are deemed to be critical items, there is no place on this list for basic medical equipment like medical masks or syringes or gloves and all those basic items.
Designating the Medical Device Sector has been a “priority” for some time but more pressure has to be placed on the Department of Trade and Industry to move ahead and assist the sector in reaching its full potential and to utilize national resources such as the universities and other facilities such as the Cape Health Technology Park”
South Africa has a legacy of health technology innovation and development so we don’t have a lack of skills to innovate and manufacture medical devices. Here is a short list of accomplishments:
In a 2014 study by Deloitte – commissioned by the DTI and financed by the IDC – the analysis of trade data revealed that medical device imports make up 90% of the total medical device market in South Africa. This means that we import almost all medical equipment needed to fight the COVID-19 virus. In a country with massive unemployment and poverty this must surely be a golden opportunity for SMME’s to prosper … or is it?
A Medical Research Council (MRC) PATH Report dated March 2014 stated that:
“The country has a unique advantage in this endeavour due to its health technology innovation capability, geographical location, BRICS status, and nascent medical device and diagnostic expertise and success. South Africa faces tremendous challenges through disease burden, economic constraints and lack of skills availability. These challenges emphasize the potential value of developing the local medical device and diagnostic industry.
South Africa can develop its medical device and diagnostic industry if specific and aggressive actions are taken. Given the importance of governmental engagement in this process, success will be dependent upon strong disciplined political leadership. It is vital to the success of this initiative that this be driven from the ministerial level within government and it provides a pathway to the goals of the national development plan 2030.
To initiate this meaningful change, strategic alignment across key stakeholders is of primary importance as without this the task will be impossible. Critical impediments to the development of the local medical device and diagnostics industry need to be addressed. A robust local regulatory and quality system must be established and enforced. The public procurement system should give enhanced support to the local industry, and procurement must become transparent”
The Department of Trade and Industry (The Dti), in collaboration with the Western Cape Government, established The Western Cape Medical Devices Cluster in 2017 to address this serious deficit on the balance sheet in SA’s healthcare sector. Given the vibrant medical technology manufacturing sector with 44% of all medical devices manufactured in the Western Cape and Gauteng at 41% (Deloitte 2014), the study also listed the barriers to entry and manufacturing in South Africa. These were
identified as the regulatory environment and government policies. Unfortunately, The Dti has failed to process the funding promised to The Western Cape Medical Devices Cluster.
In conclusion, South Africa’s Department of Trade and Industry and National Treasury have missed an opportunity to grow the local medical technology industry despite numerous studies undertaken by their own departments. The current procurement policies favour imported medical devices over locally manufactured products while there has been little financial support to entrepreneurs to manufacture basic medical devices.
The Minister of Trade and Industry needs to stimulate this critical sector of the economy by providing incentives for companies to invest in local manufacturing of these basic medical devices and then to purchase from them! A group of basic medical devices should be designated in terms of the procurement policy which will dramatically reduce our reliance on imports while also creating employment around the country. Aggressive actions are urgently needed to avoid a repeat of the current situation.
Perhaps one of the positives coming out of the COVID-19 pandemic will be a realisation that a vibrant medical device industry has the potential to make a significant and long-term contribution to the health of all South Africans, as well as contributing to a healthy economy.
Lindsay John Curran, Managing Director of VIVA Medical (Pty) Ltd, has over 40 years of experience in the local medical devices industry.
The views expressed in this article are my own and not those of the Western Cape Medical Devices Cluster (WCMDC) or the Medical Device Manufacturers of South Africa (MDMSA) or the South African Medical Technology Association of South Africa (SAMED).