HEALTHCARE

The SA Health sector comprises two hospital groups and two pharmaceutical manufacturers, with Adcock Ingram being majority owned by the Bidvest Group.

 INDUSTRY EXPOSURE

Business: The affordability of private healthcare is under pressure, given increasing costs, related to rising inflation. Ageing populations become a net draw-down on the pool, creating a significant adverse selection problem. Hospitals groups have turned to digitisation strategies to seek innovative solutions, but also bringing new challenges. Pharmaceutical manufacturers rely on large tenders - geopolitical destabilisation brings uncertainty to these contracts (e.g. loss of Indian ARV tender by Adcock Ingram). 

Environment: Below threshold materiality

Society: Healthcare inflation, together with aging populations in developed countries, is challenging existing business models based on premium service at premium cost. In SA, the private sector is vulnerable to over-servicing, while government, through its introduction of the National Health Insurance Bill, seeks to force the sector into broadening access to the uninsured. Issues include:

  • The war for talent and exposure to inducement

  • Transformation across the healthcare sector

  • Single Exit Price legislation (pharmaceuticals)

  • Over-The-Counter (OTC) trends

  • Restrictions on Codeine, following misuse and abuse

  • Loss of Anti-Retroviral ARV) tender (Adcock Ingram)

Governance: Concentrated power in leadership raises materiality, but generally a stable trend.

In this report

  • Netcare (NTC)

  • Life Healthcare (LHC)

  • Aspen Pharmacare (APN)

  • Adcock Ingram (AIP) 

Price: $595

Included:

  • Full 29-page report covering all 4 companies in the Healthcare sector

  • Introductory in-person consultation, scheduled at your convenience; learn more about how to link FarSight scores with your valuation process, and get up-to-date answers to specifics on each company under coverage.