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.