South Africa

South Africa has a world-class private medical sector which is a popular destination for medical tourism. Meanwhile, the state sector is under-funded, plagued with inefficiencies and struggles to provide even basic care for those in need. These problems are compounded by one of the highest HIV prevalence rates in the world, and an increasing problem with multi-drug resistant tuberculosis.

In order to improve public health provision, the government is currently enacting legislation to create a nationalised health system. This envisages a transfer of resources from the private to public sector, in addition to restrictions on the business freedoms of private hospitals and medical aid funds.

South Africa is home to some of the world's leading manufacturers of generic medicines. As such, the government has tended to show a bias for procuring locally manufactured antiretroviral drugs (ARVs). One Indian drugmaker announced in June 2009 that it plans to sue the government, on claims that it had lost out to local manufacturers in a US$38.1 million contract for ARVs, although its price was 30% cheaper on the tender.

The South African drug regulator has also been criticised for imposing unnecessary delays on the regulatory approval of new medicines, especially those that have already received approval from regulators such as the US FDA.

VAT on medicines is 14%.