Healthcare consumables

Healthcare consumables
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Healthcare consumables
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Health Care
Health Care Providers
Business Model Description

Manufacture healthcare consumables.

Expected Impact

Improve coverage of healthcare service delivery, and increase access to quality healthcare.

Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
10% - 15% (in ROI)
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
> USD 1 billion
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
USD 1 million - USD 10 million
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
Good health and well-being (SDG 3)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Zero Hunger (SDG 2) Quality Education (SDG 4)
Users using MTTS services
Photo by Africa Health Supplies / MTTS
Case Study: Medical Technology Transfer and Services (MTTS)
Medical Technology Transfer and Services (MTTS), a UNDP Business Call to Action (BCtA) member, delivers innovative, cost-effective solutions for newborns in need of intensive medical care. MTTS was established in 2004 in Vietnam and now serves hospitals in low-income communities across Asia as well as in Sub-Saharan Africa and Central America.
Aimcare activity
Photo by BCtA / Aimcare
Case Study: Aimcare
Aimcare, a UNDP Business Call to Action (BCtA) member, promotes personal hygiene through healthcare products and services in low-income communities in Nigeria.
Country
Regions
  • Nigeria: South West
  • Nigeria: North Central (Middle Belt)
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Health Care
HC

Development need: The Sustainable Development Report 2019 scores Nigeria 28.0 on SDG 3. Indicators of maternal mortality, incidences of tuberculosis, life expectancy and adolescent fertility have stagnated. All other indicators show very little or no improvement.(1)

Policy priority: The Federal government health policy focuses on improving availability, accessibility, affordability and quality of health services by: increasing access to and revitalizing primary health care; expanding coverage to all local governments; providing sustainable financing via health insurance schemes; and reducing infant and maternal mortality rates.(2)

Gender inequalities and marginalization issues: 33.5% of women and girls 15 years and older still experience violence and emotional abuse, according to National Bureau of Statistics data from 2015. In 2015, 24.8% of women aged 15-49 made their own informed decisions regarding sexual relations, contraceptive use and reproductive health care. Early marriage impedes the growth and development of the girl-child, and exposes her to Vescio Virginal Vistulae (VVF), the Human Immune Virus (HIV) and Acquired Immuno-Deficiency Syndrome (AIDS). The percentage of girls and women who have undergone female genital mutilation/cutting remains as high as 39.9%.(13)

Investment opportunities introduction: An estimated USD 1 billion is spent annually on outbound medical tourism.(3)

Key bottlenecks introduction: Several challenges still persist including poor infrastructure, inequitable access, limited human resources and inadequate financing.(2)

SubsectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Health Care Providers
HC.3

Development need: Population growth increases the number of patients in need of diversified health services, particularly when 72% of health expenditure is out-of-pocket payments.(4)

IndustriesMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Health Care Delivery
HC-DY
Investment Opportunity Area

Healthcare consumables

Business Model

Manufacture healthcare consumables.

Market Size (USD)Describes the value in USD of a potential addressable market of the IOA.
> USD 1 billion

The market size for medical consumables is estimated at USD 59 million in 2020 and is projected to reach up to USD 65.2 million in 2021. Consumables represent the largest product area in the Nigerian medical device market, accounting for more than 30% of imports in 2016.(6)

ROIDescribes an expected return from the IOA investment over its lifetime.
10% - 15%

The estimated return rate for investors is 10.8% - 12.8%. This rate is a benchmark calculated as a cost of equity, reflecting an average return required by investors active in the subsector.(7)

TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)

Investments in healthcare consumables manufacturing are expected to generate cashflow within 5 years and profit within 7 - 8 years. (6)

Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
USD 1 million - USD 10 million
Capital - Limited Investor Interest
Access to capital is a critical roadblock, preventing healthcare opportunities from achieving their true market potential.
Market - Highly Regulated
Bureaucratic bottlenecks limit private investments in healthcare and create regulatory challenges.
Business - Supply Chain Constraints
Low service coverage
Sustainable Development Need

The health sector is underperforming or stagnating in all SDG indicators according to the Sustainable Development Report 2019. Nigeria's Universal Health Coverage Tracer Index is at 46.4.(1) Life expectancy is at 55.2 years, and the mortality rate for under-5s is 110.2 per 1,000 live births. Undernourishment continues to have a negative trend with 11.5% of Nigeria’s population affected.(8)

Underfunding of essential health products means Nigeria experiences persistent stock-outs and high expirations at service delivery points, irrational drug use, poor and parallel supply chain management systems, and inadequate warehousing with available ones not meeting minimum standards.

Local manufacture is plagued by poor infrastructure and protection from unfair international competition. Local manufacture supplies only 5% of local demand for medicines and other health products. Nigeria largely depends on imports to meet local demand for health products.

Gender & Marginalisation

Nigeria's maternal mortality rate is very high (512 per 100 000 in 2018). The meagre percentage of women of reproductive age whose need for family planning is satisfied with modern methods perpetuates the poverty trap for many Nigerian women, who incur additional financial responsibilities brought on by children.(13)

Expected Development Outcome

Investments help improve access to medical equipment for better service provision.

Investments help reduce cost of importing healthcare consumables.

Investments can help increase employment in the healthcare sector.

Gender & Marginalisation

Investments can increase access to quality healthcare services for all segments of society, but particularly women and rural communities.

Primary SDGs addressed
3 - Good Health and Well-Being
Good health and well-being (SDG 3)

3.1.1 Maternal mortality ratio

3.8.1 Coverage of essential health services

Current Level

917 per 100,000 births (15)

42 (worst 0–100 best) (15)

Target Level

Nigeria has an ambition to meet the 2030 maternal mortality ratio of under 70 per 100,000 live births.(14)

100% (15)

Secondary SDGs addressed
2 - Zero Hunger
Zero Hunger (SDG 2)
4 - Quality Education
Quality Education (SDG 4)
Directly impacted stakeholders
People
Population with limited access to healthcare services
Corporates
Hospitals, pharmacies, laboratories, other healthcare service providers
Indirectly impacted stakeholders
People
Consumers
Outcome Risks

Incorrect disposal of medical waste could be detrimental to health and the environment.

Impact Risks

Execution risk: Without careful planning, activities may not be delivered as planned and may not result in the desired outcomes.

External risk: External factors may disrupt delivery of expected impact by distorting the supply chains in medical consumables manufacturing and distribution.

What

Likely to have positive outcomes such as increasing access to safer healthcare consumables and reducing the cost of healthcare products.

Who

Hospitals, pharmaceuticals, consumers

Risk

Counterfeit products

Impact Thesis

Improve coverage of healthcare service delivery, and increase access to quality healthcare.

Policy Environment

National Health Policy: In February 2017, the government approved the third iteration of the NHP, following its inauguration in 1988 and a revision in 2004.(8)

The National Health Insurance Scheme, the National Health Bill, as well as the World Bank’s USD 500 million credit and public-private partnerships (PPPs) such as the Lagos Medical Park are expected to improve healthcare services and act as a catalyst for health sector improvements.(6)

The National Health Policy dives deeper into SDGs and establishes frameworks for improving healthcare efficiency and service delivery through the following policy thrusts: governance, financing, medicines and vaccines, infrastructure, data systems, research and development, public-private partnerships (PPPs) and community participation.

Financial Environment

Fiscal incentives: The Federal government issues a 3-5 year company income tax holiday for investments in healthcare and pharmaceuticals under the Pioneer Status Incentive (PSI) Scheme. This tax holiday also applies to companies investing in manufacturing medical supplies.(9)

Regulatory Environment

National Health Act (NHA) of 2014: This Act established a legal framework for developing, regulating and managing a national health system and set standards for service provision.(8)

The health sector regulatory environment provides a favorable atmosphere for investments.

Private Sector

Flint Atlantic Capital, Private Sector Health Alliance of Nigeria, Medipark International Limited Consortium and Ibile Holdings, SIemens Healthineers, Altona Diagnostics, Biomaxima, Genomica, Abott, BD, Biomerieux, Qiagen

Government

Federal and State Ministries of Health

country static map
urban
Nigeria: South West
The Lagos state government, through a public-private partnership (PPP), is working to set up a medical park to address some of the key challenges in Nigeria's healthcare sector.(10)
urban
Nigeria: North Central (Middle Belt)
A medical city is also being set up in Abuja. These facilities will provide an opportunity for industrial symbiosis along the entire healthcare value chain.(11)
Sector Sources
  • 1) Sachs, J., Schmidt-Traub, G., Kroll, C., Lafortune, G., Fuller, G. (2019). Sustainable Development Report 2019. New York: Bertelsmann Stiftung and Sustainable Development Solutions Network (SDSN). 2) Federal Republic of Nigeria (2017). Economic Recovery and Growth Plan 2017 - 2020. Abuja: Ministry of Budget and National Planning. 3) Medic West Africa (2019). 2019 Healthcare market insights: Nigeria. https://www.medicwestafrica.com/content/dam/Informa/medic-west-africa/english/2019/HealthcareInsights.pdf 4) World Bank Database.
IOA Sources
  • 5) Flint Atlantic (2018). Who we are. http://www.flint-atlantic.com/about-us/ 6) Medic West Africa (2019). 2019 Nigeria medical device overview. https://www.medicwestafrica.com/content/dam/Informa/medic-west-africa/english/2019/NigeriaMedicalDeviceMarketOverview.pdf 7) PwC analysis (2020), based on Prof. A. Damodaran data. 8) Sachs, J., Schmidt-Traub, G., Kroll, C., Lafortune, G., Fuller, G. (2019). Sustainable Development Report 2019. New York: Bertelsmann Stiftung and Sustainable Development Solutions Network (SDSN). 9) Nigerian Investment Promotion Commission (2020). Tax holiday available to the medical and pharmaceutical sectors. https://nipc.gov.ng/2020/04/14/tax-holiday-available-to-the-medical-and-pharmaceutical-sectors/ 10) State Intel. https://estateintel.com/development-lagos-state-medical-park-medipark-ikoyi-lagos/ 11) Abuja-Ng.com (2014). Abuja medical city project. https://www.abuja-ng.com/abuja-medical-city-project.html 12) Agary Pharmaceutical (2021). Agary Pharmaceutical Ltd .... trusted quality. https://www.agarypharm.com/about-us-2/ 13) Federal Republic of Nigeria (2017). Implementation of the SDGs: a national voluntary review. https://sustainabledevelopment.un.org/content/documents/16029Nigeria.pdf 14) Federal Republic of Nigeria (2020). Integration of the SDGs into National Development Planning: A Second Voluntary National Review (2020). https://sustainabledevelopment.un.org/content/documents/26309VNR_2020_Nigeria_Report.pdf 15) Sachs, J., Schmidt-Traub, G., Kroll, C., Lafortune, G., Fuller, G., Woelm, F (2020). The Sustainable Development Goals and COVID-19. Sustainable Development Report 2020. Cambridge: Cambridge University Press. https://dashboards.sdgindex.org/profiles/NGA