Insights
Clicks and Dis-Chem are well positioned to support COVID-19 vaccine rollout
Both Clicks and Dis-Chem are planning to offer COVID-19 vaccines. With a 45% dispensary market share and within close range of the majority of South Africa’s population, Clicks and Dis-Chem are uniquely positioned to support the COVID-19 vaccine rollout, from distribution to administration.
South Africa’s Department of Health is aiming to vaccinate a minimum of 67% of the South African population, numbering 40.3 million people. In order to achieve a task of this magnitude, the public sector will be partnering with the private sector for distribution and administration of the vaccine. Clicks’ Chief Commercial Officer, Rachel Wrigglesworth, said Clicks is “ideally placed” to support the government’s COVID-19 vaccination programme.
Vaccination access has been prioritised by the Department of Health according to three phases:
- Phase one: 2.5 million front line health care workers
- Phase two: 16.6 million essential workers, vulnerable population groups and persons with co-morbidities
- Phase three: 22.5 million other persons over 18 years of age
Health Minister Zwele Mkhize has said that government was looking at using mass vaccination centres as well as pharmacies to ensure that South Africans receive both doses of a vaccine. The majority of the vaccines will require a double-dose regimen. Johnson & Johnson (J&J) are also testing a single-dose regimen. The pharmacy groups will be involved in phase two and three of the rollout. To give an indication of the scale of this task, it will take 8,800 vaccinators, vaccinating 25 people per day, 365 days to achieve the targeted 40 million.
Clicks Group and Dis-Chem Pharmacies have the infrastructure, skills and know-how on a national scale to support the vaccination of the South African public. The two groups have a combined pharmacy and clinic network of 772 pharmacies, 479 clinics equipped with cold storage fridges and 450 full time nurses.
Over the last 12 months, the two pharmacy giants collectively accomplished;
- 1.5 million patient consultations through their clinics, including immunisations
- dispensed close to 50% of the country’s medicine
- administered 403,000 flu vaccines.
Vaccine route to market: The potential role Clicks and Dis-Chem might play
* Market Share: Clicks Group and Dis-Chem Pharmacies company filings 2020
Clicks’ bulk distributor, UPD, is the market leader in the distribution of drugs from manufacturing facilities to wholesale facilities. Clicks confirmed that it has the necessary temperature-sensitive systems to transport and store the vaccine, and stated that it is in talks with the government about how it can offer its cold-chain compliant distribution capacity.
UPD currently services Aspen, who has been contracted by J&J to produce 300 millon vaccines, and it is possible that UPD may distribute a portion of these vaccines. However, Aspen has announced that all vaccines produced for J&J will be exported. South Africa’s government is currently in talks with J&J amongst other manufacturers in an effort to secure vaccines.
Both Clicks and Dis-Chem are large players in the the wholesale and distribution of drugs to pharmacies and hospitals. From a pharmacy and clinic perspective, both have played an active role in COVID-19 testing and antibody testing including the rollout of mobile clinics and drive-through stations by Dis-Chem. These services can be adapted to include vaccination efforts.
Having two large, well-organised and prepared pharmacy groups is an asset to South Africa in the effort to overcome the COVID-19 pandemic.
* Stonehage Fleming Investment Management South Africa holds Clicks and Dis-Chem in client portfolios