Kenya - Medical EquipmentKenya - Medical Equipment

All figures in millions of USD with exception of exchange rate in Kenya shillings (Kshs) 

*Data unavailable
Applicable HS Codes: 901811, 901812, 901813, 901814, 901819, 901820, 901831, 901832, 901839, 901841,901849, 901850, 901890, 901920, 902000, 902110, 902129, 902140, 902150, 902212, 902219, 902230,
Total Market Size = (Total Local Production + Total Imports) – (Total Exports).

Data Sources::
Total Market Size: Global Trade Atlas
Total Local Production: N/A
Total Exports: N/A
Total Imports: Global Trade Atlas
Imports from U.S: Global Trade Atlas
Exchange Rate:  Central Bank of Kenya

Kenya is a promising market for medical devices and has been ranked as the fastest growing market in the sub-Saharan Africa region (SSA) according to the Business Monitor International (BMI). Kenya’s conducive business climate offers an excellent environment for market entry.  Almost all medical devices are imported as domestic production has primarily been limited to basic consumable items. Imported devices could be new or in some cases refurbished as long as they comply with the standard requirements.

Demand for medical devices remains high as many healthcare facilities require modernization. In both the public and private sector, there is a demand for high quality, affordable and efficient medical devices. In the private sector especially, there is a steady demand for western standard therapeutic and diagnostic equipment. The U.S market share for medical devices was estimated at 19.8% in 2017, which places the country at second place behind the East for equipment imports whose market share is 32.1%.

Over half of Kenya's healthcare services are provided by the public sector, through the Ministry of Health (MOH), other government funded bodies, and donor partners, including the United States. These services are supplemented by those offered in hospitals and clinics that are operated by private companies, NGOs and various faith-based organizations such as the Kenyan Episcopal Conference, Christian Health Association of Kenya, and the Kenyan Red Cross.

In June 2013, the devolved Government of Kenya passed a law that enabled devolved healthcare to all the 47 counties, which meant the establishment of a level 5 and level 4 hospital in each of the counties. For these developments to take place, the medical equipment facilities needed to be expanded and modernized.

Most recently, the major problems related to heavy capital expenditure on medical equipment have been addressed through the Managed Equipment Services(MES) project, a leasing model which was launched by the government in February 2015. The multi-million-dollar project, was fully financed by the MoH as the plan is part of the government’s vision to transform the health sector, and address inequalities in access to quality healthcare.  The MES project was been designed to cover six critical areas of care: dialysis, emergency, maternal and child health, basic and advanced surgery, critical care and imaging services.

To address the needs for these key areas, the equipment procurement was divided under seven clear categories: Theatre; Sterilization; Laboratory; Dialysis; Intensive Care Unit (ICU); Radiology which also covers Imaging (X-ray).  A top U.S. medical device manufacturer was among the five companies that were awarded the contract by the Ministry of Health (MoH) under the Managed Equipment Service (MES) model. The firm has been applauded by the government of Kenya for the success of the program.

Cancer-related deaths have been exacerbated by the shortage of medical equipment used in the diagnosis and treatment of the disease as well as the few number of oncologists in the country. Patients have previously had to wait for months to access treatment which often results in the disease becoming terminal.  Most patients who can afford have resorted to seeking treatment outside the country.  To deal with the crises the government of Kenya has pledged to set up nine centers of excellence manned by specialists Kenya. The internet interface on the equipment would link the hospitals with the specialists who would view images sent by hospital employees and prescribe treatment for the patients.

The country also serves as a medical tourism destination with visitors and senior government officials from the neighbouring countries often coming to seek medical treatment in private facilities with ultra modern equipment and care services.

Medical Device Procurement

Public procurements for both medical equipment and pharmaceuticals are done by the Kenya Medical Supplies Agency (KEMSA), a state corporation and a specialized medical logistics provider for the Ministry of Health. Centralized purchasing and procurement are often used in both public and private hospitals to obtain economies of scale. KEMSA, the largest source of healthcare public procurement in Kenya uses either; open international tenders, open national tenders (limited to local Kenyan suppliers only), restricted tenders or direct procurement (from government agencies only) to source for products.  Most tenders usually run for a two-year period.

All National and local level facilities are by law obliged to first purchase from KEMSA, and only if the items are not available, are they allowed to source their supplies from other private sector distributors. KEMSA procures medical supplies for county governments, referral hospitals, and for programs funded by donors. KEMSA does not receive direct funding from the GOK, as it relies on a revolving fund which is dependent on the payment from the public purchases and has program support partnerships with various donors such as; UNICEF, Global Fund, DFID, USAID, KFW, UNFP, and JHPIEGO. GOK funded programs prefer local suppliers and range from 6-12% of total procurements.  All public tenders are advertised on the treasury website and follow the Public Procurement Act.

Regulation

The Ministry of Health (MoH) is the lead healthcare policy-setting government institution in Kenya. The Pharmacy and Poisons Board (PPB), an agency under the Department of Medical Services, regulates the registration of medical devices.

As of September 1, 2017, all medical devices, food supplements, medical cosmetics, herbal products and other allied borderline healthcare products must comply with the Pre-Export Verification of Conformity(PVoC) program for importing into Kenya. These products will all require a Certificate of Conformity (CoC) for customs clearance at the border. The importers of these products are therefore required to obtain the CoC for their goods before applying for Import Permits from the Pharmacy and Poisons Board (PPB), through the Kenya National Single Window Electronic (Kentrade) System.

The Kenya Bureau of Standards (KEBS) and the Pharmacy and Poisons Board (PPB) announced the new import requirements to protect the public against products that do not comply with local quality standards and technical regulations. These new regulations for imported medical devices will increase compliance for importers and drive up standards in the Kenyan medical device market.
The government also announced the exemption of medical equipment and apparatus from VAT, under the 2017/18 budget, which continues to drive and encourage investment in the health sector in Kenya. According to BMI these exemptions will support strong medical device market growth and is expected to register double-digit increases every year between 2017 and 2019.

Leading Sub-Sectors

Leading private sector hospital groups are stressing the importance of high level branded equipment and have invested in the latest, most expensive, medical devices. Best prospects for medical devices include; CT scanners, ultrasound units, X-ray equipment, MRI equipment, angiography, endoscopy, biochemistry, hematology and immunology systems, and radiotherapy machines. Patient aids are expected to have the highest growth over the next few years.

Recently issued government tenders for medical equipment indicated requirements for basic equipment such as anesthetic machines, anesthetic trolleys, hydraulic operating tables, delivery beds, infant incubators, mortuary trolleys, hydraulic operating tables, mercurial sphygmomanometers, and oxygen flow meters among others. Electro-medical devices (X-ray machines, ultrasound scanners, mammography units, and ECG machines) are also in demand.

Opportunities
Efforts by the government to make healthcare accessible to all the citizens across the country and the ongoing Managed Equipment Service (MES) project will offer business opportunities for  U.S. medical equipment suppliers, who are in an excellent position to increase their market share in Kenya due to U.S. technical competitiveness.

Kenyan users appreciate the quality and reliability of U.S. medical equipment, although generally higher prices of U.S. equipment relative to some competitors  remainis an disadvantage during procurementsissue. Leading private sector hospitals are very active in modernizing their medical equipment inventories, while public sector hospitals are expected to engage in a re-equipping strategy following improved budgetary allocations. At present, most public health institutions lack basic medical equipment.
Under the country’s Vision 2030, the government is pursuing the nationwide rehabilitation of major hospitals and community health centers with plans to establish at least one model health center in every constituency. The construction of these new facilities has increased the demand for medical devices.

The President of Kenya has also initiated an ambitious economic development plan, dubbed the “Big Four” Strategy, that will drive investments for the next 4 years and aim to achieve four critical objectives, one of which is Universal Healthcare Coverage across Kenya, detailed below. (The other three focus areas of the Big Four agenda are: Manufacturing; Food Security; and Affordable Housing.)

As of June 2018, approximately $4.6 billion of the government of Kenya’s proposed $24.8 billion budget for FY 2018/19 has been allocated for Big Four investments, $437 million of which will go to the Universal Healthcare Coverage goal. This is the largest budget allotment among the four Big Four goals.

There is also a demand for supply chain solutions involving knowledge and technology to effectively distribute pharmaceuticals and medical supplies. The recent enactment of the Special Economic Zones Act (2015-SEZA) presents an opportunity to invest in manufacturing plants for medical supplies to the region.

Universal Healthcare Coverage (UHC) under the “Big Four” agenda

As the government pursues its UHC goal, the Ministry of Health is prioritizing broadened access to services, strengthened primary healthcare, increased medical staff, adequate medical supplies, digitized health operations, and scaling up the National Health Insurance Fund. Improved healthcare access across the country is critical to relieve the over-burdened National Hospital system.
The private sector will be instrumental in realizing the universal healthcare agenda by improving access to quality medicines through co-payments for all Kenyans which will reduce the cost of community medical services. The private sector should also not only be viewed as a source of funding, but also a source of experience and capabilities. The value and contribution that the sector can bring to this process by delivering innovation, increasing access, and helping to strengthen healthcare systems is being recognized more and more, and the sector should be ready in supporting the government in achieving UHC.

The government of Kenya hopes to use Public Private Partnerships to achieve all of this, but to help fund the initiative, the government plans to dedicate a percentage of excise duty and sin tax to health to ensure an increase of budgetary allocation to health from 7 percent in 2017 to 10 percent by 2022.

The Government of Kenya is targeting the counties of Kisumu, Machakos, Isiolo and Nyeri as the first pilot locations for achieving 100% health coverage.

The government of Kenya has embarked on an ambitious plan dubbed the “Big Four” Strategy which has four critical pillars to address some of the challenges in four key areas; Manufacturing; Food Security; Affordable Housing, and Universal Health Coverage (UHC).

Kenya’s burden of disease has historically been mostly focused on communicable diseases. However, recent research shows a largee and fast increase in the prevalence of non-communicable diseases such as cancers and cardiovascular diseases. This is mainly attributed to life style changes of Kenyans.

According to the World Bank Group, every year nearly one million Kenyans fall below the poverty line because of health-related expenditures. Access to affordable and quality remains a key issue. There are regional differences in the quality and distribution of care, with the best facilities located in Nairobi and the Central Province, and the most underdeveloped facilities in the North-Eastern Province and on some areas of the coast. Primary care facilities in rural areas often suffer from shortages of staff and medical equipment. Some patients choose not to seek care due to the distance that they would have to travel to reach the nearest health facility. Only 30% of the rural population has access to health facilities within 4km of their home, compared with 70% of the urban population

Under the Universal Health Coverage(UHC) Pillar, the government of Kenya has outlined various strategies to support the president's pledge and commitment to deliver equal access to high quality treatment to all Kenyans wherever they live, and regardless of their economic status. The government aims at achieving this by scaling up the National Health Insurance Fund (NHIF), increasing insurance coverage and achieving 100% coverage of the poor. This should contribute to reducing the 26% out-of-pocket (OOP) health expenditure to 12% by 2022. As a result, Kenyans would be guaranteed access to medical care and at minimal cost. Other sources for financing healthcare in the country apart from insurance include: general tax financing contributing 34%; out-of-pocket health spending contributing 26%; and development partners and non-government organizations (NGOs) who contribute 40%.

The National Hospital Insurance Fund (NHIF) is a State Parastatal that was established in 1966 as a department under the Ministry of Health. The Fund's core mandate is to provide medical insurance cover to all its members and their declared dependents (spouse and children). The NHIF membership is open to all Kenyans who have attained the age of 18 years and years and have a monthly income of more than Ksh 1000 ($10). The NHIF will play a central role in supporting the execution of Universal Health Coverage (UHC) in Kenya through provision of outpatient and inpatient packages at very low rates for the lower income segment. NHIF has over the years been reviewed to accommodate the changing healthcare needs of the Kenyan population, employment and restructuring in the health sector.

eHealth

Kenya is the only African country with a comprehensive eHealth strategy. The country has been ranked the second highest country from the African continent (behind South Africa), on eHealth innovation, and has made noteworthy progress in developing a sound policy foundation to manage the rollout of Health IT in the country. 

The Kenya e-Health Strategy is anchored on the achievement of Vision 2030, whose overall goal in health is to have an “equitable and affordable healthcare at the highest achievable standard” to her citizens. It is informed by the strategies and results emanating from the implementation of the Kenya Health Policy Framework, 1994-2010, the health sector strategic plans and the e-Government and shared services strategies implemented through the e-Government Directorate and the ICT Board respectively.

The government of Kenya has a well-defined eHealth strategy with a specific e-Health policy tool, the Kenyan e-Health strategy 2011-2017. The document identifies five main areas of focus and implementation: Telemedicine; Health Information Systems; Information for Citizens; mHealth, and eLearning.

As compared to other African countries, Kenya has a high mobile phone penetration, which creates a market for mHealth products such as connected devices and patient tracking.

These areas present excellent opportunities for U.S. companies in the Health Information Technology (Health IT), Mobile Patient Monitoring Platforms, and Telemedicine.

For More Information please contact:
Janet Mwangi
Commercial Specialist
U.S. Commercial Service, U.S. Embassy Nairobi
U.S. Department of Commerce | International Trade Administration
Tel: +254 (20) 363-6725;
Email: Janet.Mwangi@trade.gov

Web Resources

Business Monitor International
Ministry of Health
Kenya Medical Supplies Agency (KEMSA)
Kenya Medical Devices Report
Health Care Resources Guide
Global Trade Atlas
World Health Organization