Economic growth directly linked to healthcare systems

Leaders in emerging market countries face challenges with strained economies, rising geopolitical tension and the need for sustained growth.

But political decisions oftentimes neglect fundamental influences on a country’s economy.

The health of a nation is linked to the strength of its economy. In turn, health care is the foundation on which all growth is built.

Countless studies confirm that when people are healthy, they work more consistently, participate more meaningfully in the economy and consume over a longer period of their lives.

When they are not, productivity collapses.

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The working-age population is the engine room of any economy. When this group is burdened by cancer, diabetes, chronic disease or unmanaged acute illness, we stand to lose productive individuals who contribute positively to an economy.

That is why GDP growth is fundamentally tied to the health of a society. Health unlocks productivity, innovation and resilience – all core drivers of GDP.

Previously, economic growth drivers like cellphone communication and aviation have transformed the way in which developing markets grow and trade.

However, technological and infrastructural progress is not enough, because sustained economic growth cannot be realised on the back of an unhealthy population.

This is where global decision-makers need to change their thinking. Health care spending should not be viewed as an unrecoverable cost to the national purse. It should be treated as an investment in future economic output.

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Yet, too often in public debate, medicines are portrayed as the primary reason health care budgets are under pressure.

That perception has contributed to reduced investment in health care innovation, like improved medicine technology. But the numbers show a different story.

Pharmaceuticals account for roughly 0.7% of GDP globally, while total health care spending averages around 9%. Innovative medical technology reduces long-term health care costs by enabling earlier diagnosis, effective treatment and the prevention of complications that are far more expensive to manage later.

Where health care spending truly becomes inefficient is in structural issues such as pricing models for generics. Generic medicines are vital for reducing costs and widening access but the degree of price reduction matters.

In mature markets like Germany, generics often enter at roughly half the price of the original medicine once exclusivity ends, whereas in South Africa the reduction is typically far more modest, around 20%.

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The savings that should be used to fund innovation and broaden access are never fully realised. Aligning these pricing structures with global norms would unlock enormous value for health care systems.

Then, there’s the question of access to innovative health care. Doctors and nurses form the backbone of every health system.

In emerging markets like South Africa, the talent and dedication are exceptional. But even the best clinicians cannot deliver optimal outcomes without the tools that modern medicine provides.

Innovation is not restricted to new medicines. It includes diagnostics, digital technologies, smarter patient pathways and approaches that allow us to intervene earlier and more effectively.

Globally, leaders now have an opportunity to rethink how health care is funded, structured and prioritised.

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Markets require a balanced model that protects access to services and medication, while creating space for new therapies to enter the system.

Wider adoption of this approach could accelerate innovation and improve health outcomes across the world.