The past year must rank as one of the worst for investors in health care. It is a sector fraught with regulatory uncertainty - most notably over proposed price controls - and issues like affordability, quality care, red tape, the brain drain and skills shortages.

Already Netcare has lost its place in the top 100 of this year's Top Companies ranking, with Medi-Clinic dropping from last year's 107th to 132nd spot. Aspen, whose net profit rose 5% to R854,8m during its latest financial year, is unchanged at 106th.

As the pricing regulatory process unfolds, it's become clear that a long legal tussle looms.

But instead of sulking because of the controversial price controls, Netcare CEO Richard Friedland is looking for other income streams. In SA Netcare is partnering Simon Susman's Woolworths to sell drugs at the retailer's stores. Unlike traditional dispensaries, these new pharmacies are not required to discount their fees.

Friedland has also told the investment community that the "considerable success we are achieving" in Britain and SA has earned further international contracts in Egypt and Lesotho.

In the UK, Netcare has several public health contracts from the National Health Service (NHS). For instance, the firm is in a joint venture to provide 440 000 radiological procedures in England alone over a five-year period. JP Morgan analyst Alex Comer expects Netcare to churn out hundreds of millions of rand in the next few years from Britain. But he cites an expected decline in NHS funding as a damper, and warns of a surge in salaries in SA: "The rising employee wage isn't being offset by tariff increases."

Not to be left behind, Medi-Clinic has also staked its claim in Europe. Last year, the group bought Hirslanden in Switzerland for R17bn and Dubai-based Emirates Healthcare for almost R400m.

Analysts at Citi had pegged Hirslanden's revenues this year at R2,47bn - behind the actual R3bn. The bank expects the number to breach R7bn by 2010, and is of the view that Switzerland "offers an enormous advantage" over SA, where Medi-Clinic operates 48 hospitals with 6 900 beds. In the affluent Swiss market, Hirslanden now has 13 hospitals.

Pharmaceutical group Aspen, which competes with Enaleni and Tiger Brands-owned Adcock Ingram, is also growing offshore. It now owns Strides, operating in Mexico and Brazil.

As with hospital groups and the entire healthcare industry, shares in Aspen are under pressure. Having started the year at R41/share, Aspen has now fallen to R32. But, as Citi asserts, this play is undervalued. As CEO Stephen Saad continues hunting for opportunities, it's safe to assume Aspen will soon pick up - but with a p:e ratio of 15, it's more expensive than Netcare and Enaleni (below 12).

Now led by outspoken CEO Jerome Smith, Enaleni is working hard to regain market confidence after the authorities forced it to shut its manufacturing plant last year due to safety concerns.

According to Smith, the generics maker is spending R125m to upgrade the pharmaceutical facility to comply with international standards. Further, the group is investing R50m on new sophisticated machinery, to replace what Smith regarded as "completely inappropriate". Adcock Ingram too is vying for the ARV tender. The soon-to-be listed drugs maker was in May fined R53,5m for collusive behaviour.