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  • 1. Asia Pacific Healthcare Outlook Focus : South Korea Analysis of Best Opportunities P3B5-54 April 2010
  • 2. Disclaimer
    • Frost & Sullivan takes no responsibility for the incorrect information supplied to us by manufacturers or users.
    • Quantitative market information is based primarily on interviews and therefore, is subject to fluctuation.
    • Frost & Sullivan Research Services are limited publications containing valuable market information provided to a select group of customers in response to orders. Our customers acknowledge, when ordering, that Frost & Sullivan Research Services are for customers’ internal use and not for general publication or disclosure to third parties.
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    © 2010 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  • 3. Certification
    • We hereby certify that the views expressed in this research service accurately reflect our views based on primary and secondary research with industry participants, industry experts, end users, regulatory organizations, financial and investment community, and other related sources.
    • In addition to the above, our robust in-house forecast & benchmarking models along with the Frost & Sullivan Decision Support Databases have been instrumental in the completion and publishing of this research service.
    • We also certify that no part of our analyst compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this research service.
  • 4. TABLE OF CONTENT
    • Overview of Healthcare Market : Key Takeaways
      • Setting the Scene: Outlook for Healthcare Industry from 2010-12
      • Global vs. APAC: The New Frontier
    • In-depth Sectoral Analysis, APAC and South Korea
      • APAC Pharmaceuticals & Biotechnology Market
      • South Korea Pharmaceuticals & Biotechnology Market
      • Top Growth Opportunities : S. Korea Pharmaceuticals and Biotech Market
      • APAC Medical Equipment Market
      • South Korea Medical Equipment Market
      • Top Growth Opportunities : S Korea Medical Equipment Market
      • APAC Lifesciences and Health IT Market
      • South Korea Health IT Market
      • Top Growth Opportunities : South Korea Health IT Market
    • Summary : Best Opportunity Analysis, APAC and South Korea
      • Where to place your bets in APAC: 2010- 2012
      • Where to place your bets in S. Korea : 2010- 2012
  • 5. TABLE OF CONTENT
    • Decision Support Database
      • Total Health Expenditure
      • Private Health Expenditure
      • Government Health Expenditure
      • Percent Healthcare Expenditure in GDP
      • Population Aged Above 65
    • About Frost & Sullivan
  • 6. Overview of Healthcare Market : Key Takeaways
  • 7. Setting the Scene Outlook for Healthcare Industry from 2010-12 Global Healthcare Market : 2009
    • US and Europe were impacted in a major way by global crisis
    • Asia also slowed down but not as much as the West
    • Valuations were low and M&A was high, many smaller Biotech companies struggled
    • Major organizational restructuring occurred, along with portfolios being reassessed
    Global Healthcare Market : 2010-12
    • Recovery of the markets to a large extent with strong growth in Asia
    • Start of major patent expiries
    • M&A activity down in the West but could be important in Asia, restructuring will continue
    • Asia becoming increasingly important as a market and outsourcing hub
    • 5Ps to drive market: Preventive, Preemptive, Personalized, Predictive, Personal Responsibility
  • 8. Global vs. APAC: The New Frontier By 2012 APAC expected to be close to 27% of global market 23.9% 27.2% 23.2% 26.4% CAGR 12.2% CAGR 6.47%
    • By 2015 APAC could represent ~40% of global market!
    Rest of the World APAC Note: All figures are rounded; the base year is 2009. Source: Frost and Sullivan Global & APAC Healthcare Revenues US$ Bn, 2009-2012
  • 9. Asia is however transitioning Moving toward a Multi–Polar World Order Asia Pacific Market : 2009
    • Slowing down of GDP in mature markets – Japan and Australia took a big hit
    • Global consolidation left a difficult mess for integration on a local level – job losses and portfolio realignment
    • Price cutting and playing the margins game
    • The bubble burst for Medical Tourism
    • Asia started to set up infrastructure for offshoring and outsourcing for US/EU companies
    Asia Pacific Market : 2012
    • A shift in the center of the world economically and strategically to Asia
    • Asia to move from export led development to consumption led growth
    • APAC the fastest growing pharma market and API production hub
    • Increased government attention to primary and community based healthcare .
    • Increased use of mobile technology in healthcare service delivery
    • 2010 : Malaysia Innovation and Creativity year
  • 10. In-depth Sectoral Analysis, APAC and South Korea
  • 11. APAC Pharmaceuticals & Biotechnology Market Earlier diagnosis improves disease management and length of therapy Note: All figures are rounded; the base year is 2009. Source: Frost and Sullivan Market Drivers Market Restraints
    • Long term use of multiple and specialized drugs for the ageing population
    • Government support for generics and biosimilars
    • Enhanced diagnosis and management in oncology, cardiovascular, pain etc
    • Unresolved political and regulations issues
    • Quality concern of generics & counterfeits
    • Government tenders favour local manufacturers
    CAGR 6.6 % CAGR 12.9 % APAC Share 750 825 866 909 24.6 % 28.5% Pharma & Biotech Revenues, US$ Bn, 2009-2012
  • 12. South Korea Pharmaceuticals & Biotechnology Market Strong commitment to biotechnology Pharma & Biotech Revenues, US$ Bn, 2009-2012 Market Drivers Market Restraints
    • Intensified competition from MNC ethical products post 2007 FTA will restrain growth of domestic players
    • Lowered profits for branded and generic drugs owing to shift to Positive List System
    • Growing demand for lifestyle diseases drugs e.g. hypertension ,diabetes, oncology
    • Increased drug imports owing to changes in reimbursement and dispensing policy
    • Highly competitive generics market and government commitment to develop super generics
  • 13.
    • S Korea Cardiovascular Diseases market 2010 :~ US$ 2.27 bn; estimated size in 2012 : ~US$ 2.9 bn; CAGR ~ 13%
    • S Korea Diabetes market 2010 ~ US$ 495 mn; estimated size in 2012 ~ US$ 609mn; CAGR ~ 10.9%
    • Prevalence of diabetes : 2010 : ~3.5 mn. Potential for diagnosis and treatment as nearly 45% of cases are undiagnosed
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    Source: Frost & Sullivan. http://www.pfizer.com/ Bio-pharmaceuticals Cardiovascular and metabolic diseases Oncology
    • S Korea Oncology market in 2010 : ~ US$ 840 mn; CAGR ~ 17-20%
    • Growth from early diagnosis of cancers and targeted therapy in top 3 types of cancer : lung cancer, gastric cancer and liver cancer
    • Potential for generic oncology drugs as this currently comprise 20% share in a market dominated by MNCs
    Top Growth Opportunities : S. Korea Pharmaceuticals and Biotech Market
    • 2009 : biopharmaceuticals identified as a growth engine for the Korean economy.
    • Planned government support for generics and super generics : ~US$ 1 bn from 2007 -2017
    • Local domestic players have already initiated production of next generation protein therapeutics (bio – betters) : targeted at global markets
    • S Korea generics market 2010 : ~ US$ 4 bn; CAGR ~ 12.1%
  • 14. APAC Medical Equipment Market Transition to a mindset of monitoring 59.4 65.4 72.0 79.4 Note: All figures are rounded; the base year is 2009. Source: Frost and Sullivan Market Drivers
    • Safety, accuracy, efficiency, cost
    • Automation and integration with information systems
    • Emphasis on early detection and monitoring
    • Silver industry requirements
    Market Restraints
    • Regulatory and reimbursement hurdles
    • Inadequate distribution networks
    • Inadequate training on and compliance to new technology
    Medical Equipment Revenues, US$ Bn, 2009-2012
  • 15. South Korea Medical Equipment Market Focus on high end and innovative technology Medical Equipment Revenues, US$ Bn, 2009-2012 Market Drivers Market Restraints
    • Demand for advanced and innovative medical equipment
    • Ageing population
    • Increased prevalence of chronic and lifestyle diseases
    • High financing deficit of NHIC
    • Strong reliance on imports in relation to domestic manufacture
    • High currency fluctuations
    Note: All figures are rounded; the base year is 2009. Source: Frost and Sullivan
  • 16. Top Growth Opportunities : S Korea Medical Equipment Market Minimal Invasive & Cosmetic Surgery Clinical Diagnostics Medical Imaging
    • Growth in traditional products like Linear Accelerators, High end CT and MR and SPECT spur as consumers demand personalised treatment and services
    • Next Generation Broadband services will lead to creation of u-health products wherein consumers can be diagnosed in real time mode
    Source: Frost & Sullivan.
    • Cardiovascular, endoscopy, laparoscopy, ophthalmic and dental devices. This segment will be driven by increased prevalence of chronic and age related diseases .
    • Other remarkable specialties include plastic surgery, oriental medicine, dental care
    • Molecular diagnostics and laboratory automation products will prosper as Korean hospitals strive to provide the world's best and aim to achieve the highest cure rates for various lifestyle diseases like cancer (especially stomach- and liver) and complex surgeries like liver transplantations.
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  • 17. Note: All figures are rounded; the base year is 2009. Source: Frost and Sullivan *Healthcare IT includes: Software, Hardware, IT services and Lifesciences IT APAC Lifesciences and Health IT Market* Interoperability challenges hinder adoption Market Drivers Market Restraints
    • Operational efficiency
    • Strong and sustained demand for healthcare services
    • Consumer demand for quality and access to information
    • Interoperability
    • Integration
    • Lack of skilled resources
    CAGR 7% CAGR 11.3% APAC Share 50.6 54.6 58.4 62.5 14.5% 15.7% Lifesciences & Healthcare IT, US$ Bn, 2009-2012
  • 18. South Korea Health IT Market EMR/EHR fast becoming the norm Health IT Revenues, US$ Mn, 2009-2012 Market Drivers Market Restraints *Health IT includes: Software, Hardware, IT services, Networking
    • Government subsidies to provider s who use state – of – the –art technology
    • Regulations requiring use of EMR/EHR and telemedicine
    • Thrust on medical tourism
    • Insufficient regulation in the free-standing delivery network which includes diagnostic centers and group practices.
    • Security and Privacy issues stall buy in from national entities such as Korea Medical Association and Citizen’s group
    Note: All figures are rounded; the base year is 2009. Source: Frost and Sullivan
  • 19. Electronic Health Record Business Intelligence Solution Healthcare Interoperability Standards and Platform Top Growth Opportunities : S. Korea Health IT Market
          • Korea market 2010 (Business Intelligence) : ~US$ 48 mn; CAGR ~8.5%
          • Growing demand for patient centered healthcare services and systemized healthcare organization management through the implementation of advanced healthcare systems
            • Korea market 2010 ( Healthcare Interoperability Platform (HIP) and Master Patient Index, Health Information Exchange and related Standards and Adaptors) : ~US$ 28 mn; CAGR ~7.5%
            • Various standards for systematic, efficient record system, sharing, management of health information system have been appearing, as there is a growing demand for necessity to adopt health information system interoperability.
    Source: Frost & Sullivan.
          • Korea market 2010 (EHR) : ~US$ 63 mn; CAGR ~ 10%
          • The Centre for iEHR (CiEHR ) a research and development institute, established in December, 2005 in support of Korean Ministry of Health & Welfare to develop core technologies necessary to implement lifetime EHR
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  • 20. Summary : Best Opportunity Analysis APAC and South Korea
  • 21. Where to place your bets in APAC: 2010- 2012 Time Growth Molecular Diagnostics Silver Industry Equipment POCT Vaccines/ Biologics Endoscopy EMR/ EHR Wellness Products Oncology Value based Imaging Healthcare Services Source: Frost & Sullivan. INNOVATION TRIGGER SUPER GROWTH NORMALISATION LEADERSHIP India China S.Korea Singapore Malaysia Vietnam
  • 22. Where to place your bets in South Korea : 2010- 2012 Time Growth Wellness Products Next Gen Broadband Endoscopy EMR/ EHR Molecular Diagnostics Oncology Healthcare Services Source: Frost & Sullivan. Generics Silver Industry Cardiovascular Orthopedics POCT, Self Monitoring Devices INNOVATION TRIGGER SUPER GROWTH NORMALISATION LEADERSHIP
  • 23. Decision Support Database
    • Total Health Expenditure
    • Private Health Expenditure
    • Government Health Expenditure
    • Percent Healthcare Expenditure in GDP
    • Population Aged Above 65
  • 24. Decision Support Databases
  • 25. Decision Support Databases (Contd…)
  • 26. Decision Support Databases (Contd…) Source: Frost & Sullivan
  • 27. Decision Support Databases (Contd…)
  • 28. Decision Support Databases (Contd…)
  • 29. Decision Support Databases (Contd…) Source: Frost & Sullivan
  • 30. Decision Support Databases (Contd…)
  • 31. Decision Support Databases (Contd…)
  • 32. Decision Support Databases (Contd…) Source: Frost & Sullivan
  • 33. Decision Support Databases (Contd…)
  • 34. Decision Support Databases (Contd…)
  • 35. Decision Support Databases (Contd…) Source: Frost & Sullivan
  • 36. Decision Support Databases (Contd…)
  • 37. Decision Support Databases (Contd…)
  • 38. Decision Support Databases (Contd…) Source: Frost & Sullivan
  • 39. About Frost & Sullivan
  • 40. Who is Frost & Sullivan
    • The Growth Partnership Company
      • Founded in 1961, Frost & Sullivan has over 45 years of assisting clients with their decision-making and growth issues.
      • Over 1,700 Growth Consultants and Industry Analysts across 32 global locations
      • Over 10,000 clients worldwide - emerging companies, the global 1000 and the investment community
      • Developers of the Growth Excellence Matrix – industry leading growth positioning tool for corporate executives
      • Developers of TEAM Methodology , proprietary process to ensure that clients receive a 360 o perspective of technology, markets and growth opportunities
      • Three core services: Growth Partnership Services , Growth Consulting and Career Best Practices
  • 41. What Makes Us Unique
    • Exclusively Focused on Growth
      • Global thought leader exclusively focused on addressing client growth strategies and plans – Team actively engaged in researching and developing of growth models that enable clients to achieve aggressive growth objectives.
    • Industry Breadth
      • Cover the broad spectrum of industries and technologies to provide clients with the ability to look outside the box and discover new and innovative ideas.
    • Global Perspective
      • 32 global offices ensure that clients receive a global coverage/perspective based on regional expertise.
    • 360 o Perspective
      • Proprietary TEAM Methodology integrates all 6 critical research methodologies to significantly enhance the accuracy of decision making and lower the risk of implementing growth strategies.
    • Growth Monitoring
      • Continuously monitor changing technology, markets and economics and proactively address clients growth initiatives and position.
    • Trusted Partner
      • Working closely with client Growth Teams – helping them generate new growth initiatives and leverage all of Frost & Sullivan assets to accelerate their growth.
  • 42. TEAM Methodology
    • Frost & Sullivan’s proprietary TEAM methodology , ensures that clients have complete “360 Degree Perspective” from which to drive decision-making. T echnical, E conometric, A pplication, and M arket information ensures that clients have a comprehensive view of industries, markets and technology.
    T echnical Real-time intelligence on technology, including emerging technologies, new R&D breakthroughs, technology forecasting, impact analysis, groundbreaking research, and licensing opportunities. E conometric In-depth qualitative and quantitative research focused on timely and critical global, regional, and country specific trends, including the political, demographic, and socioeconomic landscapes. A pplication Insightful strategies, networking opportunities, and best practices that can be applied for enhanced market growth; interactions between the client, peers, and Frost & Sullivan representatives that result in added value and effectiveness. M arket Global and regional market analysis, including drivers and restraints, market trends, regulatory changes, competitive insights, growth forecasts, industry challenges, strategic recommendations, and end-user perspectives.
  • 43. Global Perspective
    • 1,700 staff across every major market worldwide
    • Over 10,000 clients worldwide from emerging to global 1000 companies