Innovations across Asia's healthcare supply chain

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The healthcare environment in Asia is changing rapidly, driven by economic growth, increasing affluence, and higher educational levels. At today’s spending levels, Asia’s healthcare market will grow
significantly.

This report is published by UPS and written by the Economist Intelligence Unit (EIU).
The views expressed by the EIU do not necessarily reflect those of UPS.

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Innovations across Asia's healthcare supply chain

  1. 1. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAINWritten by
  2. 2. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAIN Table of contents Preface 2 Executive Summary 3 Introduction 6 Innovations in drug discovery and development 11 Case Study: Bayer HealthCare Pharmaceuticals 12 Innovations in access outside the hospital 17 Case study: First Care 20 Innovations in care delivery in hospitals and other healthcare institutions 22 Case study: Sendai-Finland Wellbeing Center 25 Conclusion 26Copyright © 2012 United Parcel Service of America, Inc.
  3. 3. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAINForewordThe healthcare environment in Asia is changing rapidly, driven byeconomic growth, increasing affluence, and higher educationallevels. At today’s spending levels, Asia’s healthcare market will growsignificantly. Asia’s per capita healthcare spend is markedly less than“Western economies” such as the US and Europe. Even Japan, theregion’s biggest spender, is at 35% of US levels, whilst Asia’s mostpopulous nations of China, India and Indonesia spend only US$308,US$132 and US$99 per capita on healthcare annually – 4%, 2% 1%respectively, of US-spend.1The Asian healthcare landscape is heterogeneous, with vastly differentlevels of development across countries; within countries, the urban-rural divide continues to widen. Whilst infectious diseases remainprevalent in many areas, the emergence of lifestyle-related chronicillnesses is creating a new challenge for Asian countries – to continuetheir efforts in reducing infectious diseases, and managing theacceleration of chronic diseases.These trends have posed huge challenges to governments trying todeliver a satisfactory level of care across the spectrum – from preventionto treatment to palliative care.Public – private sector collaborations are now leading the way inhealthcare innovation with a common goal of reaching new levelsof effectiveness and efficiency, and, they are also looking beyondthe healthcare industry in their bid to find innovative solutions.UPS has been collaborating with healthcare companies to providescalable, sustainable and affordable supply chain solutions that meetcritical industry needs.UPS has successfully supported healthcare companies throughour network of dedicated healthcare facilities all over the world.We leverage our strong global transportation network and UPSTemperature True® cold chain solutions so that healthcare companiesare able to get their products to patients on time, without having toworry about product going to waste due to a handling issue.At UPS, we tell ourselves everyday “It’s a patient, not a package.” Craig Foster Senior Vice President, Supply Chain & Healthcare Logistics UPS Asia Pacific thenewlogisticsasia.ups.com/healthcare OECD Health Data 2011 1
  4. 4. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAIN Preface This report is published by UPS and written by the Economist Intelligence Unit (EIU). The views expressed by the EIU do not necessarily reflect those of UPS. Our sincere thanks go to the following interviewees (listed alphabetically by organisation) for their time and insights: • Dr Kenneth Hartigan-Go, professor, Dr Stephen Zuellig Center for Asian Business Transformation, Asian Institute of Management • Sanjay Prabhakaran, general manager for China and Hong Kong, Baxter • Yuhang Zhao, head of global development in Asia, Bayer HealthCare Pharmaceuticals • Zarif Munir, partner and managing director, Boston Consulting Group Malaysia • Rick Evans, chairman, Columbia Asia • Dr Young Kyung Do, assistant professor for programme in health services and system research, Duke-NUS Graduate Medical School Singapore • Dr Fock Kwong-Ming, assistant chief executive officer, Eastern Health Alliance • Dr Meenakshi Gautham, founder-director, First Care • Dr Gilberto de Lima Lopes, Jr., senior consultant in medical oncology and assistant professor of oncology, Johns Hopkins Singapore International Medical Centre and Johns Hopkins University • Dr Jeremy William Fox, director, Centre for Health Policy and Management, National University of Singapore • Dr Alberto Romualdez, former secretary of health, Republic of the Philippines Department of Health • Wayne Spittle, senior vice president & commercial leader of Asia Pacific, Philips Healthcare • Dr Anand Tharmaratnam, chief executive officer and head of Asia, Quintiles • Dr. Juha Teperi, head of R&D Unit, Sendai-Finland Wellbeing Center • Hiroshi Yoshimura, deputy head of R&D Unit, Sendai-Finland Wellbeing Center March 2012Copyright © 2012 United Parcel Service of America, Inc. 2
  5. 5. EXECUTIVE SUMMARY
  6. 6. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAINAsia faces diverse and difficult healthcare challenges.Poorer economies in the region grapple with dire shortagesof drugs and doctors, and the inadequacies of healthcare systemsthat cannot reach patients in remote locations. Richer countriesface policy quandaries over resource allocation, and achievingthe right balance between public and private provision. Meanwhile, Asia’s healthcare environment is (EIU)2. The EIU expects this spending to reach changing dramatically, with rising incidence of US$546 by 2016. developed-world non-communicable diseases such as hypertension, cancer and diabetes, • Partnerships between large Western even as the region struggles to stamp out companies and Asian institutions and firms infectious diseases such as malaria, AIDS and are driving R&D innovation in the region. polio. This confluence of persistent basic The West’s “Big Pharma” has invested health problems and the onset of rich world heavily in innovation in China, India and diseases is creating unprecedented challenges elsewhere—tailoring clinical trials to local for Asian societies and health systems. populations and seeking government buy-in and collaboration with local private sector, Yet as much as there is risk, there is academic and medical institutions. Generic opportunity. Governments in Asia have been drug firms in Asia, particularly those from striving to improve healthcare provision, but India, are energising the region’s the task is far too onerous to tackle with public pharmaceutical industry and have lately resources alone. Private sector healthcare begun to invest in researching novel drugs. firms have been drawn to Asia, given the Despite their growing research capabilities, region’s tremendous growth potential. however, Asian firms are unlikely to challenge Big Pharma in the near future: This paper, published by UPS and written by they currently lack the resources and the Economist Intelligence Unit (EIU), focuses expertise to develop, launch and market on how healthcare firms at each point of the innovative products globally. supply chain in Asia are innovating, or should innovate, in order to meet the task of • Drug development, not discovery, is the healthcare provision, and benefit from the focus of research and development (R&D) sector’s rapid growth in Asia. Among the in Asia at the moment. Pharmaceutical report’s key findings are the following: innovation in Asia is accelerating, but R&D efforts are focused more on cost-efficient • Asia’s healthcare sector has been growing “D” than pure “R”. This has led to an rapidly, creating numerous growth increase in the number of clinical trials— opportunities for firms right across the a vital phase in drug development—being healthcare supply chain. Several broad conducted in low-cost Asia with its easy trends, including rising household incomes, access to a high volume of patients, as increased government expenditure on pharmaceutical companies not only trim healthcare, higher life expectancies, consumer their R&D expenses but also localise their health awareness, and the growing incidence research into diseases, such as cancer of chronic developed-world diseases and diabetes, which are becoming more associated with changing lifestyles have all prevalent in Asia. boosted demand for healthcare products and services in the region. The annual average per • The challenges for R&D in Asia include capita healthcare spending in Asia and uncertain returns on investment and weak Australasia has more than doubled between patent protection. Given that the region’s 2001 and 2011, from US$150 to US$362, R&D facilities are relatively new and the according to the Economist Intelligence Unit lead time from drug discovery to global 2 This is the sum of public and private health expenditure on a per capita basis Copyright © 2012 United Parcel Service of America, Inc. Executive Summary 4
  7. 7. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAIN marketing relatively long, novel drug institutions. The innovative application discovery from these centres may not of technology and business models is materialise soon. Investors will have to enabling the emergence of medical-delivery contend with this uncertainty. This is outfits that are smaller, nimbler and cheaper, compounded by governments’ prioritising and that pose a threat to existing hospitals broad-based healthcare at low cost, and with high overhead costs. Third-party payers, worries over intellectual property protection such as insurance companies or employers, and enforcement in key emerging markets. will likely drive the shift to lower-cost Although Western pharmaceutical firms health-services provision, enabling smaller have invested heavily in manufacturing facilities to survive and succeed. These and outsourcing of clinical trials in Asia, third-party payers have a huge incentive their core R&D activities still come under to send premium-holders or employees to the purview of corporate headquarters. smaller, faster, cheaper medical outfits. • Innovations in technology and business • Adapting to innovations requires both models are enabling a deeper, wider basic and fundamental changes in reach for healthcare delivery in Asia, institutions, and an integrated approach. with the use of fewer resources. On one level, healthcare providers can Healthcare professionals in brick-and-mortar continually add on new layers of facilities located in urban areas are the technologies and systems, such as digitised typical providers of healthcare services in health records or new surgery equipment, Asia. But the innovative use of technology with few changes to their operations. like mobile communications devices, or the However, the rising incidence of non- creative adaptation of hospital business communicable diseases is going to require models, equipment or operation procedures, a fundamental remodelling of the whole can help to deliver healthcare to the masses healthcare system. Traditional institutions cheaply and efficiently. However, these and professionals have to be part of a innovations face resistance from doctors and multiple-level, integrated solution that institutions with entrenched interests who extends well beyond the healthcare are unable to move away from traditional system, to enable care from “prevention models of health services delivery. to palliation”. This approach requires cooperation between multiple stakeholders, • Low-cost healthcare innovations are from schools and community care centres helping to create a new class of to family clinics and public communication competitors for traditional healthcare channels.Copyright © 2012 United Parcel Service of America, Inc. Executive Summary 5
  8. 8. INTRODUCTION
  9. 9. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAINAsia faces many different healthcare challenges, in keeping withthe diverse social, economic, and political environments foundthroughout the region. Emerging Asian economies, which oftengrapple with large populations, under-resourced healthcare systemsand massive geographic spread, find it difficult to get basic medicalservices to the far reaches of the country. In India, Indonesia and thePhilippines, for instance, healthcare is reasonably delivered in themajor cities, but underprovided in rural areas. In China, Malaysia andThailand, which have all made significant progress in recent years,healthcare provision is much more equitable but still far from ideal. Only in Asia’s developed markets—Hong Kong, Yet as much as there is risk, there is Japan, South Korea, Taiwan and Singapore— opportunity. Several broad trends have is healthcare delivery widespread, leveraging been driving the booming growth in Asia’s partly on the efficiencies of digitised medical healthcare market. The first is demographic systems. Nevertheless, these countries still change—including higher life expectancies contend with policy dilemmas over resource (see Figure 1), population growth, and the allocation, the balance between public and overall ageing of some populations—which private provision, and expensive universal has pushed up demand for a variety of healthcare coverage that is at risk of being healthcare products and services, including outstripped by public demand. treatments for the elderly. Figure 1: Life expectancy, selected Asian countries (years) 90 85 80 75 70 65 60 3 4 3 4 00 200 01 201 01 02 05 06 07 08 09 10 11 12 15 16 2 2 20 20 20 20 20 20 20 20 20 20 20 20 CHINA INDIA INDONESIA SINGAPORE TAIWAN Source: US Bureau of Census; Economist Intelligence Unit Copyright © 2012 United Parcel Service of America, Inc. Introduction 7
  10. 10. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAIN Rising incomes in Asia have also enabled non-communicable diseases such people to afford better treatments. Meanwhile, as hypertension, cancer and diabetes. higher literacy rates and educational standards China and India now have the largest in Asia have contributed to heightened diabetic populations in the world, health awareness, prompting more comprising some 51m and 43m people, widespread consumption of healthcare respectively3. Experts expect diabetes products and services. prevalence in Asia to rise rapidly between now and 2030 (see Figure 2). Meanwhile, As Asians’ lifestyle patterns have begun infectious diseases such as malaria, to change, there has been an increase AIDS and polio remain a real threat. in the incidence of developed-world, Figure 2: Diabetes prevalence, selected Asian countries (%) 0 5 10 15 SRI LANKA MALAYSIA S KOREA THAILAND INDIA AUSTRALIA JAPAN PHILIPPINES TAIWAN INDONESIA CHINA VIETNAM 2010 2030 Source: Shaw et al, “Global estimates of the prevalence of diabetes for 2010 and 2030”, Diabetes Research and Clinical Practice, Vol 87, Issue 1, Jan 2010, pages 4-14 Shaw et al, “Global estimates of the prevalence of diabetes for 2010 and 2030”, Diabetes Research and Clinical Practice, Vol 87, Issue 1, Jan 2010, pages 4-14 3Copyright © 2012 United Parcel Service of America, Inc. Introduction 8
  11. 11. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAIN In other words, Asia is getting introduced In response, total healthcare expenditure to these first-world diseases at a rapid has been rising rapidly (see Figure 3). pace, even while it is still dealing with The annual average per capita healthcare basic healthcare and infectious diseases. spending in Asia and Australasia has more This confluence of persistent basic health than doubled between 2001 and 2011, problems and the onset of rich-world from US$150 to US$362, according to diseases is creating unprecedented the Economist Intelligence Unit (EIU). challenges for Asian governments, societies The EIU expects this spending to reach and health systems. But it is creating new US$546 by 2016. markets for firms specialising in the treatment of these illnesses. Figure 3: Healthcare spending (per head, US$) 3000 2500 2000 1500 1000 500 0 01 11 02 03 04 05 06 07 08 09 10 12 13 14 15 16 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 CHINA INDIA INDONESIA SINGAPORE TAIWAN Note: Total public and private expenditure on healthcare, per capita. Source: Epsicom; WHO; Taiwan’s Department of Health, EIUCopyright © 2012 United Parcel Service of America, Inc. Introduction 9
  12. 12. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAIN Meanwhile, total consumer expenditure on Thus Asia’s healthcare sector is changing healthcare in Asia and Australasia has risen fundamentally, as the region’s health profile to US$550.3bn in 2011 from US$214.8bn evolves while public- and private-sector in 20014. The EIU expects this figure to players—local and foreign—position reach almost US$1trn by 2016. themselves to address market needs. To operate successfully in this rapidly This growth in expenditure has benefited changing environment, healthcare companies many firms in the healthcare space. and professionals at every link in the medical Consider the pharmaceutical sector. supply chain—from drug discovery and According to the EIU, the total combined development, to use of medical equipment revenue of pharmaceutical companies and technology, to provision of medicine listed in Asia almost tripled between 2004 and therapies, to hospitals and clinical and 2009, from US$27.4bn to more than services—have had to adapt and innovate. US$73bn5. Foreign firms have also been rushing in. Between 2004 and 2011, fDi Asia’s healthcare innovations also involve Markets, a data provider, recorded 653 mind-set shifts. Policymakers and healthcare cross-border investment projects in Asia administrators need to adopt a holistic from 321 companies in the pharmaceutical approach to the region’s challenges, working and biotechnology space, worth a total with stakeholders from sectors such as housing of US$28.6bn. and urban planning to education, to tackle healthcare issues in an integrated way. 4 This includes expenditure by households on medical products and healthcare 5 “Asia Competition Barometer: Pharmaceuticals”, The Economist Intelligence Unit, Mar 16th 2012Copyright © 2012 United Parcel Service of America, Inc. Introduction 10
  13. 13. INNOVATIONS IN DRUG DISCOVERYAND DEVELOPMENT
  14. 14. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAINTraditionally, Western pharmaceutical companies have viewedAsia as either a destination market or a manufacturing locationfor drugs and devices. They have taken existing products—usuallyvaccines, generic drugs or patent-protected medicines—froma global portfolio developed in their US or European bases,and customised them, sometimes at manufacturing centresset up in Asia, to fit price points for sale in the region. As the global economy’s growth momentum given that many of the Asian facilities are shifts towards Asia, that approach is beginning relatively new and the lead time from drug to change a little, partly because Western discovery to chemist’s shelf is relatively pharmaceutical companies are not getting long (anywhere between 10 and 17 years). sufficient returns at home on their huge investments in R&D. They need to drive Dr Anand Tharmaratnam, chief executive down expenses, and one way of doing so officer and head of Asia for Quintiles, is to outsource clinical trials—an essential a US-based biopharmaceutical services stage in drug development—to the low-cost, company, says that patience is required. high-demand environment of Asia. “There needs to be an understanding that the industry is young in Asia, and the nature This trend has developed progressively of what we do has a long gestation period,” over the past decade, but has gathered pace he says. “It is too early to say that all this recently, as incomes in Asia have grown and innovation has yet to come to market and the region has become more attractive as [therefore] is not succeeding. We’re just an end market for these drugs. Regulatory not there yet.” reforms have also helped. Meanwhile, Asian governments are offering greater incentives, Thus although they have invested billions of such as grants and tax breaks, to attract dollars in manufacturing and outsourcing of Western drugs and devices companies to clinical trials in Asia, Western pharmaceutical their countries. For instance, Singapore has heavyweights still face some R&D challenges invested a great deal of time and money to in the region. attract biomedical companies to set up high-end R&D operations in the city. For a start, a fair bit of uncertainty hangs over the returns that would come out of At this relatively early stage, initiatives in R&D centres in Asia—far more than the Asia tend to be weighted heavily towards uncertainty over R&D returns at home, the “D” rather than the “R” in research which are under pressure from high costs and development, says Sanjay Prabhakaran, and the imminent expiry of a wide range general manager for China and Hong Kong of patents. Commercialisation of a for Baxter, a diversified healthcare firm. breakthrough drug is a complex process He believes that for the moment, the and presupposes a market for that discovery. development, rather than the discovery, A handful of high-priced innovations to satisfy of drugs and related therapies has a better a few patients would not justify biomedical chance of success in Asia: hence the rapid companies’ R&D investment in Asia. A greater growth of clinical trials. In 2009 Asia R&D focus on maladies common in Asia contributed 10% of total patients recruited would provide a larger market for new drugs globally for such trials, double the number and therapies. in 20036. Big pharmaceutical firms also worry about Indeed, R&D centres in Asia have some way poor intellectual property (IP) protection. to go before they replicate the kind of novel China and India have made noteworthy strides drug discoveries made in the West, especially in IP regulation but concerns linger about 6 2011 CMR International Asia-Pacific R&D Pharmaceutical Factbook, CMR International, Thomson Reuters Copyright © 2012 United Parcel Service of America, Inc. Innovations in drug discovery and development 12
  15. 15. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAIN enforcement. Quintiles’ Dr Tharmaratnam Since 2009, the firm has had a strategic says the entire industry needs to work with partnership with Tsinghua University in regulatory authorities to achieve this Beijing through the Bayer-Tsinghua University “regulatory innovation”, but he stresses (Institute of Biomedicine) Joint Research that it is a challenge that must be met. Centre for Innovative Drug Discovery. Scientists from the institute collaborate As a clinical research organisation, with Bayer on the company’s therapeutic Quintiles participates in the clinical trials research in oncology, cardiology, haematology for which Western pharmaceutical companies and gynaecology, as well as eye disease. are turning increasingly to Asia. Besides being Similarly, Pfizer, an American pharmaceutical able to enrol enough patients in the region firm, signed a pact with Samsung Medical at a fraction of the usual cost at home, Centre in South Korea to analyse liver cancer they can also localise research for certain among Koreans to generate gene-expression diseases with a higher incidence in Asia, profiles that may help to direct therapeutics such as diabetes and cancers of the liver for the region. and stomach. For instance, AstraZeneca, a British pharmaceutical firm, opened its Importantly, Asian companies are also Innovation Centre China in Shanghai in 2007 developing significant R&D capabilities to collect data on cancer in Chinese patients. themselves, which make them potential For its part, Bayer HealthCare Pharmaceuticals research partners. For instance, Piramal Life of Germany collaborates on cancer R&D Sciences, an independent research-driven activities with hospitals and research pharmaceutical company in India, has an institutions in Singapore. Such customisation agreement with Eli Lilly to develop and helps to make the drugs and therapies that commercialise a select group of the US arise from the research more relevant for company’s pre-clinical drug candidates across Asian patients, and cuts down the lead time multiple therapeutic areas. Piramal Life to bring them to local markets. Sciences is also contracted to discover and develop new drugs for two new oncology Meanwhile government plays a pivotal role targets provided by Merck of the US. In in drug discovery and development in Asia. December 2011, Hutchison MediPharma, Besides setting healthcare policy, legislation an R&D company that is majority-owned and pricing, it also fosters private companies’ by the China-based Chi-Med healthcare partnerships with state agencies, as well as group, made a global collaboration deal with medical universities and institutions. For AstraZeneca to develop and commercialise Western biomedical companies in Asia, novel cancer therapy. In addition, Asian such collaboration with local stakeholders generics firms are beginning to invest in R&D; not only cuts R&D costs but also taps local according to CMR International, a research expertise that can be applied across the company, Indian generic companies led their region. “Synergistic industry partnerships peers worldwide in generating the largest are evolving to meet the challenges of new drug pipeline between 2006 and 2010. healthcare today,” notes Yuhang Zhao, Despite their swift progress in R&D, Asian head of global development in Asia with companies are unlikely to pose a major Bayer HealthCare, which has a global R&D threat to their Western counterparts soon. centre in Beijing (see case study). Although Asia’s pharmaceutical industry isCopyright © 2012 United Parcel Service of America, Inc. Innovations in drug discovery and development 13
  16. 16. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAIN booming, local companies tend to focus on companies could find this process intimidating; local markets and generics; they do not yet it will be challenging for newer kids on the have the infrastructure, resources or expertise block from places such as China and India to to follow the long, expensive road from do it alone—hence their willingness to forge discovery to clinical trials to approval by alliances with Western firms. In time, though, European or US authorities to global marketing blockbuster drugs may well come out of of a drug. Even the better-equipped, R&D in Asia, and the patience urged by better-experienced Japanese pharmaceutical Dr Tharmaratnam will be rewarded.Copyright © 2012 United Parcel Service of America, Inc. Innovations in drug discovery and development 14
  17. 17. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAINCase Study: Bayer HealthCare Pharmaceuticals Research and deliver “Asia, in particular China and India, including Korea, Singapore and Hong is not just a market and manufacturing Kong, with Taiwan likely to join soon. powerhouse for the pharma industry, Separately, in December 2010, Bayer but could make a key contribution to earmarked S$14.5m (US$11.4m) to drug discoveries as well in the future.” enhance R&D activities for cancer with So says Yuhang Zhao, head of global hospital and research institutions in development in Asia with Bayer Singapore. “The oncology collaborations HealthCare Pharmaceuticals. in Singapore will improve our understanding of molecular mechanisms of cancers The two Asian giants are certainly a focus with a high prevalence in Asia, such as for the German company. Since February hepatocellular carcinoma or liver cancer,” 2009, China has been the third location, says Richard Nieman, head of medical besides Germany and the US, for a Bayer affairs in Asia with Bayer HealthCare. global research and development (R&D) “Comparing Asian and Caucasian centre. The Beijing-based facility includes populations will also help us to define a Global Development Asia Hub, the differences in pathway activation by objective of which is to build a world- our development candidates.” class organisation that will lead drug development not only for China but also Bayer’s pharmaceutical development for other Asian countries. “The aim is to pipeline for 2012 and beyond is well systematically include Asian patients stocked, with 44 innovative projects earlier in global drug development, currently in phases I to III of clinical breaking the tradition of the ‘US and testing. In Asia, Bayer has recently EU first’,” says Mr Zhao. gained approval in Japan and Malaysia for its once-daily oral anticoagulant Meanwhile, in 2011 Bayer formed a joint Xarelto for the prevention of stroke venture called Bayer Zydus Pharma with and systemic embolism in patients Zydus Cadila, an Indian pharmaceutical with certain conditions; in Malaysia, firm, for the sale and marketing of both Xarelto was additionally approved for companies’ products, including future the treatment of deep vein thrombosis. patents in the pipeline, in India. Further approvals are planned in other Asian countries, depending on feedback Bayer also sees excellent research and from their respective health authorities. partnership possibilities in Singapore. In China, a new Phase III clinical trial In January 2011 Bayer HealthCare, for VEGF Trap-Eye started in 2011. along with Regeneron Pharmaceuticals, launched a new Phase III clinical trial Bayer has ambitious innovation and in collaboration with the Singapore Eye expansion plans in Asia-Pacific for the Research Institute to investigate the rest of the decade. It plans to invest efficacy and safety of VEGF Trap-Eye, further in R&D, taking into account the an ophthalmic solution to treat retinal particular needs of the region. Bayer disorders. The trial, called MYRROR, also wants to improve access in Asia to originated in Japan and has since been its new medicines by integrating Asian extended to other Asian countries, patients into the early stages of global Copyright © 2012 United Parcel Service of America, Inc. Innovations in drug discovery and development 15
  18. 18. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAIN development programmes, and plans to companies will continue to be highly submit new medicines for registration important in Bayer’s R&D strategy in Asia. concurrently in Asia, Europe and the US. The goal, he says, is “to participate in the region’s transition to an innovation hub According to Mr Zhao, partnerships of the globalised world.” with scientific academia and start-upCopyright © 2012 United Parcel Service of America, Inc. 16
  19. 19. INNOVATIONS IN ACCESS OUTSIDETHE HOSPITAL
  20. 20. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAINLike drug discovery and development, which is inhibited in partby high R&D costs, provision of healthcare services in Asia ishampered in part by the expense of building brick-and-mortarhospitals. Typically these facilities are constructed in urban areas and,particularly when privately owned and run, cater to well-off patients. “We have a rich minority that has access to to get to the nearest good hospital. By tending the best healthcare in the world, and a poor to the patient immediately, and sending majority that is living in the dark ages as far pathology slides to a central system for as health is concerned,” says Dr Alberto analysis, the technology-based model allows Romualdez, a former secretary for health monitoring, a care regimen, and outcome in the Philippines and a former director for adjustments to be made in a few hours. the Western Pacific with the World Health By facilitating the movement of data rather Organisation. Healthcare’s incomplete reach than people or buildings, such technological especially plagues geographically widespread innovations enable healthcare institutions to countries such as China, India, Indonesia and handle a larger number of patients, without the Philippines. investment in more hospitals or physicians. Simply building more full-scale hospitals is Ophthalmology advancements also highlight not the answer. “Such solutions miss the point how technological innovations are altogether. Infrastructure is not getting to that complementing the traditional hospital model. last mile,” notes Dr Jeremy Fox, who heads New lasers for treating eye pathologies can the National University of Singapore’s Centre now cauterise and sterilise at the same time. for Health Policy and Management. Wayne This allows ophthalmology units to bring a Spittle, chief executive officer in Asia-Pacific 65-year-old patient into a small operating for Philips Healthcare, a healthcare-equipment room, remove his cataracts and put in artificial maker, agrees. “People are demanding more lenses, and send him home—all in the span of and better healthcare,” he says. “You cannot three hours or less. This allows a reach that build enough hospitals, you cannot train was previously unimaginable. Teams at the enough doctors and nurses to meet the Himalayan Cataract Project, an NGO created demand. No matter what you do, you cannot in 1994 to build an eye-care infrastructure in catch up.” the Himalayan region, travel on foot to remote parts of Nepal, set up mobile eye camps in This is where technological innovations can dusty schoolrooms, and perform cataract help. If costs and geography limit the building surgeries at international standards for as little of enough serviceable hospitals in remote as US$20. The eICU and the ophthalmology areas, then technology can be harnessed initiatives are examples of innovations that for more effective use of community health can benefit patients who live in remote areas centres and basic laboratories in those in almost every Asian country. locations. The hub-and-spoke model of healthcare delivery, assisted by remote Many of these innovations have not been technology, gets basic equipment to outlying adopted more comprehensively partly because facilities, and then sends information back to of the reluctance of doctors and institutions central analysis units. with entrenched interests in the traditional models of health-services delivery. “The Consider Philips Healthcare’s eICU programme. technologies that we’ve got at our disposal According to Mr Spittle, eICU enables a more today will actually allow us to cut costs,” responsive and efficient treatment of people in observes Rick Evans, chairman of Columbia remote areas who have suffered a heart attack Asia, a Kuala Lumpur-based hospital chain. or stroke and may not have the wherewithal “However, there’s a lot of built-in resistance Copyright © 2012 United Parcel Service of America, Inc. Innovations in access outside the hospital 18
  21. 21. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAIN to this idea. Doctors’ organisations don’t higher overhead costs; they tap a market like to hear about people cutting costs, segment that previously had to use either and traditional hospitals cannot compete over-utilised government hospitals or with the new, low-cost outfits that surface expensive private ones. as a result of the new technologies.” Third-party payers, such as insurance By resisting new innovations, traditional companies or employers, will likely drive the hospitals leave the door open for smaller, shift to lower-cost health-services provision, nimbler outfits to nip in, operate more frugally enabling smaller facilities to survive and and win market share. Columbia Asia, which succeed. These third-party payers have a builds and operates low-cost hospitals in huge incentive to send premium-holders or India, Indonesia, Malaysia and Vietnam, is employees to smaller, faster, cheaper medical hoping to do just that. In Malaysia, its no-frills outfits. Columbia Asia’s hospitals in Malaysia, medical facilities provide general care for a for example, currently earn about 70% of variety of simple and common ailments more their revenues from such third-party payers. economically than higher-end providers. “Third-party payment methodology is These hospitals can go further into rural changing very fast all over Asia, and it will Malaysia than larger hospitals, which have change healthcare forever,” Mr Evans says.Copyright © 2012 United Parcel Service of America, Inc. Innovations in access outside the hospital 19
  22. 22. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAINCase Study: First Care Bringing protocols, not professionals, to India’s villages Healthcare in India suffers from a a move towards mobile technology. shortage not only of hospitals, but also Acting on the requests of their pilot pool of doctors. This shortage is particularly of rural practitioners, First Care built a acute in the country’s villages, home to step-by-step mobile phone guidance almost 70% of the population. A rural system called mguide, which rural Indian often may live up to 20km away healthcare providers can use when from the nearest hospital, with limited managing patients. mguide informs transportation available—difficult the practitioner what questions to ask, circumstances in a medical emergency. what signs and symptoms to look for, what examination to perform, how to Filling the void are “halfway doctors”, distinguish a serious condition from a locally based practitioners with no mild or moderate one, and how to rule formal qualifications in medicine, out various probable aetiologies related who nonetheless provide many villages to the condition, thereby narrowing with basic healthcare, where previously possibilities until an accurate diagnosis they had none. Some halfway doctors and prescription can be made. If needed, have a background in laboratory the practitioner can download more technology or pharmacy; others have comprehensive videos and visual aids no certification at all, but have assisted on the mobile device. in a doctor’s clinic for a few years. Field tests show that the programme Further boosting their efficacy is First has increased both protocol compliance Care, an initiative that uses information and standardisation of treatment. technology to increase the halfway For example, untrained rural practitioners doctors’ knowledge and skills, create who previously were unaware that patient health record systems, and paracetamol dosages for children should develop simple diagnostic services. be adjusted to body weight, can now Set up in 2007, First Care began draw upon World Health Organisation- operations by literally walking the developed standardised protocols for ground, locating rural halfway doctors, managing diarrhoea, fevers, respiratory and convincing them to join a pilot conditions, and children and infant scheme it developed with the Indian illnesses, by following the steps of Institute of Technology in Chennai. mguide, in a language and via a medium Regularly shunned by the formal medical with which they are comfortable. establishment, the halfway doctors were happy to join this scheme—a distance- Many doctors and policy makers support learning programme that was sent in the goals of First Care, according to modules over the Internet—largely Dr Meenakshi Gautham, its founder- because of First Care’s readiness to director. But First Care may face opposition engage with them on their terms and in some states in India where local in their own language. governments are less welcoming of informal rural practitioners. By 2008, the programme was showing initial signs of success but was hindered Before First Care can grow further, by narrow Internet bandwidth, prompting therefore, the legal landscape needs Copyright © 2012 United Parcel Service of America, Inc. Innovations in access outside the hospital 20
  23. 23. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAIN to change. Dr Gautham and her associates practices. In order to be comprehensive have filed a public interest litigation case and sustainable, therefore, First Care’s in the Delhi High Court and have asked innovation must also simultaneously the government and the Medical Council address India’s training and legal of India to initiate shorter training environments. programmes for certifying a future cadre of rural mid-level healthcare providers. First Care is an example of an innovation At the same time, she is lobbying the that could be implemented in other government to create a training Asian countries where local healthcare programme for rural mid-level healthcare practitioners are needed to fill service providers that will allow them to enhance gaps in rural areas. their knowledge while keeping up theirCopyright © 2012 United Parcel Service of America, Inc. Innovations in access outside the hospital 21
  24. 24. INNOVATIONS IN CARE DELIVERY IN HOSPITALSAND OTHER HEALTHCARE INSTITUTIONS
  25. 25. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAINThe incidence in Asia of so-called developed-world diseases—including cancer, diabetes and heart ailments—has shownan alarming increase, as people have begun to dramaticallyalter their traditional eating habits and lifestyles.But Asia is not well equipped to handle this emerging epidemicof non-communicable diseases (NCDs). Burdened in most partsby poverty and inequitable access to healthcare, the region is stillcoping with continuing high rates of infectious diseases. Exacerbatingthe situation is the inadequacy of the traditional acute model ofhealthcare, in which a patient seeks out a doctor, treatment isdispensed, and the affair concluded until the next bout of illness. “The problem is that many people don’t know Hospital in Singapore and serves as a senior they have an NCD,” says Dr Do Young Kyung, consultant there, has put in place a Disease assistant professor for programme in health Management Unit that acts as a hub to services and system research at the Duke-NUS monitor patients in between their medical Graduate Medical School in Singapore. “Even visits. Nurse tele-care operators call patients if they know, they don’t feel they need care. at home to guide them on self-maintenance Or if they feel they need [care], it is very of their chronic health problems. The unit’s expensive. If they can get the care, many of first diabetes-control programme has had them don’t follow through with it because it positive results, and encouraged the rollout needs self-management—they need to watch of other schemes for chronic obstructive what they eat, exercise regularly and change pulmonary disease, ischemic heart disease, their lifestyles. The problem is not something stroke and hip-fracture patients. you can address at one point.” Integrated care is gaining in popularity, Indeed, patient self-management is and a number of advanced Asian countries perhaps the first and most critical step have been exchanging generic frameworks in a holistic approach towards NCD care. and best practices, localising them where Early intervention, awareness campaigns necessary. For example, in delivering and technologies are crucial innovations integrated healthcare to diabetes patients, to aid it. For example, the success of tobacco tele-care operators are helped by scripts that control advocacy, manifested in taxation run through key points about eating and and bans, has had an impact on the incidence exercise, in a consistent and comprehensive of cancer. There is strong potential for similar manner. This involved creative reapplication awareness or prevention programmes to of other business models, including borrowing tackle other chronic diseases. More countries information technology systems from computer in Asia will see such patient - or provider-led firms and adapting customer relationship campaigns in the coming years. They will also management processes from the banking see innovative financing schemes, by which sector into a patient relationship management some of the revenue from taxation is used on system. The scripts used by the tele-care health promotion or insurance at the primary operators have been contextualised to the healthcare level. Technology can also lend extent that they anticipate and offer tailored a hand through, for example, smartphone dietary advice for Muslim patients during the applications that help diabetes patients to fasting month. better manage their blood-sugar levels. To keep up, healthcare institutions must One difficulty with integrated healthcare innovate at all levels. Dr Fock Kwong-Ming, is that it means different things to different who is on the faculty of Changi General people. For some, it suffices to integrate Copyright © 2012 United Parcel Service of America, Inc. Innovations in care delivery in hospitals and other healthcare institutions 23
  26. 26. INNOVATIONS ACROSS ASIA’S HEALTHCARE SUPPLY CHAIN in- and out-patient care. For others like Integration can also have a societal Dr Fock, it should be end-to-end, or what he dimension. For instance, in response to terms “prevention to palliation”, starting from the different levels of care needed for a before a disease takes root to the point where rapidly ageing population, several Asian there is no recourse other than to ensure a countries have built dedicated compounds certain quality in a patient’s remaining life. for the elderly, where they can live together This approach requires cooperation between with relevant healthcare personnel and multiple stakeholders, from schools and facilities at close call. Two examples are community care centres to family clinics the Chang Gung Health and Culture Village and public communication channels. in Taiwan and the Sendai-Finland Wellbeing Center in Japan (see case study). Integrated healthcare also depends on smooth workings between different parts But opinions of such compounds are mixed. of the healthcare supply chain outside the Some cheer the creation of dedicated immediate physician-patient interaction. healthcare and lifestyle facilities for the Take the new job of tele-carer. To optimise elderly, while others express discomfort at their contribution, a healthcare institution any initiative that may homogenise the needs needs not only to develop this new skill set, of a varied elderly population. There is also but also to motivate the tele-carer whose often cultural resistance towards placing contact with patients is mostly remote. elderly parents and relatives in a “home”, Human-resource management innovations, no matter how well equipped it is. such as town hall meetings, will help tele-carers to see the results of their work on their patients.Copyright © 2012 United Parcel Service of America, Inc. Innovations in care delivery in hospitals and other healthcare institutions 24

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