That’s why one of the biggest growth markets we are beginning to witness now is emerging as Silicon Valley and the hi-tech industry begins to get involved in the world of health care in a whole variety of different ways.First and foremost, it’s happening in a very big way with consumer-oriented health care apps, particularly on the iPhone and Android. A recent survey indicated that:78% of consumers are interested in mobile health solutionsmedical and health care apps are 3rd fast growing category for iPhone and Android phonesthe Apple App store now has 17,000 health care related apps, 60% of which are aimed at the consumerWe will certainly see a huge amount of product innovation, such as the new iPhone based blood pressure monitor from Withings:2011Industry consolidation: Other industries involved will be IT, revolving around telemedicine and mobile healthTelehealth - On 1 July 2011, Medicare Australia introduced telehealth, an initiative that aims to address some of the barriers to accessing medical services for Australians in eligible telehealth areas. Telehealth provides financial incentives to eligible practitioners and aged care services who enable patients to participate in a video consultation called a telehealth consultation with a specialist, consultant physician or consultant psychiatrist.Healthcare insurance: The total number of different health care programs and different health care insurance coverages are likely to increase in the coming years. There has been an escalation in the medical plans from 42.5 million in the year 2006. The health care industry trends also show that it is likely to attain 70.2 million in the year 2025 in US.2015Mobile and wireless: Innovation is all about finding opportunity when business models change. The centuries old relationship between doctor and patient is changing in a massive way — driven with increased velocity by mobile and wireless technologies. Home care - Hospital approach to a personal-driven approach, where people will take care of themselves with help from family, friends and technologies. Venture capitalist – Many European Venture capitalists have opted to invest in proven ideas and established companies rather than innovative entrepreneurial ideas, and are sticking to the ‘Let the lame ducks die’ concept.
2011In 2011, 29 per cent of the global healthcare market sales will be generated in the Asia-Pacific region, by 2015 this is expected to reach 35%. Pharma companies increasingly adapting new business models: From production of generic drugs towards more high risk , high return R&D. 2015Middle-class population of APAC to represent 28% of global : Asia Pacific accounts for 28.0% of the global middle-class population. Middle class consumption in China and India will surpass that of EU and US by 2030. APAC will contribute to 59% of global middle class consumption by 2030, rising from 23% in 2009, Over half of the middle class will be from the APAC region by 2020.
Driver:By 2020, the number of chronic disease deaths in APAC will increase by 20% to 25 million.Chronic disease: Top 4 causes of chronic disease death: cardiovascular disease, cancer, diabetes, respiratory disease, By 2020, the cancer incidence is projected to increase to 7.1 million diagnoses per year with lung, breast, & colon cancers diagnosed most often. By 2030, 214.0 million people in APAC will have diabetes, due to unhealthy diet, sedentary lifestyles, and increased urbanization Pandemic and epidemic diseases such as tuberculosis, severe acute respiratory syndrome (SARS) and H1N1 (swine flu), according to WHO, accounted for 15% of the 37 million deaths worldwide in 2009, wherein more than one third was from Asia Pacific. Private expenditure is increasing in China and India, private spending accounted for 49.9% and 67.2% of the total health care expenditure in 2009 respectively. This causes pharmaceutical and devices company to offer value added products. In Vietnam and Indonesia, a high proportion of out-of-pocket payments is seen 90.2% and 73.2% respectively, due to very low / negligible penetration of medical insurance. Restraint:Per capita healthcare expenditure is far below global average (lowest is Vietnam and Indonesia )Shortage of professionals, The density of health care workers in APAC is 6.8 per 1,000 population, when compared to 18.9 in Europe and 24.8 in the USA in 2010. the number of doctors per 1,000 people in Indonesia, Vietnam and Thailand is less than 1, as compared to developed nations such as South Korea, Taiwan and Singapore, which have between 1.5 and 2 doctors per 1,000 people.Access to healthcare and distribution limited in emerging markets.
Drivers: Increased long term use of multiple and specialized drugs for the aging population: especially oncology products. Enhanced health awareness and purchasing power boosting over-the-counter purchaseGovernment support for generics/bio-similars; China’s government, under the 12th five-year plan (2011-15) has put emphasis on r&D and has decided to include biotechnology in its list of key strategic sectors this would result in investment in new drug research rise strongly in the next five years. Increased disease incidence boosted by availability and usage of new diagnostic toolsRestraints Patent expiry of major pharmaceutical products In Japan which is the largest market in Asia (most of which is patented products) will suffer because of patent expiry (Actos, Seroquel, Aricept, Diovan, Plavix, Abilify, Alimta, Spiriva will lose patent between 2011-2015) [IMS] Cost control measures by various governments: (India: Potential expansion of drug price controls from 74 to all 354 drugs on the essential medicines list; China: 12% drug price cut; Japan: 5.75% across the board price cut, Changes to the average overseas price calculation aimed at reducing launch prices) [IMAP] In markets with strong local manufacturing, government tenders favor local manufacturers eg. China, India, Indonesia
DriversCardiology market growing at 12.6 % in APAC and is estimated to reach $18 billion in 2015. Asia’s share of the cardiovascular device market comprises about 30 percent of the global market value. China leads APAC in cardio market, where CVD kills 2.6 million people in China, or 300 people on average every hour. Number of surgeries in hospitals across APAC is estimated at 3.0 bil in 2011 and growing at 12.0%. India and China conducted most number of surgeries in 2011, with 2.2 mil and 1.8 mil procedures respectively. Demand of minimally invasive surgeries (MIS) is growing. Japan and S.Korea lead APAC with 1.8mil and 1.1mil MIS procedures respectively in 2011. Demand for MIS increasing in Singapore, Malaysia, Australia and Thailand, driving devices market. RestraintsRegulatory and reimbursement issues for technology based pricing approval of devices remains as a hurdle to cross. National insurance covers only the basic devices. In Australia, S. korea, Japan and Taiwan stringent regulation hinders medical devices growth. Public hospitals in APAC practicing lowest price bidding leads to price war between companies and causes exit of existing and entry of new players. In 2011, there were 95,824 public hospitals and clinics in APAC, of which 60.5% belong to China, followed by 19.6 % in India.Inadequate training or certification for allied healthcare staff in countries like Vietnam and Indonesia hinders the devices market.
DriversIncreased demand in health screening due to awareness of people and preventive care culture growing strong in Asia, influenced by internet. Corporate initiatives for medical check ups also encourages X-rays and ultrasounds.Customized Asian medical imaging products to cater specific population will further gain popularity and boost the market. Philips launched Suresign VM3 to target the Indian market. R & D in medical imaging allows technological advancement - Molecular Imaging, Drug therapy combined with Ultrasound. - Collaboration with universities to conduct research to extend the use of molecular imaging for radiotherapy and Collaboration with RXI Pharmaceuticals to explore innovative ways to use ultrasound to “trigger drug therapy delivery” for cancer and cardio patients are some of the examples to note.RestraintsMarket of refurbished equipments growing at 9.0% by 2015. India emerges as the highest refurbished market in APAC. Multi modality or system interoperability challenges emerge as a restraint for medical imaging market as the equipments depend on technology to function efficiently. In countries like Indonesia, Vietnam and Philippines, the ability to overcome interoperability issues are low, thus restraints the market.
Drivers: E.g: The Government in China regulates laboratory testing. The governments in Australia & Taiwan regulate IVD products in order to ensure standardised care, which in turn boosts consumer confidence in the products. In China – local companies such as LG & Samsung are going to face competition from foreign MNCs keen to set up bases in APACE.g: In India existing private healthcare groups such as Fortis, Apollo and Max India are upgrading their diagnostic technology in order to remain competitive. Increasingly affluent middle class patients in India and China are becoming more aware and are requesting for more diagnostic testing. Restraints E.g: In China’s rural areas, there is a limited budget for purchasing instruments and this restricts growth in the low-end market. E.g: In Korea, in spite of insurance coverage for diagnostic testing, patients are unaware of this and prefer to avoid testing. E.g: As diagnostic testing is expensive, in countries such as India where there is limited insurance for diagnostic testing – any price increase is a huge deterrent to the growth of the market. In Australia, while there is a Pharmaceutical Benefits Scheme & Medical Benefits Scheme – there is no such coverage for diagnostics and patients have to bear a significant part of this cost. E.g: In India, 80% of doctors, 75% of dispensaries and 60% of hospitals are situated in urban areas. This eliminates large untapped segments of the market that would otherwise contribute the growth of the diagnostic market.
RestraintsMulti modality or system interoperability challenges emerge as a restraint for HIT. In countries like Indonesia, Vietnam and Philippines, the ability to overcome interoperability issues are low, thus restraints the market. Too many small vendors offering HIT solution hindering turn key projects.
Asia Pacific Healthcare Outlook 2012-2015: What comes next...
Asia Pacific Healthcare Outlook 2012-2015 What comes next…. Reenita Das SVP Healthcare and Life Sciences 1 “We Accelerate Growth”
What’s Trending for 2012…2015 China will be the largest pharmaceutical and medical devices market in APAC. Half of the growth in healthcare will come from the “E7”.Mobile Health to become the biggest business model disruptor creating access for healthcare delivery on a mass basis especially in emerging economies. Healthcare expenditure in APAC will increase by 75%. Competition between Asian diagnostics companies and MNCs will spur innovation. Advanced medical technologies will be defined by "lower cost scaled down technology“, reverse innovation will help leapfrog cost barriers. Surprisingly India is expected to lag behind in all healthcare segments except in Pharmaceuticals. Gen Y is going to break down some of the organizational sclerosis that is clogging up our healthcare system. Health enhancements set to become one of the top 10 market places in healthcare. Higher proliferation of non - healthcare companies entering healthcare. 2
Global Reflections from 2011 and the way forward… Healthcare becomes data driven and Patients will be customized. More Kings and Healthcare Queens of the Evolves to focus on cost The flood gate healthcare versus outcomes Silicon Valley Become a of Health system and the Hi-Tech 1 billion Service Industry Marts: “you’re industry gets seniors by Mckesson involved in 2020 and 2 sick…we’re quick” 2011 leads the way to consumerize healthcare 2015 billion by 2050 healthcare HomeMore “generics” R & D spend is healthcare and The big Tidal– technologies Gold Rush to $ 1.15 trillion up care givers Wave:providing same Emerging Markets: despite economic dominate the Performancevalue at lower Indonesia, Russia, recession agenda basedprice, stripped Mexico, Brazil, India Diagnostics and Insurancedown feature , Turkey and China Monitoring will policiessets become the – comprising 1/5th of the worldwide golden goose health care sales 3
The Asian perspective…Mobile phone users will rise from 2.2 billion in 2011to 3.4 billion in 2015 Growth of mHealth Asian will facilitate hospitals penetration of evolve to healthcare services becomeAPAC global brands APACHealthcare Healthcaremarket saleswill account for 2011 market sales comprises 35% 201529% in 2011 in 2015 Increase of Multiple green partnerships technology in between manufacturing, NGOs, private logistics and and healthcare government for delivery Asian disease based R&DTraditional Most countriesmedicine and Emergence of New in APAC wouldsupplements markets: havegaining market Vietnam, Indo implemented Over half of the middle classstrength and nesia, Laos, an EMR platforms will be from the APAC regionrecognition d Myanmar in by 2020. Gen Y to drive how development of healthcare is delivered healthcare infrastructure 4
China and Japan Steal the Show by 2015Taiwan/Indonesia catching up in Tier 2 countriesIndia is disappointing despite the hype… TIER 1 Pharmaceuticals Medical Medical Diagnostics Healthcare IT & Biotechnology Devices ImagingTotal Market $ 389.4 bil $ 140.0 bil $ 13.4 bil $ 11.0 bil $ 8.2 bil Size (2015) 1 China China Japan Japan Japan 2 Japan Japan China China Australia 3 India Australia South Korea India Taiwan 4 South Korea South Korea Australia Australia China 5 Australia India India South Korea South Korea TIER 2 1 Taiwan Taiwan Taiwan Indonesia Hong Kong 2 Indonesia Malaysia Malaysia Malaysia Singapore 3 Thailand Thailand Philippines Thailand Malaysia 4 Philippines Indonesia Indonesia Hong Kong Philippines 5 Vietnam Philippines Thailand Vietnam Indonesia 5
Global vs. APAC: The New FrontierIn 2011, APAC is estimated to be 28.5% of global market Global & APAC Healthcare Revenues US$ Bn, 2011-2015 1800.0 1600.0 CAGR Market Drivers 4.3% 1400.0 • By 2020, Chronic disease deaths in APAC will grow at 20%. 1200.0 • 15% of the 37 million deaths worldwide is 1060.7 1000.0 1017.5 related to Pandemic and epidemic 978.1 diseases, 1/3 of such was from APAC. 928.8 800.0 895.6 • Private expenditures is increasing in China and India, private spending accounted for 600.0 49.9% and 67.2% respectively in 2009. CAGR 400.0 12.1% 491.7 562.1 200.0 356.5 396.4 440.1 Market Restraints 0.0 2011 2012 2013 2014 2015 • Per capita healthcare expenditure is far APAC Rest of the World below global average (lowest is Vietnam and ($ Billion) ($ Billion) Indonesia). • Shortage of healthcare professionals. Health• By 2015, APAC could represent 34.6% of global market care workers in APAC is 6.8 per 1,000 population, compared to 18.9 in Europe and 28.5 % APAC Share 34.6% 24.8 in the Americas in 2010. • Access to healthcare and distribution limited in emerging markets. 6
Pharma market will grow at almost triple the rate compared with the rest of theworld, accounting for 1/3rd of total by 2015 Pharmaceuticals & Biotechnology, US$ Bn, 2011-20151,200.0 Market Drivers CAGR 3.8%1,000.0 • Increased long term use of multiple and specialized drugs for the aging population. • Enhanced health awareness and purchasing 800.0 power boosting over-the-counter purchase. 738.5 707.4 • Government support for generics/bio- 677.6 600.0 649.0 similars. 636.0 • Increased disease incidence boosted by availability and usage of new diagnostic 400.0 CAGR tools. 11.5% 200.0 346.1 389.4 252.1 278.4 309.4 0.0 Market Restraints 2011 2012 2013 2014 2015 APAC Rest of the World • Patent expiry of major pharmaceutical ($ Billion) ($ Billion) products. • Cost control measures by various governments. 28.4% APAC Market Share 34.5% • In markets with strong local manufacturing, government tenders favor local manufacturers. 7
APAC Medical Devices Local Asian companies spur growth through low cost products Medical Devices Revenues, US$ Bn, 2011-2015400.0 Market Drivers350.0 CAGR 5.1% • By 2015, Cardiology market is expected to300.0 reach $18 billion. • Surgical procedures are growing at 12.0 %.250.0 208.69 • Japan and South Korea lead MIS in 201.19 APAC, demand for MIS increasing in200.0 200.10 185.07 Singapore, Malaysia, Australia and 170.92 Thailand, driving devices market.150.0 • Local Asian companies of Japan, China, Korea CAGR and Taiwan offering cost effective products.100.0 14.0% 140.0 50.0 104.1 116.2 82.8 94.1 0.0 2011 2012 2013 2014 2015 APAC Rest of the World Market Restraints ($ Billion) ($ Billion) • Technology based pricing approval remains a hurdle. 26.3 APAC Market Share 36.6 • Public hospitals practice- lowest price bidding, leads to price war. • Inadequate training or certification for allied healthcare staff. 8
Medical ImagingChina is expected to own 30% of APAC market by 2015… Medical Imaging Revenues, US$ Bn, 2011-201545.0 CAGR40.0 4.3% Market Drivers35.0 • Increased demand for health screening.30.0 • Reverse innovation of customized Asian 28.49 medical imaging products to cater for25.0 27.54 26.19 different culture and population. 25.0020.0 24.04 • R & D in medical imaging allows technological advancement - Molecular15.0 Imaging, Drug therapy combined with CAGR Ultrasound.10.0 11.2% 12.2 13.4 5.0 8.8 9.8 11.0 0.0 Market Restraints 2011 2012 2013 2014 2015 • APAC Refurbished market for imaging APAC Rest of the World equipments is expected to reach 9% growth ($ Billion) ($ Billion) by 2015. • System interoperability hinders new systems 26.7 APAC Market Share 32.0 adoption in hospitals. 9
Japan will continue to lead the APAC market with more than 40% market share Diagnostics Revenues, US$ Bn, 2011-2015 Market Drivers CAGR 5.98% • Government efforts to standardize testing by regulating diagnostic testing and instruments. • MNCs setting up marketing and manufacturing bases in APAC and providing competition to local diagnostic companies. • Greater acceptance of technology by physicians and growing awareness of middle CAGR class patients. 11.44% • The molecular diagnostics market is growing by 42% in India and 22.7% in China. Market Restraints APAC Market Share • Limited government budget for diagnostics. 14.5 17.2 • Lack of awareness about healthcare insurance coverage for clinical tests. • Highly price sensitive market. • Lack of awareness and accessibility of diagnostic testing in rural areas. 10
APAC HIT growing at global pace of 9.0%. Will APAC jump the curve? Healthcare IT Revenues, US$ Bn, 2011-201545.040.0 CAGR Market Drivers35.0 9.2% • Quality, regulatory and performance30.0 application growing at 11.0% CAGR.25.0 31.96 • Patient and Revenue cycle management 31.00 related application will drive HIT with 10.3%20.0 27.01 25.29 CAGR. 22.5015.0 • Departmental Systems market size is expected to be $ 875 million in 2011, growing10.0 CAGR at 7.1%. 9.7% 5.0 8.2 5.7 6.2 6.8 7.5 0.0 2011 2012 2013 2014 2015 APAC Rest of the World Market Restraints ($ Billion) ($ Billion) • System interoperability hinders market growth. APAC Market Share • Too many small vendors offering HIT 20.2 20.5 solutions. 11
Where to place your bets in APAC: 2012- 2015 Japan S.Korea Preventive healthcare & China Thailand Wellness monitoring India Taiwan Malaysia Vietnam Singapore Indonesia Mobile Philippines Australia Healthcare EMR/ Biosimilars Robotic surgery EHR Vaccines Traditional Silver Industry pharmaceuticals Growth Equipment Hospital (home care) MIS Services Molecular Diagnostics Telemedicine Digital Imaging INNOVATION SUPER NORMALISATION LEADERSHIP TRIGGER GROWTH Time Source: Frost & Sullivan. 12
For Additional Information Donna Jeremiah Carrie Low Corporate Communications Corporate Communications Asia Pacific Asia Pacific +603 6204 5832 +603 6204 5910 email@example.com firstname.lastname@example.org Jessie Loh Reenita Das Corporate Communications Senior Vice President Asia Pacific Healthcare and Life Sciences +65 6890 0942 email@example.com firstname.lastname@example.org 14