2nd Annual, OTC Pharma Asia, 2012                   Markets of Opportunities: Where to go next?                           ...
Agenda•     Introduction•     Global trends & impact on health care•     Key emerging OTC markets•     Summary            ...
GLOBAL TRENDS & IMPACT ON HEALTH CARE                                        3
Healthcare Paradigm Shift  A modern healthcare system is on the horizon, demanding a paradigm shift             From...   ...
FFocus: moving from physicians to patients                                     O       M                                  ...
FInnovation in hospital business models: Hospitals go virtual;                       O       Mdevelopment of community bas...
FVirtual Hospitals: Shifting the Financial Gravity of the System                                                          ...
FInnovation in Hospital Business Models: Trends towards                                         O       Mspecialized care ...
FWellness of the body, the mind and the soul                                       O                                      ...
Health & Wellness: Better Health and Disease PreventionOpportunity for digestive and weight management products           ...
Health & Wellness: Better Health and Disease Prevention                                                                   ...
FWhy Wellness?                                                                                                            ...
FHealth and Wellness: Shift in Healthcare Trends From                                                         O       MTre...
KEY EMERGING OTC MARKETS                           14
South East Asia is Becoming World’s Hospital                                           Central EuropeMexico               ...
Increased Prosperity and Middle Class Consumption willFuel Healthcare Expenditure      Middle Class Consumption (2009)    ...
By 2020, two-third of the Asia-pacific population over 65 years will have  at least one chronic disease                   ...
Globalization, consumerism, and prosperity are the 3major trends that will impact healthcareGlobalization:                ...
Key emerging markets in SEAMEA              Total Pharma & OTC market in SEAMEA, USD Bn 2011         18         16        ...
Top market segments in key geographies  Indonesia           Vietnam               Turkey                             Phili...
Ease of doing business ranking                                                     Ease of Doing Business RankingSaudi Ara...
Challenges             Regulations /   Importing vs.             Registration    Manufacturing             Marketing /    ...
Summary•   Health care paradigm shift toward patient-centric model will    boost consumerism•   OTC markets in most emergi...
Opportunities exist; it is about making the right choices…                                                             24
Follow Frost & Sullivan on Facebook, LinkedIn,SlideShare, and Twitter            http://www.facebook.com/FrostandSullivan ...
Thank you                               Donna Jeremiah,  Dr. Milind Sabnis, MD, MBA                               Director...
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2nd Annual OTC Pharma Asia 2012

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2nd Annual OTC Pharma Asia 2012

  1. 1. 2nd Annual, OTC Pharma Asia, 2012 Markets of Opportunities: Where to go next? March 15, 2012Dr. Milind Sabnis, MD, MBAPrincipal ConsultantHealthcare, Asia Pacific 1
  2. 2. Agenda• Introduction• Global trends & impact on health care• Key emerging OTC markets• Summary 2
  3. 3. GLOBAL TRENDS & IMPACT ON HEALTH CARE 3
  4. 4. Healthcare Paradigm Shift A modern healthcare system is on the horizon, demanding a paradigm shift From... ...To Provider Centric Focus Patient Centric Centralized – Hospital Monitor De-Centralized – Shift to Community Invasive in general hospitals Treatment Less invasive in specialized hospitals Treating Sickness Objective Preventing Sickness – “Wellness” F O M T Source: Frost & Sullivan 4
  5. 5. FFocus: moving from physicians to patients O M T Patients are becoming: Physician Patients • Aware of treatment/medicine choices • Informed decision makers • Responsible for their own health Source: Frost & Sullivan 5
  6. 6. FInnovation in hospital business models: Hospitals go virtual; O Mdevelopment of community based care T Hospital based care Community based care Centralized model Decentralized model Patient overload Reduced patient load Increased costs Reduced cost Strain on health care resources Optimum utilization of health care resources Source: Frost & Sullivan 6
  7. 7. FVirtual Hospitals: Shifting the Financial Gravity of the System O M T100% Healthy, Independent Living Healthy, Independent Living Community Clinic Community Clinic HOME Chronic Disease Chronic Disease CARE Management Management Doctor’s Office Doctor’s Office Quality of life Assisted Living Assisted Living RESIDENTIAL Specialty Clinic Specialty Clinic CARE Skilled Nursing Skilled Nursing Facility Facility Community ACUTE Community Hospital Hospital CARE ICU ICU 0% $1 $10 $100 $1,000 $10,000 Cost of care per day Source: Frost & Sullivan 7
  8. 8. FInnovation in Hospital Business Models: Trends towards O Mspecialized care delivery around specific therapeutic areas T General Hospital Focused Specialized Hospital Value Proposition: Value Proposition: Don’t know what’s wrong? Need care for a specific condition? – We can address any problem you bring – Specialists, experience, world-class facilities Traditional operations Specialized hospitals offering minimal invasive Long post operative length of stay surgeries/ day surgeries Reduces or eliminates length of stay Source: Frost & Sullivan 8
  9. 9. FWellness of the body, the mind and the soul O T M Mood Stress levels Mind Mental health Sense of optimism Attitude Security Safety Sight / vision Touch & feel Personal values Smell / breathing Sound Body Soul Personal fulfilment Self image / self Temperature actualization Wellness Source: Frost & Sullivan 9
  10. 10. Health & Wellness: Better Health and Disease PreventionOpportunity for digestive and weight management products US Digestive Health Ingredients Market US Heart Health Ingredients Market The need for prevention and better general 1400 1310 2500 2171 health has driven the demand for Revenues in $ Mn Revenues in $ Mn 2000 1050 functional F&B products and consequently 1500 700 the market for specific functional 1000 563 ingredients 350 244 500 0 0 2008 2015 2008 2015 CAGR 2007-2015: 25.6% CAGR 2008-2015: 21.3% Global Weight Management Ingredients 15000 13900 12000 Revenues in $ Mn 9000 7500 6000 3000 0 2008 2015 CAGR 2008-2015: 9.2% Source: Frost & Sullivan Over the next 10 years, weight management, heart health, and digestive health will continue to be the high growth sectors Source: Frost & Sullivan 10
  11. 11. Health & Wellness: Better Health and Disease Prevention F O M Opportunity for nutri-cosmetics (vitamins, hyaluronic acid, PUFA) T US Nutricosmetic Ingredients The increasing focus on personal care not only drives The global personal care market in Market 2009 was estimated to be around the market for active and inactive ingredients in $250 Billion and expected to grow at 600 528 a CAGR of approximately 5-6% to 500 personal care products but also the market for 2015 Revenues in $ Mn Other 400 nutricosmetics Toiletri Skin es, 300 229 Care, 15% Oral 26% 200 Care, 100 9% 0 Fragra 2008 2015 INCREASING FOCUS ON nces, 11% Hair CAGR 2008-2015: ~15% PERSONAL CARE Make- Care, Up, 25% 14% Chinese Personal Care Active Indian Personal Care Inactive 2008 Caroten Ingredients Market Ingredients Market oids , 1200 350 330 23% Nutricosmetics are 1066 products when ingested 1000 300 Revenues in $ Mn 250 have an effect 800 203Others , 200 50% (preventive or reactive) 600 150 on skin, nails and hair. 400 326 100 Vitamin The ingestion of 200 50 s , 23% nutricosmetics is mainly 0 0 through food Omega fortification / 2008 2015 2008 2014 3 , 4% CAGR 2008-2015: 18.5% CAGR 2008-2014: 7.2% supplements Source: Frost & Sullivan 11
  12. 12. FWhy Wellness? O M T 50% Percent of all diseases Medical Costs can be avoided and prevented by lifestyle changes Direct = 31% Indirect = 69% Only 31% of healthcare Lost Productivity: Medical Costs - Absenteeism expenditure in organization is - Presenteeism spent on direct medical costs Employee & Customer Workers Dissatisfaction: Compensation - Turnover + Temporary Staffing - Poor Quality 69% of medical costs are Salary Continuation Replacement Workers: due to productivity loss - Training Interim Employee - Administrative re-work 50% of all medical costs can be saved with integrated and comprehensive health 75% caused by chronic diseases that are management. preventable Source: An Unhealthy America: The Economic Burden of Chronic Disease, The Milken Institute Center for Health Economics 12
  13. 13. FHealth and Wellness: Shift in Healthcare Trends From O MTreatment to Prevention TPrevention trends result in greater demand for areas such as weight management and functional foods and beverages Healthcare Spending Per Capita (2007, 2050) If current trends hold - by 2050, healthcare spending will double, claiming 20-30% of 20- GDP for some economies In most countries worldwide, per capita healthcare spending is rising faster than per capita income which is unsustainable Healthcare Spending by Type of Activity Due to rising costs of healthcare, future spending will move away from treatment Source: Frost & Sullivan 13
  14. 14. KEY EMERGING OTC MARKETS 14
  15. 15. South East Asia is Becoming World’s Hospital Central EuropeMexico Increased Medical Tourism Traffic StarMedica hospital groups built 7 Thailand from Western Europe hospitals in last 5 years; One Bangkok hospital AmeriMed opening 10 new hospitals (Bumrungrad) served over by 2012; 500,000 health tourists last year GrupoAngeles (largest private hospital group in Mexico) spending $700 million to build 15 hospitals in the next 3 years Korea New Entrants with strong healthcare system offerings Malaysia Medical tourism as an economic thrust Costa Rica One in five visitors is a medical tourist India Singapore Government investing $3.6 Billion More internationally in medical tourism infrastructure. accredited hospital Estimates show Indian medical facilities than any other tourism at $2.3B by 2012 country Source: Frost & Sullivan 15
  16. 16. Increased Prosperity and Middle Class Consumption willFuel Healthcare Expenditure Middle Class Consumption (2009) Middle Class Consumption (2030) Other Asia India 9% Other Asia 4% Other 14% Other 20% China 26% 2% US Japan 7% India 8% 23% EU 14% US EU 21% Japan China 30% 4% 18% Origins of Global Middle Class (%)•Middle class consumption in China and India will 100 6 5surpass that of EU and US by 2030 2 2 Middle East and North Africa 80 28•APAC will contribute to 59% of global middle class Sub-Saharan Africaconsumption by 2030, rising from 23% in 2009 53 60 Asia Pacific•Over half of the middle class will be from the APAC 40 Central and Southregion by 2020 36 America 20 22 EU•Both factors will be a major growth driver for HCexpenditure and the growth of the HC delivery market 18 10as demand increases across the region 0 North America 2010 2020 Source: OECD, Smith Barney, Frost & Sullivan 16
  17. 17. By 2020, two-third of the Asia-pacific population over 65 years will have at least one chronic disease Healthcare Industry: Population Aged 65 and The Burden of Disease in elderly, Asia Pacific Above, (Asia Pacific), 2009-2020 400.0 12.0% Percentage of Aged 65 and Above to 350.0 10.0%Population (Million) 300.0 Total Population (%) 250.0 8.0% 200.0 6.0% 150.0 4.0% 100.0 50.0 2.0% - 0.0% 2010 2015 2020 Year Aged 65 and Above (Million) Percentage of Aged 65 and Above to Total Population (%) In 2010, 7.6% (241.7 million) of the Asia Pacific population was aged 65 and above. By 2020, this will be more than 9.7% (333.95) 65.2% of those aged 65+ have one chronic condition Source: WHO, Frost & Sullivan 17
  18. 18. Globalization, consumerism, and prosperity are the 3major trends that will impact healthcareGlobalization: 1• World is becoming smaller: cheap air- travel, connectivity,internet, medical tourism• Increased healthcare awareness because of multiple media 1 Globalization Consumerism: 3 • Increased self medicating behaviour; ease of access (online) • Increased expression of consumer individuality through brand choices 2 3 Prosperity Consumerism Prosperity: 2 • Increasing disposable income, financial independence leading to exploring more choices • Increased health awareness has led to consumers spending more on health prevention and OTC Source: Frost & Sullivan 18
  19. 19. Key emerging markets in SEAMEA Total Pharma & OTC market in SEAMEA, USD Bn 2011 18 16 14 12 10USD Bn 8 % 6 4 2 0 Total Pharma sales (USD bn) OTC sales 2011 (USD bn) OTC sales CAGR (2011-2015) Source: Frost & Sullivan analysis, Data monitor, BMI, Deloitte,, EIU, NCB 19
  20. 20. Top market segments in key geographies Indonesia Vietnam Turkey Philippines• Traditional • Traditional • Cough, cold • Traditional medicines medicines • Eye drops medicines• Topical / skin • Cough, cold • Vitamins and • Analgesics products • Analgesics skin care• Analgesics treatment In African countries the key market segments are analgesics, vitamins, and cough, cold medications Source: Frost & Sullivan analysis, Data monitor, BMI, Deloitte,, EIU, NCB 20
  21. 21. Ease of doing business ranking Ease of Doing Business RankingSaudi Arabia Mauritius Ghana Turkey Zambia Vietnam Kenya Uganda Tanzania Indonesia India Nigeria Philippines Malawai 12 23 63 71 84 98 109 123 127 129 132 133 136 145 Mauritius has a very small market (14m) with low growth (6%); Saudi Arabia market is ~350mn growing at 11% Source: World bank 21
  22. 22. Challenges Regulations / Importing vs. Registration Manufacturing Marketing / Distributors / Consumers End sales channels Source: Frost & Sullivan 22
  23. 23. Summary• Health care paradigm shift toward patient-centric model will boost consumerism• OTC markets in most emerging countries are expected to grow at double digit CAGRs• There are challenges in these markets; but these can be overcome by adopting suitable market entry strategies 23
  24. 24. Opportunities exist; it is about making the right choices… 24
  25. 25. Follow Frost & Sullivan on Facebook, LinkedIn,SlideShare, and Twitter http://www.facebook.com/FrostandSullivan http://www.linkedin.com/companies/4506 http://www.slideshare.net/FrostandSullivan http://twitter.com/frost_sullivan 25
  26. 26. Thank you Donna Jeremiah, Dr. Milind Sabnis, MD, MBA Director, Corporate Communications Asia Pacific Principal Consultant 61 2 8247 8927 Healthcare, Asia Pacific milind.sabnis@frost.com djeremiah@frost.com Carrie Low Jessie Loh Corporate Communications Corporate Communications Asia Pacific Asia Pacific +603 6204 5910 +65 6890 0942 carrie.low@frost.com jessie.loh@frost.com 26

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