What’s Hot in the Healthcare Industry


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What’s Hot in the Healthcare Industry - Trends, Opportunities, and Challenges Through the Eyes of Survey Participants

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What’s Hot in the Healthcare Industry

  1. 1. What’s Hot in the Healthcare Industry Trends, Opportunities, and Challenges Through the Eyes of Survey Participants
  2. 2. Dear Sir/Madam, Thank you for taking the time to complete Frost & Sullivan’s inaugural ‘2013 Search for Growth’ survey. We received 1,835 completes from executives in more than 40 countries who selected, in total, more than 20,000 hot topics. Frost & Sullivan’s research team used the findings, and your open text feedback, to select and prioritise the topics that were deemed to be poised for the greatest growth and have since conducted (or have in the pipeline) primary research on over 70% of the topics that you selected. As a token of our thanks, we have put together some insights for you from the survey on each vertical market. We also teamed up with the design consultancy Orb to create an infographic that highlights the top 3 growth areas by vertical market and provides estimated aggregate growth rates for the hot spots in those markets. If you would like to speak with our analysts about the findings, or any of the markets forecast to grow at the highest rates, please send me an email and I will arrange it for you. We also had 5 iPad winners and sent copies of the Mega Trends book to the first 100 respondents— thanks to you all also, we trust you liked the prizes. After the excellent feedback we received on the last survey, we are going to repeat it to provide you with benchmarks on market growth. We will also benchmark your estimates of the growth rates with those of our research team, which we are particularly excited about. So thanks again for your time, and if you have any questions, please do get in touch. Kind regards, Noel Anderson 9837 2
  3. 3. Contents Section Slide Number Survey Coverage 4 Healthcare Market Outlook 9 Healthcare—Convergence with Other Industries 16 Healthcare—What Participants Saw as Hot Topics in 2013 20 Three Big Predictions for the Rest of the Decade 22 The Frost & Sullivan Story 24 9837 3
  4. 4. Survey Coverage 9837 4
  5. 5. Industry—By Region A key enabler of growth, healthcare pervades almost all aspects of the production process and service provision across Frost & Sullivan’s research coverage areas. Measurement & Instrumentation 1% Information & Communications Technologies Industrial Automation & Process Control 21% Healthcare 2% 14% 1% 9% 24% 2% 5% 4% 19% 34% 13% 5% 4% 4% 13% 59% 12% 6% 14% Energy & Power Systems 11% 10% 16% 7% Chemicals, Materials & Food Automotive & Transportation (including Logistics) Aerospace & Defence Other EIA: Europe, Israel, and Africa MENASA: Middle East, North Africa, and South Africa APAC: Asia-Pacific 9837 9% 16% 9% 10% 24% 15% 8% 11% 9% 11% 7% Overall (n=1820) North America (n=556) Latin America (n=54) 9% 2% 13% 9% 6% 22% 7% 6% 1% 12% 8% 1% 10% 3% 9% EIA (n=690) MENASA (n=162) APAC (n=358) Source: Frost & Sullivan 5
  6. 6. Industry and Function In line with the importance of Frost & Sullivan’s core business units, the A&T, HC, and ICT industries have the highest sample share. Industry M&I 1% Other 9% Function in Organisation A&D 6% Other 11% A&T 16% CEO/ Leadership 6% Corporate Strategy 11% ICT 21% R&D/ Innovation 18% CMF 9% Marketing 21% IPC 5% EPS 10% HC 14% BFS 5% EBT 4% Investors/Finance 2% Glossary M&I: Measurement & Instrumentation ICT: Information & Communication Technologies HC: Healthcare EPS: Energy & Power Systems A&D: Aerospace & Defence BFS: Business & Financial Services A&T: Automotive & Transportation IPC: Industrial Automation & Process Control CMF: Chemicals, Materials & Food EBT: Environmental & Building Technology 9837 Sales Leadership 11% Market Research 8% Competitive Intelligence 5% Corporate Development 6% Source: Frost & Sullivan 6
  7. 7. Company Size—By Region Of respondents, 56% work in large organizations with over $1 billion annual revenues. In North America, the share of large companies is the highest. Company Size by Region, Global, 2012 56% 62% 44% 53% 59% 53% 27% 18% 20% 29% 20% 23% 27% L. America n=54 EIA MENASA n=135 APAC n=258 27% 23% 22% 21% 16% Overall n=1410 N. America n=464 Company Size: Small (annual revenue up to USD 100 million) Medium (annual revenue of USD 100 million up to USD 1 billion) Large (annual revenue over USD 1 billion) Small (annual revenue up to USD 100 million) N=1410 (excl. NA/Don’t know n=410) Q96 What are your expected annual revenues globally in 2012 in US dollars? 9837 n=508 Source: Frost & Sullivan 7
  8. 8. Industries Tracked in 2013 Respondents track an average of 2.2 industries. HC, ICT, A&T, and EPS will be the most tracked industries in 2013. Number of Industries Tracked in 2013 3.8 2.2 Overall (n=1,820) 2.5 2.3 2.1 1.9 A&D (n=113) A&T (n=287) CMF (n=171) EPS (n=185) 3 2.6 2.1 1.6 EBT (n=71) HC (n=247) IPC (n=88) ICT (n=383) M&I (n=26) North America (n=556) Latin America (n=354) EIA (n=690) MENASA (n=162) APAC (n=358) 2.2 2.4 2.1 2.6 2.2 By Region By Function CEO/ R&D/ Leadership Innovation (n=118) (n=334) 2.3 2.3 Sales Leadership (n=209) Corporate Development (n=105) Market Research (n=148) Competitive Intelligence (n=83) Investors/ Finance (n=43) Marketing (n=375) Corporate Strategy (n=197) 2.2 2.3 2.2 2.0 2.5 2.1 2.2 Source: Frost & Sullivan 9837 8
  9. 9. Healthcare Market Outlook 9837 9
  10. 10. Pharmaceuticals—Business Outlook Last Decade Revenue Approximately $328 billion (pharma) (total drugs market - $353 billion) Main Focus Focus was on better screening of drug candidates and faster market launch because the clinical development process is risky and lengthy. Current Decade Approximately $766 billion (pharma) (total drugs market - $830 billion) Commercialization of drug candidates is the main focus. Non-core competencies, including activities such as drug discovery, drug development (early stage clinical development), and manufacturing, are being outsourced. M&As and alliances with biotech firms M&As and alliances with pharmaceutical firms Market Dynamics Types of Companies Very high ROI for successful drug candidates (those with successful market launch and positive clinical trial data on efficacy and safety), for example, Pfizer's Lipitor (Atorvastatin) Big pharma, small and medium pharmaceutical companies, CMOs, CROs, generics Acquisition, and alliances with drug discovery, drug development companies, and academic institutions reduces the growing R&D productivity gap for the pharmaceutical companies. De-risking of R&D and drug development with cost-effective model is the main driver for the growth of pharmaceutical firms. Big pharma, biopharmaceutical companies, small and medium pharmaceutical firms, CROs, CMOs, generics Next Decade Approximately $1,350 billion (pharma) (total drugs market - $ 1,487 billion) Convergence with drug discovery, drug development, and drug delivery M&As and alliances with drug discovery, drug Development, and drug delivery companies Focus is on less competitive, niche disease segments, and; thereby, shifting away from the blockbuster model. Integrated companies Source: Frost & Sullivan 9837 10
  11. 11. Biotechnology—Business Outlook Last Decade Current Decade Next Decade Revenue Approximately $25 billion Main Focus Market Dynamics Types of Companies Main focus was on drug discovery, leveraged by a healthy funding scenario. The high growth rate and increasing number of licensing and collaboration deals in the biotech industry attracted investments, not only from pharmaceutical companies but also from investment banks and VCs due to the high future prospects of the industry. Moreover, increased funding and support from the government were the other key drivers for growth of the biotechnology industry. Drug discovery, drug development companies, CROs, CMOs, and biotech firms Approximately $63 billion Focus is on niche disease segments such as cancer and autoimmune diseases. Lucrative disease segments with premium pricing opportunities such as oncology are the main growth driver. Success of various ,onoclonal antibodies (mAb) such as Rituxan/ MabThera (rituximab) and Avastin (bevacizumab) is a key impetus for growth. Drug discovery, biopharmaceutical companies, biotech firms, CROs, CMOs, and biosimilar companies Approximately $136 billion Personalized medicine - more efficient drug development process, based on the research on disease pathophysiology and genetic risk factors Potential high ROI on personalized medicine will be the main growth driver. Integrated companies Source: Frost & Sullivan 9837 11
  12. 12. Clinical Diagnostics—Business Outlook Last Decade Current Decade $24,504.2 Million $40,208.3 Million Next Decade $78,234.7 Million Revenue Main Focus Immunochemistry and clinical microbiology were the largest segments mainly because the human genome had just been sequenced and; therefore, molecular techniques were under development or on their way to the market. Immunochemistry and culture-based techniques were the only available technologies. As opposed to tests that needed to be scaled up to be performed at the central lab, tests now need to be scaled down to be performed at the point of care, but at the cost of a lab test. Molecular diagnostics are now recognised as a very effective alternative to culturebased and ELISA-based techniques. Market Dynamics There was need for a validated technique that could be scaled up to the volumes of central laboratories, which offered actionable results at economic costs. EIA and culture-based were best-suited at that time and; thus’ were the most widely used techniques. Need for speed and need at the point-of care are the key drivers of today. Biomarkers-based diagnostics are driving growth in many segments, such as molecular diagnostics, point of care, and tissue diagnostics. Types of Companies EIA reagents and equipment suppliers and reagent suppliers for both EIA and culture techniques such as Abbott, Bio-Rad, Bayer, Roche, Beckman Coulter, bioMerieux, Sigma Aldrich Diagnostic companies with multiple areas of focus include Roche, Siemens, J&J, Abbott, Beckman Coulter, Bayer, bioMerieux, Sysmex, Alere, Becton Dickinson, Instrumentation Laboratory, Qiagen, Radiometer, and GenProbe. Personalised medicine will be mainstream, and technologies that will enable the personalisation of medicine, such as molecular diagnostics and point of care testing, will grow. Companion diagnostics will be a main area with significant revenue, although it is currently not significant enough to form a part of the IVD market. More personalised and quicker diagnosis at the point of need will continue to be key drivers in 2020. The transition towards personalised medicine will lead to the generation of significant quantities of data per patient, making information storage and management more critical in the future. Laterally integrated diagnostic companies are composed of biomarker companies, OEM manufacturers, and the present diagnostic leviathans. Leaders in data storage and management in other fields such as Google could potentially be expected to enter the healthcare space in a big way. Source: Frost & Sullivan 9837 12
  13. 13. Medical Devices—Business Outlook Last Decade Revenue $153.40 Billion Current Decade Next Decade $271.55 Billion $509.25 Billion More emphasis on quality of treatment and cure because treatment time was never a constraint. Invasive procedures were the golden standard. Faster diagnosis and prompt therapy along with patient safety using minimal invasive technologies Market Dynamics Consistently increasing number of chronic cardiovascular diseases led to most pertinent surgical intervention when absolutely required. Improved diagnostic imaging capabilities coupled with advanced minimally invasive technologies has led to increased procedural volume and product uptake. Types of Companies Presence of individual imaging, devices, and pharmaceutical companies, for example, Johnson and Johnson, GE Healthcare, and Merck and Co. Main Focus Individual companies have started moving towards intersection, for example, BD and Novartis. Minimal invasive technologies becoming the preferred choice; therefore, reducing therapy duration and post-operative complications. Advancement in minimally invasive technology in the form of fully automated, robot-assisted, minimally invasive cardiac surgery and continuous diagnostic preoperative imaging A definite intersection of applications and product line between established companies. For instance, a leading vendor from the cardiac imaging industry collaborating with participants from the cardiac devices and consumables industries. Source: Frost & Sullivan 9837 13
  14. 14. Top 10 Global Healthcare Trends 2010 – 2020 High Impact Gene Therapy Monoclonal Antibodies Cancer Vaccines Transcatheter Valves Projected Impact on the Healthcare Industry Hygiene Compliance Monitoring Low Impact High Low Certainty 9837 Source: Frost & Sullivan 14
  15. 15. Global Perspective—Life Sciences Industry Hotspots • • • • High unmet needs in cardiovascular and respiratory disease treatments Increasing private healthcare expenditure—co-payments are on the rise Markets are dependent on parallel imports for innovative medicines. Poland, Czech, and Hungary demonstrating healthy R&D climate. • API manufacturing hub • Increasing competency in R&D outsourcing • Anti-infectives and cardiovascular drugs – fastest-growing markets • Latin American hub for FDI and exports to • Improved IP laws – potentially attractive Central and neighboring nations climate for FDI Eastern Europe • Government policies favour generics use, so branded drugs’ revenues are low. China • Recognized potential for CRO and CMO growth is still in development phase. India • Highly skilled labor and low costs— attractive market for partnerships (CRO, CMO) (APIs) Singapore • Pharmaceutical companies with global presence Brazil • US FDA approved labs are preferred destinations for R&D outsourcing. • Weak IP protection is a concern. Argentina • Approval of ‘generics law’—patients choose between branded and generic drugs • Marketing strategy focused on patients, moving away from physicians • Emerging market with large potential for R&D outsourcing • US-Singapore FTA—Asia-Pacific manufacturing hub • Highly competent facilities for clinical trials and drug development • Favourable investment policies—Asia-Pacific headquarters of major foreign pharma companies Source: Frost & Sullivan 9837 15
  16. 16. Healthcare—Convergence with Other Industries Key Industries Tracked in Addition to Company’s Core Markets, 2013 Industry Cross-interest 1 Cross-interest 2 Cross-interest 3 n A&D ICT 39% A&T 26% EPS 20% 111 A&T EPS 25% ICT 24% EBT 9% 282 CMF EPS 37% A&T 36% EBT 27% 167 EPS EBT 24% A&T 20% IPC 18% 180 EBT EPS 44% ICT 26% CMF 21% 57 HC ICT 18% CMF 15% M&I 8% 238 IPC EPS 42% A&T 26% CMF 26% 78 ICT HC 23% A&T 19% EPS 19% 371 M&I A&T 42% EPS 38% IPC 38% 26 A&D = Aerospace & Defence A&T = Automotive & Transportation CMF = Chemicals, Materials & Food EPS = Energy & Power Supplies EBT = Environment & Building Technologies 9837 HC = Healthcare IPC = Industry & Process Control ICT = Information & Communication Technology M&I = Measurement & Instrumentation Source: Frost & Sullivan 16
  17. 17. Healthcare—Convergence with Other Industries Key Areas of Technology and Business Model Convergence Healthcare Connected Health Life Sciences mHealth, Health Information Exchange Systems, Chroni c Disease Management Active Pharmaceutical Ingredients, Excipients and Intermediates, Drug Delivery, Device Coatings Robotic Diagnostics, Auto mation Lab-onChip, LIMS, Robot ic Surgery Valves, Heat Exchangers, Ce ntrifuges, Dryer s, Bioreactor Supply Chain, Warehous ing, Freight Forwarding Bulk Drugs, Chemicals , Biologics, and Finished Dosage. Cryostorage of Devices Advanced Medical Technology ICT CMF M&I IPC A&T Source: Frost & Sullivan 9837 17
  18. 18. Interest in Mega Trends Interested Overall (n=1820) A&D A&T Undecided Not interested 73% 66% 22% 23% 11% 73% CMF 23% 81% EPS EBT 77% IPC ICT M&I A&D = Aerospace & Defence A&T = Automotive & Transportation CMF = Chemicals, Materials & Food EPS = Energy & Power Supplies EBT = Environment & Building Technologies 67% 4% 17% 76% HC 5% 19% 6% 31% 75% 77% 4% 23% 27% 64% 2% 5% 20% 12% 4% 12% HC = Healthcare IPC = Industry & Process Control ICT = Information & Communication Technology M&I = Measurement & Instrumentation Source: Frost & Sullivan 9837 18
  19. 19. Ranking of Mega Trends Health, wellness, and well-being is the highest ranked Mega Trend. Overall A&D A&T CMF New Business Models: Value for Many 53% 51% 45% Future of Mobility 51% 51% 73% 37% Social Trends 44% 37% 45% 37% Beyond BRIC: The Next Game Changers 43% 62% 45% Connectivity and Convergence 42% 44% 45% Future Infrastructure Development 40% 38% 42% Smart is the New Green 38% 37% 35% Health, Wellness, and Wellbeing Urbanization: City as a Customer Innovating to Zero Bricks and Clicks 31% 29% 30% 27% 30% 11% A&D = Aerospace & Defence A&T = Automotive & Transportation CMF = Chemicals, Materials & Food EPS = Energy & Power Supplies EBT = Environment & Building Technologies 9837 15% 10% 18% 38% 25% 10% 47% 50% 18% 40% 53% 38% EPS 50% 34% 31% 43% 33% EBT 46% 24% 60% 38% IPC 62% 50% 74% 24% 41% 52% 39% 43% 43% 44% 39% 43% 44% 23% 36% 55% 59% 18% 38% 12% 33% 42% 27% 26% 14% 49% 32% 12% 81% 14% 23% 8% ICT 48% 60% 37% 10% HC 54% 30% 70% 40% M&I 43% 29% 14% 57% 21% 43% 25% 29% 22% 19% 21% 33% 20% 26% 19% 9% 10% 7% 21% 7% HC = Healthcare IPC = Industry & Process Control ICT = Information & Communication Technology M&I = Measurement & Instrumentation Source: Frost & Sullivan 19
  20. 20. Healthcare—What Participants Saw as Hot Topics in 2013 Healthcare: Identification of Hot Topics, Global, 2013 Rank Market Topic % of Respondents Nominating as Hottest Topic 1 Mobility in Healthcare/mHealth 51% 2 Cloud in Healthcare: Current Issues 45% 3 Regulatory Environments 44% 4 Cancer Market Outlook 39% 5 Remote Monitoring 38% 6 Drug Delivery Market 35% 7 Patient and Consumer Engagement 32% 8 Healthcare Dashboards 31% 9 Electronic Health Records/Electronic Medical Records 31% 10 Growth Drivers Impacting the Medical Devices Segments 30% 11 Drug Discovery Research Outsourcing Market 28% 12 Homecare Market Trends - Demand, Addressable Segments, Infrastructure, and Policy 25% 13 Video Telemedicine 24% 14 Cardiovascular Therapeutics - Dyslipidemia/CHD Prevention 24% 15 Changing Profiles of Influencers and Decision-makers Impacting Medical Device Choice 22% Source: Frost & Sullivan 9837 20
  21. 21. mHealth • The unprecedented spread of mobile technologies as well as advancements in their innovative application to address health priorities has evolved into a new field known as mHealth (mobileHealth). It is largely supported by mobile devices, such as mobile phones, patient monitoring devices, personal digital assistants (PDAs), and other wireless devices. The penetration prospects of mHealth technologies is significant in the following areas: wireless vital signs monitoring, location-aware tele-monitoring systems, and Bluetooth wireless technology-enabled health trackers. It is an exciting area of opportunity for healthcare growth and will provide innovative solutions for stakeholders, both providers and patients alike, across the spectrum. Cloud in Healthcare • As more healthcare IT and patient monitoring tools are integrated, every hospital facility will eventually have to acquire a fully-enterprise wireless solution. The most innovative mobile healthcare solutions that best meet pressing healthcare needs will be adopted as the gold standard. Regulatory Environment Hot Topics—Factors Highlighting Importance of Topics Why is mHealth, Cloud in Healthcare and Regulatory Environment considered as Hot Topics by Survey Participants? • Enterprise-wide healthcare informatics will improve quality of medical services and efficiency of operations while reducing expenditures. Cloud computing is considered to be a key enabler for enterprise-wide solutions. Implementing cloud computing technologies appropriately can help healthcare providers improve the quality of medical services and the efficiency of operations, share information across geographic locations, and manage expenditures. The concept can be applied in a variety of ways, including data storage and data loss prevention, maintaining patient information records, and authorized sharing of information. • The advantages that cloud computing provides can change the dynamics of the healthcare informatics industry over time. The need for efficient sharing of information across locations in a synchronised manner would be a key driver for cloud computing in healthcare. • Recent healthcare reforms and policy initiatives across many countries emphasises quality of care more than quantity. In the absence of a sufficient proof of clinical benefit, reimbursements may pose a major hurdle. Source: Frost & Sullivan 9837 21
  22. 22. Three Big Predictions 1 As healthcare is geared towards a personalized medicine model, companion diagnostics will alter drug development and the commercialization process of drug candidates. Combining biomarkers and drugs will result in enhanced therapeutic efficacy and safety. 2 The healthcare and life sciences industry will consolidate further in this decade with many big pharma companies seeking alternatives to the blockbuster model. 3 The rise of new technologies capable of integrating medical devices into a connected platform enhances the functionality of devices, reduces the man power burden, and minimizes errors. Source: Frost & Sullivan 9837 22
  23. 23. Disclaimer Frost & Sullivan takes no responsibility for any 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 their internal use and not for general publication or disclosure to third parties. No part of this research service may be given, lent, resold or disclosed to non-customers without written permission. Furthermore, no part may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the permission of the publisher. For information regarding permission, write to: Frost & Sullivan 4 Grosvenor Gardens, London SW1W 0DH The United Kingdom © 2013 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. 9837 23
  24. 24. The Frost & Sullivan Story 9837 24
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