Global Pharmaceuticals & Biotechnology Industry

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This research service presents the CEO 360 Degree Perspective for the global pharmaceuticals and biotechnology industry in 2009. It is an amalgamation of research from more than 50 Pharmaceutical research services generated by Frost & Sullivan, customer research findings based on approximately 1,000 end-user interviews approximately 50,000 hours of analyst research, in the last 2 years. Global healthcare analysts from Frost & Sullivan have contributed their market knowledge to cover the most important issues that are relevant in the healthcare industry today. The report also includes research findings from econometric, advanced technology and several other business divisions of Frost & Sullivan.

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Global Pharmaceuticals & Biotechnology Industry

  1. 1. 360 Degree CEO Perspective of the Global Healthcare Industry © 2008 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
  2. 2. The CEO’s Perspective of the Complex Business Universe TECHNOLOGY Economic Growth Emerging Trends & Process Technology Competitive Issues BEST Benchmarking PRACTICES Emerging External Competition Industry GLOBAL Impact Emerging INDUSTRY Career Opportunities Development Cultural Industry Non Integration Customer Political CEO Demo- & Industry graphics CUSTOMER Regulatory Convergence Economic Trends Economic Industry Disruptive Threats Expansion Technologies Potential Industry Shifts Behavior COMPETITIVE Competitor’s Country Customers Risk Competitive In-Direct Strategy New Competition Applications Growth Growth Functions Team ECONOMIC © 2008 Frost & Sullivan, All rights reserved www.frost.com
  3. 3. Agenda A Global Healthcare Industry Outlook B Overview By Area 1. Top 10 Global Healthcare Trends 1. Pharmaceuticals & Biotechnology 2. The Triple Healthcare Crisis 2. Clinical Diagnostics 3. Shifting Healthcare Expectations 3. Medical Devices 4. Convergence in Healthcare 4. Medical Technologies 5. Healthcare Paradigm Shift 6. Hot Spots & Emerging Geographies 7. PESTLE Analysis 8. Opportunity Analysis – Major Areas © 2008 Frost & Sullivan, All rights reserved www.frost.com
  4. 4. Top 10 Global Healthcare Trends The Triple Healthcare Crisis Shifting Healthcare Expectations Global Healthcare Convergence in Healthcare Industry Outlook Healthcare Paradigm Shift Hot Spots & Emerging Geographies PESTLE Analysis Opportunity Analysis © 2008 Frost & Sullivan, All rights reserved www.frost.com
  5. 5. Top 10 Global Healthcare Trends 2007 – 2020 High Impact Power Patient Generation Drugs get Smarter Shift to Personalised Healthcare Innovation vs. Prevention Before Knowledge Cure Healthcare globe trotters Projected Patients become Impact on the Customers Healthcare Cyber Docs Industry Hospitals go Virtual Devices become monitors, monitors become devices Low Impact Low High Certainty © 2008 Frost & Sullivan, All rights reserved www.frost.com
  6. 6. Patients become healthcare Kings and Queens, Medical communities become interconnected while doctor-patient relationship goes virtual. Major 2010 2015 2020 Trend Power Patient Patients gain access to Patient Centred Care Patients become 1 Generation health quality information Baby Boomer Retirement Starts healthcare Kings and Queens Patients Become Consumerism One Stop Shop 2 Customers Holistic health and well being Customised Products Home Services Prevention 3 Before Cure Early Treatment Implementation of IT Precise therapy becomes reality Personalised Genetic Testing Information based medicine Wellness Care Presymptomatic diagnostics 4 Healthcare Targeted Clinical Trials Major diseases understood at molecular level & treatments Healthcare Immediate Treatment abroad "medical tourism" crosses Private Companies invest in 5 Globe Trotters becomes an option the US$2 billion mark facilities and services abroad Smarter Drug cocktails will enhance productivity, memory, 6 Drugs Non-invasive delivery and physical performance Hospitals Go Medical communities (1°, 2° care) Regional/Country-wide 7 Virtual All departments/buildings within hospitals are connected become interconnected Connectivity Innovation vs. 8 Knowledge War for Medical Talent Baby Boomer Retirement Starts Medical professionals keep up with knowledge growth. 9 Devices Become Monitors Disease management Remote Patient Monitoring Self-monitoring Virtual face to face 10 CyberDocs doctor- patient relationship Perform routine diagnostics with predictive precision Cheaper care available to more people in need © 2008 Frost & Sullivan, All rights reserved www.frost.com
  7. 7. Healthcare is challenged by three interlocking crises that make present healthcare systems unsustainable Healthcare is challenged by three interlocking crises that make present healthcare systems The Size of the Problem – Quality unsustainable: Rising Costs, 15% of patients admitted to hospital Changing Demographics suffer an adverse event. Quality 8% of adverse events result in death. 6% of adverse events result in permanent disability. 10-20% of all adverse events is caused by medication errors. 10-15% of hospital admissions occur because providers do not have access to previous care records. 20% of laboratory tests are requested because the results of previous investigations are not accessible. © 2008 Frost & Sullivan, All rights reserved www.frost.com
  8. 8. If current trends hold, by 2050 health care spending will almost double claiming 20 – 30% of GDP for some economies. In almost all countries worldwide, per capita healthcare spending is rising faster than per capita income. No country can spend an ever-rising share of its output on health care, indefinitely. Spending growth must eventually fall in line with growth in per capita income. © 2008 Frost & Sullivan, All rights reserved www.frost.com
  9. 9. The balance between young and old is shifting. Ageing related and chronic diseases, are becoming significant. More people living with multiple long term illness and conditions. In 2000, 10% (606 million) of the global population was aged 60+. By 2050 this will be more than 21% (2 billion). People aged 60+ utilize 3-5 times more healthcare services than younger people. 75% of people aged 60+ have one chronic condition, while 50% have two or more chronic conditions. Chronic diseases account for more than 60% of all health care spending. Health economics dictate a shift in spending – away from treating and towards predicting, diagnosing and © 2008 Frost & Sullivan, All rights reserved www.frost.com monitoring
  10. 10. Consumer experiences in other markets affecting expectations from healthcare Greater variety of Retailing providers, products and & Finance services e.g. expensive Customer service health plans and alternative Comparison Shopping Manufacturing medicine services Self-Service & Distribution Special Offers Faster time to market Power patients have increased access Healthcare One Stop Shop Anytime Anywhere Care to computers and information Supply Chain Integration through multiple channels to seek and analyse health information Entertainment & Media Customised Products Home Services Health care that is customized to monitor, diagnose, edu cate, and intervene Freedom to make regardless of location or own decisions time-will be common. © 2008 Frost & Sullivan, All rights reserved www.frost.com
  11. 11. Convergence in healthcare enables personalisation, targeted medicines, new drug delivery mechanisms, virtual patient monitoring tools, allowing a preventative approach to healthcare Bio Chips: Controlled Released Disease Management Tailored Treatments- Telemedicine Genomic/Proteomics based Drug Delivery Health Management Predictive tests Remote Patient Monitoring Gene Mapping & Functional Analysis Preventative Programmes Life Sciences Nanotechnology IT / Digital Information Systems Delivery Systems Technology…….Enables it Economics………………Require it Demographics………….Demand it Medical Medical Devices Technologies © 2008 Frost & Sullivan, All rights reserved www.frost.com
  12. 12. Riding on a wave of technical innovations Healthcare will change from an acute “find it and fix it” system to a “wellness tracking” system Current Healthcare Systems Future Healthcare Systems Suffer from the Must Apply a “RADAR” Syndrome “GPS” Logic Telehealth Patient Appears for virtual (falls sick) interactions Patient is treated “find it and fix it” Patient is discharged Web portals to EHR Sharable Systems Personal Patient then disappears from radar screen Health Patient Scan Records Good Chronic Disease care System oriented to acute illness Patient’s role not emphasised Patient Provider Follow up sporadic Support Support Tools Tools Prevention overlooked Home monitoring devices Electronics Health Records (EHRs) Personal Health Records Chronic Disease Management Systems Web- based education and support Personal Digital Assistants Disease Management Program © 2007 Frost & Sullivan, All rights reserved www.frost.com
  13. 13. A modern healthcare system is on the horizon demanding a Healthcare Paradigm Shift ...From ...To Fragmented Patient Flow Integrated & automated Invasive Diagnosis & Less invasive, Preventative, Treatment image based Provider Centric Focus Patient Centric Centralised – Hospital Monitor De-Centralised–Shift to Community One Size Fits All Approach Personalised Medicine Therapeutics/Diagnostics/ “Theranostics” Devices Tools Treating Sickness Objective Preventing Sickness – “Wellness” © 2008 Frost & Sullivan, All rights reserved www.frost.com
  14. 14. Threats arise from unconventional players outside the traditional healthcare boundary Agriculture & Food Companies Biotech is the changing face of agriculture. Biotech crops were planted in 18 countries in 2004. By 2010, it is projected that 15 million Employers & Government farmers will grow genetically modified crops on 2007 : Integrated Healthcare up to 375 million acres in 30 countries. Management in the US has been launched as the systematic application of processes and shared information to optimize the coordination of benefits Chemical Companies and care for the healthcare consumer 2007:Roche and Toyama Chemical enter licensing agreement to develop potential Healthcare Companies breakthrough drug to treat rheumatoid arthritis Consumer Product Companies 2007 : SUPERMARKETS in the UK are increasingly becoming one‐stop‐shops for everything by branching out into Telecommunication Companies healthcare, with everything from in‐store pharmacies to blood tests, blood pressure 2007 : Orange launches "Connected Hospital", its first e‐healthcare offering designed to improve checks and health checks on your lungs. patient comfort and care quality 2008: Virgin Group launched a new healthcare network. The first of six “one‐stop shops” clinics will offer extra NHS and private services including dentistry, screening, a pharmacy and complementary therapies alongside GP practices. Ultimately, offering wider options for patients. © 2008 Frost & Sullivan, All rights reserved www.frost.com
  15. 15. A Look at the Future: Patient Centric Health & Wellness Care Web of Care NanoCare Mobile EHR Implantable eCare Smart eHomes Wearable BioSensors Health Robots Decision Support © 2008 Frost & Sullivan, All rights reserved www.frost.com
  16. 16. A Look at the Future: Patient Centric Health & Wellness Care EcoMedicine Doctors Friends NanoMedicine & Medical & Team Family eHealth Pre-emptive Medicine Advisor Network Coaches Online Support Regenerative Medicine & Advocates Communities Digital Medicine Self Care My Health & Wellbeing Databases Diet Humor Lifestyle Mind Exercise & & & Stress Body & & Nutrition Joy Reduction Spirit Fitness © 2008 Frost & Sullivan, All rights reserved www.frost.com
  17. 17. A Look at the Future: Patient Centric Health & Wellness Care © 2008 Frost & Sullivan, All rights reserved www.frost.com
  18. 18. Hot Spots and Emerging Geographies Canada Relatively high government UK/Scandinavian Countries spending on healthcare, small High government spending on number of local market healthcare IT, large market, high players, sizeable market number of healthcare IT players. Hong Kong Germany/Switzerland High government U.S. High spending on spending on Huge healthcare healthcare, large market with healthcare, small market and not too many market domestic growing, large players, increasing focus on market, gateway to opportunities, niche eHealth and digitization China players will be more India successful Large market, low operating costs, excellent local skills, high local competition, Distribution hub to the Middle- and South-East of Asia Venezuela & Colombia Constituting part of the Andean Region are the fastest growing countries in many HC categories due to large public investment Sub-Saharan Africa Limited current government spending on healthcare Australia & New Zealand IT, increases planned in the High government spending on Brazil & Mexico future. Private sector healthcare IT, small number of local Two largest healthcare developing increasing focus market players, increasing focus on markets in Latin America and on eHealth. Moderate number eHealth and digitization growing at a sustained pace of players mainly operating from South Africa. © 2008 Frost & Sullivan, All rights reserved www.frost.com
  19. 19. PESTLE Analysis – Timeline 2010 2015 2020 Growing Political Focus and Increasing harmonisation POLITICAL Pressure on Healthcare Increase influence by regulatory bodies Spend per capita on health globally grows Reduction in pharma growth Global ‘Not for Profit’ Pharma ECONOMIC (business model changes) Supply for developing countries Divide between the EU, US and rest of the world grows Patient Centric Healthcare Ageing population Health awareness (prevention) SOCIAL Personalised healthcare Increasing pressure from patient groups Raised consumer expectations Medical Ethics Health education Increasing customer awareness Information Based Systems Internet Pharmacogenomics Genomic Drugs TECHNO- Direct to Patient Advertising Combined diagnostics and therapeutics LOGICAL Health card / Smart Cards Drug Design Customised treatments Therapeutics>Theranostics (Rx/Dx) Privacy Genetic Discrimination LEGAL Biogenerics/biosimilars Faster Drug Approvals Medical Errors / Safety ENVIRON- Mergers and Acquisitions Development of specialist therapy providers MENTAL Biotech companies transition to Pharma companies Impact of HIV and other pandemics © 2008 Frost & Sullivan, All rights reserved www.frost.com
  20. 20. Opportunity Analysis – Major Areas (Europe), 2007-2012 High Revenues Pharmaceuticals Projected Revenues In 2012 ($ Billions) Medical Devices Drug Discovery Biotech Low Revenues Clinical Diagnostics Patient Monitoring Healthcare IT Medical Imaging Low High Growth Rate (2007-2012) © 2008 Frost & Sullivan, All rights reserved www.frost.com
  21. 21. Market Data Snapshot of Potential Opportunities Key Trends Global Emerging Markets Pharmaceutical & Biotechnology Trends ? Integrated Model, Pharmaceuticals, Biotech, Generics, Gene Therapy, Blockbuster Model Local Players Global Players © 2008 Frost & Sullivan, All rights reserved www.frost.com
  22. 22. Changes in the Global Pharmaceutical Environment Require Pharmaceutical and Diagram Biotech Companies to Adapt to Changing Business Models Pre 2005 2015 Blockbuster Model Preventative Healthcare & Wellness Astounding growth in the vaccines industry 2015 Opportunities Marketing of Value Added Services in the Global Niche Drugs and R&D Genomics and proteomics expected to Pharma Market reduce R&D times ‘In life testing’ will take over the current 2020 clinical trial process. Continuous data monitoring can be done by the regulators Integration & Supply Chain during the testing process. Clinical trials will eventually become shorter 2020 Integrated packages of products and services Supply chain functions will evolve to a revenue generating model. Products and services will be Patient monitoring & compliance marketed through the supply chain Pharma and medical devices providing Just –in time manufacturing, novel delivery sophisticated and efficacious solutions methods and direct to consumer distribution will Integration of pharma, diagnostics, medical be adapted from other industries like the devices, patient monitoring and healthcare IT automotive industry Will result in a high profile, risk free, user Automated dispensing of drugs friendly, low cost and safe healthcare solution Smart cards / internet to store patients details © 2008 Frost & Sullivan, All rights reserved www.frost.com
  23. 23. Cancer represents the highest potential for revenue generation and growth in the future High Revenues Established Treatments Projected Unmet Needs Revenues In 2012 Low Revenues Low High Growth Rate (2007-2012) © 2008 Frost & Sullivan, All rights reserved www.frost.com
  24. 24. Increasing Focus on Biologics in the Future Cancer Related Drugs Constitute Half of the Current Biotech Pipeline. Phase III: 5-10 years to launch Cancer Pipeline 2007 – Split by Phase III & I Monoclonal Antibodies constitute half of the Phase III biotech 2007 pipeline. More Monoclonal Antibodies are likely to reach the market in the next 5-10 years. Phase I: 10-15 years to launch Cancer vaccines are an emerging technology that are likely to create the next wave of growth in the biotechnology industry because of better safety profiles and minimal side effects Other: Includes genetic disorders, skin disorders, eye conditions, growth disorders, transplantation © 2008 Frost & Sullivan, All rights reserved www.frost.com
  25. 25. The Next Five Years will see more than 70 Major Drugs come Off-patent in the Major Markets within US and Europe. Beyond 2011 Increasing Focus on Biologics Beyond 2008 2009 2010 2011 2011……… US US US US Decreasing number 14 drugs lose patent protection Five major drugs lose The US patent for Lipitor Patent protection expires for 10 of small molecule (include super blockbusters patent protection expires and for 12 other major drugs in the US (includes drugs (includes the the superblockbusters Seroquel patent expires Effexor and Fosamax, and (includes Prevacid) blockbusters Levaquin, and Zyprexa, plus three other beyond 2013 potentially Advair) Cozaar and Protonix) blockbusters) EU Biologics will be the Nine drugs lose patent EU focus within hospitals protection in at least one of the Seven drugs lose patent EU EU in the injectables field major European countries protection in at least one Five drugs become exposed Four of these, including (including both Fosamax and of the major countries to generic competition with Zyprexa, lose patent protection Within the EU and US, Effexor) (including Nexium, Keppra the most significant in three major European there is increasing Pantozol and Cozaar) of these countries, as do seven other drugs, most notably Lipitor in competition from low November 2011 cost competitors Market Size (2007-2012) Source: IMS © 2008 Frost & Sullivan, All rights reserved www.frost.com
  26. 26. Gene Therapy will Drive the Market in the Longer Term. Technologies such as Diagram Pervasive computing are Important in Improving the Drug Discovery Process. Smart Tags Petaflop Predictive & Grid biosimulation computing Future Technology Trends Advanced Defining diseases more Pervasive accurately and creating Gene therapy uses genes to treat or computing storage prevent disease. In the future, this solutions healthcare packages for technique will allow doctors to treat a Web-scale patients with specific disease disorder by inserting a gene into a mining subtypes. Resulting in Premium Drugs and the patient’s cells instead of using drugs launch of health care kiosks or surgery A disease led approach creates a new discovery and Opportunities offering one-stop-shop development model. Technology will improve the process e.g. services making in-life testing more cost efficient. This brings significant changes for pharma companies in terms of time, development costs and success rates to man. Genomics / Gene Proteomics Cellomics Therapy, Biologics: Targeted Treatment Solutions, Integrated Semi Block Solutions Busters, Patent Expiration Strategies Growth Rate © 2008 Frost & Sullivan, All rights reserved www.frost.com
  27. 27. Shift in Growth from Mature Markets to Emerging Markets Central and Eastern Europe China High unmet needs in Cardiovascular and respiratory disease treatments API manufacturing hub Increasing private healthcare expenditure – co-payments on the rise Increasing competency in R&D Markets are dependant on parallel imports for innovative medicines outsourcing Russia, Poland, Czech and Hungary demonstrating healthy R&D climate Anti-infectives and Cardiovascular Turkey: Ability to produce active ingredients and finished products drugs – fastest growing markets Improved IP laws – potentially attractive climate for FDI Brazil Latin American hub for FDI and exports to neighboring nations Government policies favour generics use – branded drugs’ revenues are low Korea Recognized potential for CRO and Innovative capability CMO growth – still in and well developed development phase India industry Highly skilled labor and low costs – attractive market for partnerships (CRO, CMO) (APIs) Pharmaceutical companies with global presence US FDA approved labs – preferred destination for R&D outsourcing Weak IP protection – a concern Argentina Approval of ‘Generics law’- patients choose between branded and generic drugs Singapore Marketing strategy focused on US-Singapore FTA – Asia-Pacific Manufacturing hub patients, moving away from Highly competent facilities for clinical trials and drug physicians development Emerging market with huge Favorable investment policies – Asia-Pacific potential for R&D outsourcing headquarters of major foreign pharma companies © 2008 Frost & Sullivan, All rights reserved www.frost.com
  28. 28. Market Data Snapshot of Potential Opportunities Key Trends Global PEST Analysis Clinical Diagnostics Trends Integrated with Neglected sector Hottest area other HC sectors © 2008 Frost & Sullivan, All rights reserved www.frost.com
  29. 29. Increased patient driven initiatives have secured diagnostics considerable market Diagram growth potential causing significant healthcare cost savings 2005 Demand Volume Secondary Care Affordability Waiting Lists Changes in 2010 Public Anxiety the demand for healthcare Development of demand diagnostics Primary Care management policies and strategies e.g. demand driven financing 2015 Home Care/ Self Testing Pharmaceutical / Patient Driven Biotechnology Available personalised healthcare and choice Patient knowledge through multiple channels Public pressure on government Information IVD Imaging Technology One stop shop Consumer responsive providers, products and services. © 2008 Frost & Sullivan, All rights reserved www.frost.com
  30. 30. Snapshot of Potential Opportunities - Global High Revenues Projected Revenues In 2012 Low Revenues Low High Growth Rate (2007-2012) © 2008 Frost & Sullivan, All rights reserved www.frost.com
  31. 31. The next 10 years will witness the Integrations of in vivo, in vitro, and IT in the advancement of personalised medicine IN VIVO IN VITRO IN VIVO IT IN VITRO e.g. e.g. CT,MR e.g. e.g. CT/MRI radiation PCR, Immunoas , PET/CT and PACS, electronic treatment, Mammograph say Nuclear health records y IVD Test and PET/CT medicine and medication new marker management Predict Diagnose Inform Treat Diagnosis Surgery Therapy Earlier Diagnosis Screening and guidance evaluate risk pre- Prognosis/Asses Monitoring long Gain more specific disposition sment Therapy term disease selection Symptom based General Staging Follow up information diagnosis Therapy Diagnosis of Surgical Staging Define best planning recurrence individual therapy PHARMA Knowledge based decision support through integrated IT INTEGRATION of in vivo, in vitro, and IT in the advancement of personalised medicine © 2008 Frost & Sullivan, All rights reserved www.frost.com
  32. 32. Earlier diagnosis, less invasive testing and adverse drug reactions drive clinical Diagram acceptance of pharmacogenomic tests. Opportunistic Segments Pharmacogenomics Molecular Testing Efficient Decision Making and Optimisation of Cancer Testing Treatments through POCT Automation is a One Earlier Diagnosis Time Investment Point-of-care Testing Concept Less Invasive Genetic Testing Encourages Patient Screening. Instrumentation and Adverse and Ineffective Drug Automation Reactions Drive Clinical Acceptance of Pharmacogenomic Tests Growth Rate © 2008 Frost & Sullivan, All rights reserved www.frost.com
  33. 33. PEST Analysis of the Global Clinical Diagnostics Market 2007 2010 2015 Political More regulatory challenges Increased harmonization in the global market Concerns over global harmonization of IVD regulations Economical Reimbursement for Challenges likely to More understanding new tests prevail from payer groups Less skilled laboratory More adoption of pre Total laboratory technicians analytical automation automation Demand for quality healthcare Social Bio threat Ageing population Tele medicine POCT Increasing incidence of diseases Evidence based Focus on public health from Emerging infections the government diagnosis Technological ELISA POCT Isothermal based amplification PCR techniques Lateral flow tests Nano-diagnostics Microarrays © 2008 Frost & Sullivan, All rights reserved www.frost.com
  34. 34. Market Data Snapshot of Potential Opportunities Key Trends European PEST Analysis Medical Devices Snapshot ? Reduced Hospital Holistic solutions Hospital based Integrating pharma, stay and increase diagnostic Intervention in homecare & monitoring elements © 2008 Frost & Sullivan, All rights reserved www.frost.com
  35. 35. Buying Power: The changing priorities of Customers changes device markets 2005 Price, After sales service, “Opportunities for differentiation move Reliable, frequent deliveries into emphasis on safety, comfort and mobility along with delivery and service” Changing Customer 2007 Safety, comfort and mobility, Focus Delivery and service, Price 2010 Comfort, mobility & safety, efficiency, One-stop combination solutions The ambulatory, homecare and public access Opportunity market expands rapidly Large scale purchasing orders give buyer Challenge advantage and often result in price squeeze “Efficiency in sourcing becomes and/or bundling type practices more important, hence complete Increased awareness of infection control strategies solutions and comprehensive Opportunity opens alternative product differentiation avenues portfolios are preferred” “Pricing will Cost-containment initiatives reduce profit Challenge become less margins important in the Cost-cutting in purchasing opens up opportunities sense that price Opportunity for low cost producers matching will become easier Challenge Fast diffusion of innovation heats up competition as companies become more Outsourcing in production base and/or nimble” Opportunity services reduces production costs © 2008 Frost & Sullivan, All rights reserved www.frost.com
  36. 36. Snapshot of Potential Opportunities – Europe, A Rapidly Expanding Market High Revenues Projected Revenues In 2012 Low Revenues Low High Growth Rate (2007-2012) © 2008 Frost & Sullivan, All rights reserved www.frost.com
  37. 37. Aligning Market Vision: Opportunities in the Medical Devices Market Raw Markets Developing/Growing Markets Disease management Patient vs. device centred Monitoring Mature Markets Therapeutic Device Medical Procedure Scandinavia Initial Event Russia At Risk Ireland UK Wellness Poland Germany Czech Future France Republic Hungary Tissue engineering and combination devices. Merging devices with biological elements Croatia Serbia Italy Implanted diagnostics and monitors enabled by sensors Albania Disease management approach Novel drug delivery platforms in unmet needs and indications – Hep C, Chronic Pain, Depression © 2008 Frost & Sullivan, All rights reserved www.frost.com
  38. 38. Taking Stock and Looking Forward: PEST Analysis 2007 2010 2015 Political Medical tourism and Moving production base Changes in the Medical standardisation of medical and/or outsourcing results in device directive and other provision changes market trade agreements and standardisation measures potential and emphasis on political overtures regulate markets a global basis Economical Single currency stimulates Pan- Rationalisation and reduction of hospital European trade resources creates additional pressure Changes in the dynamics of healthcare provision Diagnosis Related Groups rationalise the affect funding and change routes of patient care purchase and use of devices Social An increasingly aging European Migration and changes in genetic make-up of population has implications for populations affects healthcare strategies healthcare provision Ambulatory and user-friendly devices along with combination devices expand the scope of medical device equipment Minimally invasive surgical Technological Patient data management systems and freedom of techniques along with information change supply management strategies combination devices increase level of technical sophistication Fast diffusion of technologies in medical devices leads to rapid rate of obsolescence and increased emphasis on technical research © 2008 Frost & Sullivan, All rights reserved www.frost.com
  39. 39. Revenues Key Trends Key Opportunities Global Future Medical Technologies Trends Disparate/Modular Personal Health Clinical Systems Management Tools Systems © 2008 Frost & Sullivan, All rights reserved www.frost.com
  40. 40. Interoperability Key to Adoption in an Increasingly Patient-centric Healthcare Delivery Model 2007 Medical Healthcare Volumetric Imaging Systems Imaging IT Web Based PACS Medical 2010 Imaging Multimodality Systems Patient Mobile/Roaming PACS Monitoring The 3 areas are converging driven by a reorganization of HC 2015 delivery. From large scale hospital care with high density of Image Enabled Electronic Health specializations and technologies to a network of competence Records centres achieving high quality outcome and economies of scale, linked with primary and long term care facilities. 2007 2007 Networked Modular Systems Clinical Systems Patient 2010 2010 Healthcare Next Generation Integrated Monitoring Move from Critical Care IT towards Sub Acute Care Clinical & Financial Systems 2015 2015 Monitoring of Patients at Home Personal Health Management Systems & Tools © 2008 Frost & Sullivan, All rights reserved www.frost.com
  41. 41. Snapshot of Potential Opportunities – Europe High Revenues Projected Revenues In 2012 Low Revenues Low High Growth Rate (2007-2012) © 2008 Frost & Sullivan, All rights reserved www.frost.com
  42. 42. Next Generation clinical, administrative and financial IT systems & applications enable medical error reduction, clinical optimization and evidence-based medicine Critical Care Mainstream Adoption by 2012 IT Systems Integrated Clinical/ Personal Health Financial Systems To facilitate and standardize care Management Tools delivery, investment will go into sophisticated clinical, administrative and financial systems Personal such as the EMR, CPOE, PACS, ERP and “Cradle to Grave” EMR Access Through Health Records Enterprise Scheduling Systems. Bedside Multimedia Terminals 2012-2020 The use of wireless devices within hospitals will ICU Tele-Pathology Telemedicine increase to the point where coverage and quality-of-service issues will almost disappear. Patient Self-Service Ambulatory EMR Kiosks Disaster Recovery & Business Continuity Emergency Dept Automation Enterprise Physician & Patient portals Scheduling Mainstream Adoption by 2020 Regulatory compliance will have a slow but steady PACS/RIS ERP for influence, particularly in the area of disaster recovery and Healthcare business continuity. 2007-2012 Cardiology Clinical vendors offer more-comprehensive and affordable PACS/CIS CPOE remote-hosting and high-availability options Organizations that have already made the leap to “Next EMR ePrescribing Generation” systems will be looking to further leverage their investments through physician and patient Remote eVisits Monitoring portals, remote access applications and mobile extensions. © 2008 Frost & Sullivan, All rights reserved www.frost.com
  43. 43. Next Generation clinical, administrative and financial IT systems & applications enable medical error reduction, clinical optimization and evidence-based medicine Semantic Web Semantic While “return on investment” Grid Computing Interoperability remains a critical factor for Health organizations when deciding IT Data Lifecycle Bluetooth investments, it will not become the Management Wireless 2012-2020 Networking sole factor in determining the value of IT on service quality or outcomes. Service Oriented Architecture RFID Home Health Services HL7 V3 Messages Business Process Management Distributed Antenna Systems Home healthcare could evolve from a Biometrics Speech Recognition sporadic practice today to a Electronic Data mainstream care delivery model in the Interchange Hand-writing Recognition next 5-10 years. 2007-2012 Natural Language Services like Online Tablet PCs & PDAs Processing Consultations, In-home Vital Signs Monitoring and Online Disease VoIP Context Management CCOW Protocol Management increasingly gaining Enterprise MPI momentum. © 2008 Frost & Sullivan, All rights reserved www.frost.com
  44. 44. With the goal of creating a single view of a patient’s health information, hospitals are investing in technologies to pull together all departmental systems into an integrated EHR GPs/Physicians Integration cost represents Cardiology Intensive Care 15–20% of hospital IT budgets Main cause is lack of adequate Home Care Emergency Room healthcare IT standards Current messaging and technology standards are not universally used Radiology EHR Nursing in all product portfolios, interoperability between systems using all or some of these Rehabilitation Surgery standards has not been convincingly validated, while some Laboratory Pharmacy of the standards conflict with one and other. Billing/Finance Regulations Governing Healthcare Stakeholders Legislation Standardisation Initiatives Business Compliance 95/46/EC Messaging Standards JCAHO & NCQA Corporate Compliance HIPAA Terminology Standards CEN TC 251 Business Continuity Single Market Regulations Integration Interfaces 21 CFR 11 IT Security © 2008 Frost & Sullivan, All rights reserved www.frost.com
  45. 45. Strong Foundations Required to Foster Widespread Adaptation of eHealth Models Medical Technologies Industry has the Opportunity to Build & Shape the Future Add Value for Patients & Providers High Quality, Safe Lower Cost Health Care Health Care Security & Improved Public Fraud Detection Health Individuals Self- Personalized Manage their Health eHealth Health Care Foster Adoption Enable Policies Encourage Large Scale Pilots Ensure Clinician Use Internationally Buy-in Accepted Interoperability Standards © 2008 Frost & Sullivan, All rights reserved www.frost.com
  46. 46. The magnitude of growth, the need for fast retrieval, 24/7 availability and improved record management is forcing a new look at operational data management. The amount of data generated, used and stored in the modern healthcare environment is increasing dramatically every year. No other industry in the past has Enterprise-wide databases are required such a phenomenal amount expected to grow 30-fold during the Data Storage next decade. of data to be stored for such long periods of time. Data Generation Data Access and Communication Exa Bytes Integration Images for On the Move Context Based Medicine Data Access 2020 2020 3D – 4D Images Enterprise-wide PACS Video Images 2015 2015 Digital Cardiology Tera Bytes Cardiology PACS 2010 2010 Digital X Rays Radiology PACS 2005 Giga Bytes 2005 © 2008 Frost & Sullivan, All rights reserved www.frost.com
  47. 47. PACS & Software Services to Drive Growth in Medical Imaging Market Image management tools and services to contribute to greater market share. Modality markets not likely to show considerable growth © 2008 Frost & Sullivan, All rights reserved www.frost.com
  48. 48. Move from Critical Care to Sub-Acute Care Evident © 2008 Frost & Sullivan, All rights reserved www.frost.com
  49. 49. Russia & China High Growth Markets for Patient Monitoring Equipment © 2008 Frost & Sullivan, All rights reserved www.frost.com
  50. 50. Major EHR Tenders are Being Issued & Planned Almost on a Weekly Basis Around the World – Your Challenge is to be Prepared… Canada England Infoway set up to design Connecting for Denmark National EHR - $1.2 Health – more National EHR billion of government than $10 billion since 2006 backing until 2010 Sweden Developing a National EHR France EHR Mandatory China Germany USA by 2008 Plans to develop a E-Health card national EHR Government is since January promoting NHIN and 2007 RHIO’s investing Netherlands $140 million to date. 88% of GPs Hong Kong have an EHR Territory wide Master Patient Index Mexico No EHR but aim for HL7 Singapore Integration Malaysia EMR system Lifetime Health being tendered Record by 2010 Brazil National Health Card Project. Australia Argentina HealthConnect developing a South Africa Focus on digital National Information radiography. EHR No EHR – but Network. infrastructure being New Zealand also being considered developed. National EHR system in place © 2008 Frost & Sullivan, All rights reserved www.frost.com
  51. 51. © 2008 Frost & Sullivan, All rights reserved www.frost.com
  52. 52. Appendix © 2007 Frost & Sullivan, All rights reserved www.frost.com
  53. 53. Power patients actively shaping future healthcare systems Personalisation, Mobility and Consumerism coming fast into play 1. Power Patient Generation: By 2012, 25% of patients will be power patients. More educated, wealthier, more demanding. 2. Patients become Customers: Customer services become a defining factor for the choice of providers, products and services. “In short, it is the healthcare payers, not the drug makers, that are now defining the threshold of innovation”. 3. Prevention Before Cure: Investing in early diagnostic tools and implementing modern IT systems to manage and deliver information, and introduce treatment earlier, so therapy can be more precise. 4. Shift to Personalised Healthcare: Emerging of extremely specialised and highly personalised treatments based on individual’s genetic make-up. 5. Healthcare globe trotters: Numerous countries are actively developing and promoting their medical capabilities in response to medical tourism. Cost of comparable treatment in South & West Asia i.e. India is on average between 10- 20% of those in the West. 6. Drugs get Smarter: Personalised dosages, non-invasive delivery methods etc. 7. Hospitals go Virtual: Hospitals breaking physical silos to create virtual care networks. Bio connectivity devices become the standard. 8. Innovation vs. Knowledge: Cutting edge research offer novel methodologies, treatments and drugs faster than ever before. Pace of knowledge grow is outstripping the amount and quality of skills set. 9. Devices become monitors, monitors become devices: Internet connected medical devices enter the healthcare industry. A furious pace of innovation comes to dominate the healthcare device and medical technology industries. 10. CyberDocs: nonhuman intelligence agents, will dispense medical care to patients and doctors worldwide to save money and share expertise. © 2008 Frost & Sullivan, All rights reserved www.frost.com
  54. 54. Oncology / Hematology, Antibiotics / Antivirals and Cardiovascular Lead the way in the Global Pharmaceutical Market in 2012 in terms of Market Size New markets will continue to emerge in obesity, aging. Targeted therapies will drive the well-established cancer and cardiovascular indications. Global Mortality Cardiovascular Disease Secondary prevention measures New threats to health like Pandemic and new therapies are shifting avian flu and SARS treatment from inpatient to ambulatory care setting. Number of diabetes patients Cancer globally to reach 350 million by 2025 The treatment model is changing from acute to chronic disease management as mortality rates fall. New treatments likely to have significant costs. Demand likely to grow in primary care settings. Respiratory Disease No major treatment improvements on the horizon. Unmet needs exist. Diabetes Source : SG Cowen Cell therapy, better monitoring and new pharmacological Others: Include Transplant, Sleep Disorders, Alzheimer's, Incontinence, Orphan treatments should reduce Diseases, Sex Dysfunction, Ophthalmology, Obesity, Pain mortality in the long term. © 2008 Frost & Sullivan, All rights reserved www.frost.com

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