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APAC Healthcare Market Overview
Report by:
Shivani Chauhan
Asia-Pacific - Pharma’s New Centre of Gravity?
Report by:
Shivani Chauhan
• Asia Pacific (APAC), the third largest pharmaceutical market in the world after North America and Europe, with
generics ...
By 2017, the global pharmaceutical market is expected to grow to US$1.2 tn
2012-2017 global pharmaceutical market by regio...
Changing disease patterns also will
provide pharmaceutical companies
with additional opportunities to
market their existin...
Development of therapeutic areas in emerging markets within the next five years
Source: Survey results; Strategy & analysis
APAC is expected to be the key driver of global growth
15% 12-14%
12% 11-13%
3% 2-4%
USD Bn
CAGR %
(2008-2013) (2013-2017)...
0
5
10
15
20
25
30
35
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Within APAC, pharma market...
Key Asian Country Forecasts:
Growth prospects in Tier 2 markets, while dwarfed by China, are not insignificant
Source: BMI...
Low per capita drug spending provides pharma companies opportunities to tap into a broad
consumer base going forward
-10,0...
Interms of therapy areas, Pain, Asthma/COPD and Oncology have outpaced the broader APAC
market in the past year
Sales and ...
Key industry trends:
Growing trend towards cost-containment and policies supporting generics across Asia
CHINA
● Strengthe...
Keyindustry trends:
Growing trend towards cost-containment and policies supporting generics across ASEAN
Thailand
● Move t...
In Asian emerging markets, the sheer size of the task of improving healthcare have expedited the
rise in price pressures
S...
However, there is a growing trend towards cost-containment and policies supporting generics
across Asia
Mandatory price
cu...
Generics penetration varies across SEA and has increased overall across countries
Expanded SEA Overall Market – Originator...
Reformand containment, coupled with strong local generics plays, is making SEA an increasingly
difficult turf for MNCs
Exp...
The strong Asia growth momentumis driven by favorable macro-economic growth, rising
healthcare spend and urbanization
High...
Regional Business Risk/Reward
Source: Hong Kong BMI Pharmaceuticals and Healthcare Report 1Q 2013
Industry
Rewards
Country...
The strong Asia growth momentumis driven by favorable macroeconomic growth, rising healthcare
spend and urbanization
Aggre...
Key challenges to
further growth in
emerging markets
Source: Strategy & analysis
Please feel free to contact for further information :
Shivani Chauhan
Direct: +91 9758833730
shivanichauhan232@gmail.com
T...
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Apac market overview 1

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Asia-Pacific: Pharma's New Centre of Gravity??
A high-growth region for the pharmaceutical industry, Asia-Pacific incorporates a vast geography with a $20 trillion economy, and is home to over three billion people.

Today, the five countries in the region - China, Japan, India, Australia and Korea - rank among the Top 15 economies in the world.
Key drivers

Today, the two key drivers for emerging market growth are economic development and growing demand for healthcare from the populations of the countries that make up this diverse region.

Published in: Healthcare

Apac market overview 1

  1. 1. APAC Healthcare Market Overview Report by: Shivani Chauhan
  2. 2. Asia-Pacific - Pharma’s New Centre of Gravity? Report by: Shivani Chauhan
  3. 3. • Asia Pacific (APAC), the third largest pharmaceutical market in the world after North America and Europe, with generics being the major driver for the pharmaceutical industry. • In developing countries the pharma sales growth is higher, while the growth for developed countries is lower. • Countries that will experience strong growth include Vietnam (16.4%), China (15.0%), Sri Lanka (12.4%), Myanmar (12.2%) and Bangladesh (11.5%). • Pharmaceuticals mount the lion share in terms of volume, having evolved into a US $1.2 trillion industry that generates more than 60 percent of the segment with growth expected to reach to 5.3 percent per annum between 2012 and 2017 (IMS 2012). • Combined sales of prescription drugs and over-the-counter (OTC) medicines are forecast to increase from USD276.6bn in 2013 to USD384.7bn in 2018, representing a five-year compound annual growth (CAGR) of 7.0%. Executive Summary
  4. 4. By 2017, the global pharmaceutical market is expected to grow to US$1.2 tn 2012-2017 global pharmaceutical market by region (USD, bn) United States 2013 size: US$ 347bn 2017 size: US$ 384bn CAGR 2013-17: 1-3% Japan 2013 size: US$ 119bn 2017 size: US$ 124bn CAGR 2013-17: 2-4% Western Europe 2013 size: US$ 188bn 2017 size: US$ 198bn CAGR 2013-17: 1-3% “APAC” 2013 size: US$ 129bn 2017 size: US$ 223bn CAGR 2013-17: 12–14% Rest of World 2013 size: US$ 208bn 2017 size: US$ 310bn CAGR 2013-17: 11% Most APAC countries are expected to drive global growth Mature markets expected to see minimal growth Positive growth expected, as economies recover from the Global Economic Crisis Aging population and price reforms benefitting patent brands to drive growth Healthcare reform and expanded access expected to drive positive growth Global Market 2013 Size: US$ 991Bn 2017 Size: US$ 1,240Bn CAGR 2013-17: 6% Source: IMS Health Market Prognosis 2012; IMSCG Analysis APAC: Korea, China, India,, Taiwan, Singapore, Sri Lanka, Malaysia, Thailand, Indonesia, Hong Kong, Philippines, Vietnam, Bangladesh, Pakistan, Australia, New Zealand
  5. 5. Changing disease patterns also will provide pharmaceutical companies with additional opportunities to market their existing and increasingly global and innovative product portfolios. Development of disease patterns Mortality rates, 2008–30 * Disease patterns in 2008 compared to expected pattern by 2030
  6. 6. Development of therapeutic areas in emerging markets within the next five years Source: Survey results; Strategy & analysis
  7. 7. APAC is expected to be the key driver of global growth 15% 12-14% 12% 11-13% 3% 2-4% USD Bn CAGR % (2008-2013) (2013-2017) 2% 7% 1-3% 1% 5% 6% Global Pharmaceutical market by region in USD Billions (2007-2017) 5-7% 1-3% 1,300 0 1,100 1,000 900 800 700 600 500 400 300 200 100 1,200 9% 2008 $787 10% 39% 22% 12% 12% 3% 12% 2011 $937 11% 38% 20% 7% 12% 3% 11% 6% Other North America Western Europe Latin America Japan Middle East & North Africa APAC* 2017 $1,240 12% 31% 16% 10% 10% 3% 18% 2016 $1,161 12% 32% 17% 9% 2010 $890 10% 38% 21% 6% 12% 2% 10% 2009 $843 10% 11% 3% 17% 2015 $1,099 11% 33% 17% 9% 11% 3% 16% 2014 $1,042 2% 34% 18% 8% 11% 3% 15% 2013 $991 11% 35% 19% 8% 12% 3% 11% 2012 $959 11% 36% 20% 7% 8% 39% 22% 6% 12% 2% 13% Global Forecast Source: IMS Health Market Prognosis, May 2013 10% 8-10% Note: Other countries include Russia, Eastern Europe, Middle East, Africa and Oceania; *APAC includes KR, CN, TW, SG, MY, TH, ID, HK, PH, VN, AUS, NZL Note: Historical pharma market totals may have been revised due to exchange rate adjustments
  8. 8. 0 5 10 15 20 25 30 35 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Within APAC, pharma market growth in China and Vietnam will outpace other countries in the medium term Source: IMS Health Market Prognosis 2013-2017 APAC CAGR = 14% 2008-2013 APAC CAGR = 15% APAC* pharmaceutical market size and growth by key countries (2007-2017) Developed Asia OthersPharmerging Asia Expansion of private hospital sector with increasing private investment will contribute to Pharma growth in Vietnam Govt investment in healthcare infrastructure in rural China to drive future growth Bubble size = USD Bn 2013 sales 12 Bn USD ForecastCAGR(2013-2017)(%) Historical CAGR (2008-2013) (%) Singapore Philippines Malaysia Indonesia Hong Kong China Vietnam Thailand Taiwan Korea Key Insights •Between 2013 and 2017, APAC is expected to grow by c.$93 Bn USD to reach c.$225 Bn USD •China is expected to form 87% of APAC’s total growth, with double digit annual growth •Indonesia and Vietnam are also expected to average double-digit growth
  9. 9. Key Asian Country Forecasts: Growth prospects in Tier 2 markets, while dwarfed by China, are not insignificant Source: BMI; sales reported in US$bn at constant exchange rate at consumer prices Country US$bn US$bn US$bn US$bn US$bn US$bn CAGR % CAGR % 2012 2013 2014 2015 2016 2017 2007-2012 2012-2017 China 80,1 94,1 108,2 123,2 138,1 152,8 23,9 13,8 India 18,0 19,8 22,0 24,4 27,1 30,1 17,3 10,9 South Korea 15,8 16,9 18,0 19,0 20,1 21,1 9,0 5,9 Indonesia 6,7 7,3 8,0 8,7 9,5 10,3 11,4 9,0 Taiwan 5,2 5,5 5,7 5,8 5,9 6,1 4,0 3,0 Thailand 4,4 4,7 4,9 5,2 5,5 5,8 4,9 5,6 Vietnam 2,9 3,3 3,9 4,4 5,1 5,7 27,0 14,9 Philippines 3,0 3,1 3,3 3,4 3,6 3,8 3,8 4,7 Malaysia 2,0 2,1 2,3 2,5 2,7 2,8 10,6 7,5 Hong Kong 1,3 1,4 1,5 1,6 1,7 1,8 7,2 6,2 Singapore 0,7 0,8 0,8 0,9 1,0 1,0 4,2 6,3 Total 140,2 159,2 178,5 199,2 220,1 241,4 17,1 11,5
  10. 10. Low per capita drug spending provides pharma companies opportunities to tap into a broad consumer base going forward -10,000 -5,000 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 Taiwan Korea India ANZ China Japan 2011 pharmaceutical spend per capita** (USD) Indonesia 5302402302202102001901801701601501406050403020100 Singapore Philippines Pakistan Bangladesh Vietnam Thailand 900 2011 GDP per capita (USD) Bubble size = 0.1 Bn. 2011 population APAC^ Pharmaceutical and GDP per capita dynamics Relatively low levels of per capita drug spend imply a large portion of the population has limited access (i.e. affordability constraints) to drug use. Source: IMS Market Prognosis, 2012; **2011 Total IMS MIDAS country sales / 2011 IMF population figures; APAC includes Japan, Korea, China, India, Australia, New Zealand, Taiwan, Singapore, Malaysia, Thailand, Indonesia, Hong Kong, Philippines, Vietnam, Bangladesh, Pakistan Asia ClusterPharmerging AsiaDeveloped Asia 2011 Asia ex. JP GDP per capita = 3,800 USD 2011 Asia Ex.JP pharma spend per capita = 33 USD 2011 Asia incl. JP GDP per capita = 5,200 USD 2011 Asia incl. JP pharma spend per capita = 64 USD
  11. 11. Interms of therapy areas, Pain, Asthma/COPD and Oncology have outpaced the broader APAC market in the past year Sales and growth of top therapy areas* in APAC (2008-2013) 2008-2013 APAC CAGR = 15% Source: IMS Health MIDAS, 2013; Note: *Top therapy areas comprise 80% of the APAC market; MAT Q1/2008 – MAT Q1/2013 (MAT - Moving Annual Total) 2012-2013 APAC YoY Growth = 15% Others Bubble size = USD Bn 2013 sales 12 Bn USD -10 -5 0 5 10 15 20 25 30 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Ophthamology Anaesthesia Asthma/COPD Inflammatory diseases Dermatology Pain Liver Psychiatry RecentGrowth(2012-2013)(%) Historical Growth (2008-2013) (%) Cough & cold Vitamins & suppl Oncology / Immunology Neurology Vascular disease Hemotology Oncology Hospital solutions GI CVM Infectious diseases
  12. 12. Key industry trends: Growing trend towards cost-containment and policies supporting generics across Asia CHINA ● Strengthening of primary care system through healthcare reform ● Expansion of private insurance ● New provincial NRLs cover new drugs ● Variable reforms yielding fragmented market ● Promotion of low cost Gx in hospitals ● Price controls to be extended to all reimbursed drugs, including patented brands ● Increasing role of pharmaco-economics ASEAN • Strengthening of private health infrastructure in ID • Increase in access to drugs in PH, ID & TH through government intervention • ASEAN harmonization & stronger GMP norms • MY & SG expected to remain free of price control • Increasing emphasis on branded generics • Pressure of price controls for EDL expected to continue in PH & TH, and rise in ID & VN • Increasing level of protectionism • Consolidation of reimbursement schemes in TH • Increasing level of protectionism despite ASEAN harmonization Positive impact Negative impact Source: IMSCG IP and Analysis Hong Kong • Cost control in drug expenditure in public hospitals leading to increase in the use of generics • Generic medicines are the fastest growing segment in Pharmaceutical Industry • Healthcare Coupons for geriatrics • Public Healthcare Insurance under consultation due to ageing population • Pharmaceutical Trade is a Free Market • No restrictions or price control in private sector Key regional trends • Governments promoting higher usage of generics • Cost containment policies getting enforced stronger • Increasing level of protectionism
  13. 13. Keyindustry trends: Growing trend towards cost-containment and policies supporting generics across ASEAN Thailand ● Move towards universal coverage ● NLED de-listings in 2008 ● CSMBS budget cuts & restrictions on prescribing & reimbursement ● Hospital audits Vietnam • Strong growing market • Expansion of local health insurance • Emphasis on local generics • Strict price controls • New hospital tender regulations • Conflict of interest between MoH and provincial authorities Positive impact Negative impact Source: IMSCG IP and Analysis; Malaysia • New Pharmacy Bill (January 2013) proposing to grant pharmacists an exclusive right to dispense medicine • 10MP plan to expand primary care sector • “1 Care for 1 Malaysia” aiming for universal coverage • Generic emphasis for public sector • Forerunner in Halal certifications • Government favours locally produced products in both registrations and tenders • Increasing RA standards (BE studies) Singapore • Upgrading primary care sector (4 new hospitals and 12 new polyclinics by 2030 & financial support for GP’s) in order to cater to medial demands of ageing population • Fast tracking of Indian Gx since 2010 Indonesia • Universal Health Coverage by 2014 and beyond • Compulsory prescribing of generics • E-catalogue tendering system since 2013 • Increasing RA hurdles and longer registration timelines • Price or access advantages to companies that manufacture locally Philippines • KP reform aiming for UC by 2016 • Expanded medicines access via Philippines Medicines policy in 2011 • Cheaper medicines act & price cuts in 2009 & 2010 • Maximum drug retail price (2010)
  14. 14. In Asian emerging markets, the sheer size of the task of improving healthcare have expedited the rise in price pressures Source: IMS Market Expertise
  15. 15. However, there is a growing trend towards cost-containment and policies supporting generics across Asia Mandatory price cuts and pricing controls Increasing role of pharmaco- economics/DRG implementation Generic penetration/ generic emphasis Lack of IP protection (e.g. compulsory licensing) Examples of Growth Barriers in APAC China • Promotion of low cost Gx in hospitals • Price controls for all reimbursed drugs Hong Kong • The trend of use in generics in hospital authority switching from EU /ICH sources to China /India sources ASEAN • Increasing emphasis on branded generics • Pressure of price controls Korea • Price cuts in 2012 for off-patent, and Gx • Prescribing controls, DRG implementation Source: IMSCG IP and Analysis; IMS Market Prognosis Forecast Period: 2013-2017; Note: ASEAN includes Indonesia, Philippines, Thailand, Vietnam, Malaysia and Singapore Low High
  16. 16. Generics penetration varies across SEA and has increased overall across countries Expanded SEA Overall Market – Originator vs. Generic Penetration (2011) Source: IMS Analysis, IMS MIDAS Data
  17. 17. Reformand containment, coupled with strong local generics plays, is making SEA an increasingly difficult turf for MNCs Expanded SEA Top 10 MNC* Market Share by Country (2010 vs. 2011) Source: IMS Analysis, IMS MIDAS Data; *TOP-10 MNCs for 2011 comprise Pfizer, Novartis, Merck, Sanofi, AZ, Roche, GSK, J&J, Abbott and Lilly • MNCs have lost market share to generics firms recently, as patent expiries, pricing pressure and increasingly aggressive generics competitors come into play
  18. 18. The strong Asia growth momentumis driven by favorable macro-economic growth, rising healthcare spend and urbanization High-Growth Markets Large, Steady Growth Markets Small, Steady Growth Markets CN ID VN KR TW TH PH MY SG HK Projected pharma market 2017, ($ Bn) 177 9 5 15 6 4 4 2 1 2 Projected 2013- 2017 growth (%) 16% 13% 18% 6% 5% 4% 4% 8% 7% 8% Strong macro- economic growth Increasing per capita HC spend Increasing wealth of middle class Strong population growth Population living in urban centers MacroGrowthDrivers Source: IMS Health Market Prognosis 2013, IMSCG Analysis Low ---- High
  19. 19. Regional Business Risk/Reward Source: Hong Kong BMI Pharmaceuticals and Healthcare Report 1Q 2013 Industry Rewards Country Rewards Rewards Industry Risks Country Risks Risks Pharmaceutical RRR Regional Ranking Japan 80 63 76 80 77 79 77 1 Australia 50 87 59 72 84 77 66.2 2 South Korea 60 67 62 70 69 70 64.9 3 China 67 50 63 67 56 63 62.5 4 Singapore 40 80 50 80 79 80 61.9 5 Taiwan 53 60 55 70 65 68 60.2 6 Hong Kong 47 70 53 67 79 72 60.2 7 Malaysia 50 60 53 70 69 70 59.3 8 India 60 43 56 53 50 52 54.4 9 New Zealand 27 83 41 60 87 71 52.9 10 Vietnam 57 47 54 40 45 42 49.3 11 Indonesia 53 50 53 40 46 42 48.4 12 Thailand 47 47 47 37 58 45 46.1 13 Philippines 43 57 47 43 45 44 45.7 14 Sri Lanka 37 43 38 40 48 43 40.2 15 Pakistan 40 47 42 33 40 36 39.5 16 Bangladesh 37 43 38 40 36 38 38.3 17 Cambodia 33 37 34 30 36 32 33.5 18 Regional average 49 57 51 55 60 57 53.4 BMI´s Risk/Reward Rating (RRR) tool, provides a globally comparative and numerically based assessment of market´s attractiveness. Scores out of 100, with 100 highest (WE: 67, CEE: 52, AM: 51, MEEA: 44) Industry Rewards – Market expenditure, market expenditure per capita, sector value growth Country Rewards – Urban-rural split, pensionable population, population growth Industry Risks – Intellectual property laws, policy/reimbursements, approvals process Country Risks – Economic structure, policy continuity, bureaucracy, legal framework, corruption
  20. 20. The strong Asia growth momentumis driven by favorable macroeconomic growth, rising healthcare spend and urbanization Aggregate macroeconomic snapshot for select countries (2011-2016) Nominal GDP (USD Billion) Pharma Market growth^ IMF 2011-16 Nominal GDP growth 2015 Urban Population Share (%) Pharma Market (USD Billion) 113 417 5,867 279 300 213 284 211 494 346 190 123 662 467 846 1,519 1,116 1,921 1,593 1,646 6,475 7,298 12,020 260 322 161 Healthcare spend per capita(USD) 368 179 2,080 1,438 4,774 4,065 221 1,733Singapore 1.1 0.8 Bangladesh 1.8 1.1 Malaysia 1.9 1.4 Philippines 3.5 2.8 Pakistan 3.8 1.9 Thailand 3.9 3.3 Vietnam 4.2 1.9 Taiwan 5.3 4.4 Indonesia 7.8 4.2 Korea 14.2 12.1 ANZ 16.4 14.5 Japan 127.4 111.9 China 149.2 68.2 20162011 20162011 Source: IMS Market Prognosis 2012, IMSCG Analysis; *APAC includes Japan, Korea, China, India, Australia, New Zealand, Taiwan, Singapore, Malaysia, Thailand, Indonesia, Hong Kong, Philippines, Vietnam, Bangladesh, Pakistan 10% 2% 3% 6% 14% 7% 9% 7% 6% 7% 8% 7% 4% 17% 3% 2% 3% 13% 4% 17% 3% 15% 4% 7% 10% 7% 36% 91% 91% 92% 46% 85% 34% 36% 43% 77% 83% 33% 99%
  21. 21. Key challenges to further growth in emerging markets Source: Strategy & analysis
  22. 22. Please feel free to contact for further information : Shivani Chauhan Direct: +91 9758833730 shivanichauhan232@gmail.com THANK YOU

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