"Powering the Future of Healthcare in Asia Pacific" is a six-part report series produced by Baker & McKenzie in partnership with The Propell Group. The Report, which will be released over the period of six months, considers the impact of technological innovation on healthcare in the region and highlights some of the legal concerns which start-up innovators, and pharmaceutical and medical devices companies may face in this new paradigm of e-Health #healthtechasia

1. PoweringtheFuture
of Healthcare
in Asia Pacific
How technology will change
healthcare delivery

2. The Creative
Destruction
of Healthcare
Chapter
1
Powering the Future
of Healthcare in Asia Pacific
Why have we commissioned
the report?
IN THIS ISSUE
• Moore’s Law
• The Innovator’s
Dilemma
• The Healthcare
Revolution
• Dramatic Changes in
Healthcare: A Tectonic
Shift
• Healthcare’s New
Paradigm
• What are the Legal
Consequences of the
Healthtech Revolution?
NEXT ISSUE
Chapter
2
Data-driven
Healthcare

3. About the Authors
Ben McLaughlin
ben.mclaughlin@bakermckenzie.com
Toby Patten
toby.patten@bakermckenzie.com
Julien de Salaberry
julien@propellgroup.biz
Seck Yee Chung
yeechung.seck@bakermckenzie.com
Ben McLaughlin is the head
of the Baker & McKenzie
Healthcare Group for
Asia Pacific, leading more
than 170 lawyers who focus
on advising clients in the
healthcare industries. Ben is
rated by Chambers Asia Pacific
and Best Lawyers as one of
Australia’s leading lawyers
in mergers and acquisitions
(M&A). With a practice focus
on healthcare M&A, Ben is also
rated as a leading adviser on
corporate governance. He was
a finalist for “Partner of the
Year” at the Lawyers Weekly
2015 Australian Law Awards.
> Read more
Toby is a special counsel in
our healthcare team. Toby
has more than 10 years’
experience in healthcare
regulatory, intellectual
property, privacy and
commercial law. In addition
to his legal experience, Toby
has a bachelor of science in
biochemistry. > Read more
A globally recognised expert on
healthtech, Julien de Salaberry
is the founder and CIO of The
Propell Group, a boutique
venture investor and advisory
firm focused on healthtech
early-stage companies. He has
directed strategy for some of
the world’s leading healthcare
companies, including Eli Lilly,
Boston Scientific and
Merck & Co. He was part of
the team that wrote the book
iDisrupted.
> Read more
Seck Yee Chung is a partner
based in Baker & McKenzie’s
Ho Chi Minh City office
and leads the information
technology and communications,
healthcare, and M&A practices
in Vietnam. He focuses on
investment projects and
M&A deals, and advises on
commercial and regulatory
matters. This includes
foreign direct investment,
market access and licensing,
data use and privacy, over a
diverse range of industries,
such as pharmaceuticals,
medical devices, clinical trials,
cosmetics, and IT and data
services. > Read more

4. Key trends and innovation momentum
drivers in Asia Pacific healthcare
Preface
The delivery of healthcare is poised for a radical change.
The unparalleled ability to collect, mine and analyse health
data, the increasing sophistication of bio-sensors, and the
exponential rise in the use of smart phone devices provides
opportunities for a radical re-think in how to economically
and efficiently provide healthcare solutions for populations
across Asia Pacific. This will affect healthcare systems
providers as well as individuals. Healthcare resources that
have been constructed largely to treat disease will need
to be re-thought, to take advantage of technologies that
monitor to prevent illness and to intervene early.
Countries across the
region in various stages of
development are grappling
with the possibilities of
this healthtech revolution
and the legacy issues of
twentieth-century healthcare
infrastructure for twenty-
first-century healthcare
solutions. In doing so, many
issues are raised about the
use of new technologies in
healthcare that regulators
lag behind in answering. It is
these issues that we seek to
address.
This digital revolution of
medicine will not only
significantly benefit
developed health systems, but will also allow developing
economies to leapfrog over expensive development
stages to establish better, effective health systems. For
Asia Pacific’s developing economies, following the same
evolutionary steps of developed economies is neither
feasible nor required. It will prove too costly, take too
long and lead to falling into the same pitfalls experienced
by developed health systems. Above all, it fails to take
advantage of the technology innovation that is disrupting the
delivery of healthcare.
The provision of modern-day healthcare across Asia Pacific
concerns all stakeholders such as physicians, patients,
hospitals, investors and ministries of health. The region
faces a considerable public health challenge which is
driving healthcare spending growth faster than GDP growth
and will continue to negatively impact productivity. By 2030,
India stands to lose approximately 18 million potentially
productive years of life due to non-communicable disease-
caused deaths.
Asia Pacific healthcare is a paradox of significant unmet
medical needs compounded by an under-invested and
immature health system infrastructure. It has a large
population that mostly pays for its own healthcare and is
experiencing fast-growing power of purchase, driving the
desire for greater choice and access to health services.
In this era of radical technological change and innovation,
the legal and regulatory landscape is undergoing gradual
transformation and harmonisation. The ASEAN Medical
Device Directive is an example of this. The healthcare
industry now faces the issue of “law lag,” as laws are a
number of steps behind technological advances.
We are seeing common themes emerge across Asia Pacific
in legal developments, with a focus on data protection
laws, the regulation and promotion of medical devices,
and the ability to protect, enforce and commercialise
intellectual property. Governments and legislatures are
charged with the challenging task of balancing the need for
effective regulatory compliance with the need to foster and
accelerate innovation and development, as well as to reduce
overall healthcare costs.
The opportunity to power the future of healthcare in Asia
Pacific through technology innovation will transform the
delivery of better healthcare.
In these pages, we illustrate why we believe Asia Pacific
stakeholders have an unprecedented opportunity and we
propose how this could be achieved.

5. The Creative
Destruction
of Healthcare
Chapter
1
Considered one of the most
influential economists of the
twentieth century, Joseph
Schumpeter served as Austria’s
finance minister and became a
professor at Harvard University.
In the mid-twentieth century,
Joseph Schumpeter, the
noted Austrian economist,
popularised the term
“creative destruction” to
denote transformation
that accompanies radical
innovation. Over the past
few years, our lives have
been radically transformed
through digital and technology
innovation. But the most
precious part of our existence—
our health—has thus far been
largely unaffected­­­—insulated,
and almost separated from this
digital revolution. Until now.
Medicine is about to go
through its biggest
shakeup in history.

6. Asia’s developing economies
face a significant and growing
challenge to their ambitions
to build an OECD standard of
healthcare infrastructure and
delivery. Two main challenges
face these economies:
The prohibitive cost
of building such a
healthcare system
The increasing disease
burden ranging from
preventable communicable
diseases to the growing
trend in non-communicable
diseases brought on by
ageing and lifestyles

Asia’s policy makers must
therefore choose between
two options:
The conventional, long,
expensive and unsustainable
road which developed
economies have been
following
Taking full advantage of the
health technology innovations
and new operating models
which are transforming and
will continue to transform
healthcare across the globe
A founding father of Silicon
Valley, Gordon Moore co-founded
chipmaker Intel in 1968.
You can interpret the term
Moore’s Law in two ways. There is
its original meaning, which refers
to the speed at which transistors
on integrated circuits double.
Alternatively, you can use the
term as a metaphor to describe
any form of rapid technological
advancement. In its metaphorical
sense, Moore’s Law is now one
of the most important rules in
business and the economy today.
To borrow words used by
consultancy firm McKinsey:
Moore’s Law
Today, a human genome
can be sequenced in a few hours
and for a few thousand dollars,
a task that took 13 years
and $2.7 billion to accomplish
during the Human Genome Project.
Or to quote Craig Venter—
one of the leading scientists in
the world today—in a lecture he
gave at the BBC in 2007:
The Innovator’s
Dilemma
First published in 1997,
Christensen’s book suggests
that successful companies
can put too much emphasis on
customers’ current needs, and
fail to adopt new technology or
business models that will meet
their unstated or future needs.
He argues that such companies
will eventually fall behind.
Christensen calls the anticipation
of future needs “disruptive
innovation,” and gives examples
such as the personal computer.
Harvard Business School
Professor Clayton Christensen
is the world’s authority on
disruptive innovation and
was named the World’s Most
Influential Business Management
Thinker in 2011 and 2013.
The innovator’s “dilemma” comes
from the idea that organisations
will reject innovations based on
the fact that customers cannot
currently use them, thus allowing
these ideas with great potential
to go to waste.
Asia has a broad spectrum of
health systems and challenges,
with Myanmar at one end after
decades of under investment,
and Japan the opposite end of the
spectrum, with an OECD-standard
health system.
Whatever the level of maturity
of any Asian economy’s health
system, we advocate that all of
Asia’s healthcare stakeholders
need to overcome their
innovator’s dilemma and take full
advantage of the technological
advances that are shaping
the new healthcare paradigm
powered by Moore’s Law.
Over a short period of time
genome projects, which,
10 years ago required
several years to complete,
now take only days.
He suggested that within half a
decade “it will be commonplace
to have your own genome
sequence, something that just
a decade ago required billions
of pounds and was considered a
monumental achievement.” He
said, “Our ability to read genetic
code is changing even faster than
changes predicted by Moore’s
Law.”
Metaphorical Moore’s Law may
yet prove to be even more extreme
in numerous medical disciplines
such as nanotechnology or
synthetic biology.
Two factors enabling
transformation
of healthcare
Factor 1
Factor 2
1
2
1
2
The innovator’s ‘dilemma’
comes from the idea that
organisations will reject innovations
based on the fact that customers
cannot currently use them, thus
allowing these ideas with great
potential to go to waste.

7. Creative
destruction
MOORE’S LAW
1950s 1965
Popularised by Austrian
economist Joseph
Schumpeter, this refers
to the transformation
accompanying radical
innovation.
Intel founder Gordon
Moore’s observation
that computing speeds
double every two years,
an idea that can also be
applied to technology and
economics.

8. INNOVATOR’s DILEMMA THE HEALTHCARE
REVOLUTION
Coined by Harvard
professor Clayton
Christensen, this refers
to companies rejecting
innovations based on
the fact that they cannot
currently be used, with
the ideas ending up going
to waste.
Dramatic changes of
medicine brought about
by mobile connectivity
and bandwidth, Internet,
social networking,
increasing computing
power and data universe,
information systems,
imaging, genomics and
wireless sensors.
1997 2015

9. The
Healthcare
Revolution
We are set to see a truly radical
change. Healthcare will focus on
prevention. Up to now, healthcare
has always concentrated on
diseases. We only tend to receive
medical attention if we are ill and
usually rely on symptoms to drive
us to seek a qualified medical
opinion. Technology will be used
to prevent us from becoming
sick. It will enhance us all in
ways that were once thought
to be the exclusive domain of
science fiction.
mobile connectivity
and bandwidth
social networkingInternet increasing computing
power and the data
universe
genomics wireless sensorsinformation systems imaging
Dramatic changes
in healthcare—a tectonic shift
Technologies that will create this
transformation include wearable
technology, genome sequencing,
collection, mining and analysis
of big data, 3-D printing,
nanotechnology, regenerative
medicine, bionic technologies,
and exoskeleton technology, to
name but a few. We will, however,
only consider the most relevant
to Asia Pacific in this report.
Nowadays, diseases that kill us
are rarely epidemics as medicine
has been very good at solving
these; instead, each one of us is
at risk of diseases of lifestyle,
e.g.,Type 2 diabetes (T2D). If
we could only make better
decisions about our lifestyle, we
could eliminate a substantial
number of deaths from modern
conditions. This is even more
applicable in an era where good
and comprehensive information is
available.
Technology is set to enable us to
make these decisions. It will also
enable us to enjoy better, more
customised care and live longer
in the future.
The creative destruction of
healthcare is being driven by
the convergence of the following
factors:

10. Healthcare, which has to date
been exclusively disease centric,
is now becoming prevention
centric or outcomes driven. In
other words, a health system,
which has so far been entirely
focused and geared to curing
or managing a disease, will
transform into one focused
on prevention of disease. This
type of health system is gaining
increasing traction here in Asia
Pacific with economies such
as Australia, Korea and Taiwan
following the lead of economies
such as the UK, Canada and
Japan where health outcomes,
daily average treatment costs
and cost per QALY (qualified
adjusted life years, which is a
generic measure of disease
burden, including both the quality
and quantity of life lived, and
used to assess the value for
money of a medical intervention)
are being assessed as part of the
holistic healthcare consideration.
These advances can be
categorised into three categories
as follows:
One additional non-data-driven
technology innovation which will
have a positive impact on the
delivery of healthcare in Asia is
3-D printing. We will consider its
impact in a later chapter.
DaTa
Shared
Information
Cloud
DevIces
BIO-seNsORs
The variety, veracity,
velocity and volume
of health data that
is being collated and
analysed to define
actionable insights
The ability of the
computing power
and software on
devices to address
both consumer and
medical needs
The ability to monitor
our bodies and
continuously gather
data about human
biology suggests new
possibilities for both
biomedical research
and clinical practice
Healthcare’s
New Paradigm
In this era of the creative
destruction of medicine, we
are also seeing a gradual
transformation of the legal
landscape in response to radical
innovation in medical and
health technology. Traditionally,
the relationship between
technology and the law has been
underscored by the notion of “law
lag,” meaning that legal cultures
are generally a number of steps
behind technological advances.
This is no different for healthcare,
and is particularly relevant to
big data. The ever-increasing
methods of collecting data,
from mobile phone applications
to biosensing wearables to
telemedicine, will challenge the
traditional concepts of “personal
information,” “consent” and
“medical devices.”
Balancing the desire to
unlock potential against the
requirements for regulatory
compliance is another component
of the Innovator’s Dilemma.
Privacy laws regulate how
organisations collect, store,
use and potentially disclose
“personal information” identifying
individuals. Organisations
must ensure that they comply
with these laws, as the legal
consequences of non-compliance
can be substantial, not to mention
the risk of damage to reputation
in the case of a serious data
breach.
In some cases, the regulatory
compliance regime may restrict
or even prevent innovators from
pursuing new ideas, concepts or
technologies. In the alternative,
it is argued that if individuals
do not trust the effectiveness of
data protection laws, they will
be less likely to engage in digital
healthcare, which could threaten
the highly beneficial applications
of technological advances.
Legal regulation must address
these concerns by adopting
appropriate measures
to protect privacy.
We will introduce our readers
to key regulatory compliance
matters, from data protection
laws to the regulation and
promotion of medical devices.
Moreover, we will consider how
companies can add value to
their assets and businesses
by understanding and utilising
intellectual property rights
protection.
What are the Legal Consequences
of the Healthtech Revolution?
Promoting innovation should be
a central objective of data regulation,
yet the unprecedented ability to
collect, analyse and store vast
amounts of data raises new concerns
about individual privacy rights.
The traditional barriers, created
by the lack of inter-operability
(people, process, information)
between stakeholders, are being
dramatically removed or lowered
by advances in technology.
Ben McLaughlin on key implications of
healthtech for healthcare stakeholders

11. Baker & McKenzie’s Asia Pacific Healthcare Group
has advised global pharmaceutical, life sciences and
medical devices companies for more than 50 years.
The Firm ranked Band 1 in the Chambers Asia Pacific
Life Sciences rankings for two consecutive years
(2014-2015). In Asia Pacific, Baker & McKenzie has
more than 150 lawyers, more than 20 of whom have
healthcare and medical-related qualifications, as well
as a number of non-lawyer medical practitioners who
hold doctorate degrees in fields such as biotechnology,
pharmacology, nursing and bioethics. Our team has
a thorough appreciation of issues facing our clients,
from compliance pressures and complex pricing and
reimbursement difficulties, to red-flag issues such as
anti-corruption.
As a trusted advisor to the world’s largest healthcare
companies, the Baker & McKenzie Asia Pacific
Healthcare Group offers cutting-edge value-added
services to help clients stay abreast of key industry
trends.
These products include
• Webinars
• Client seminars
• Publications such as From Pills to Tablets and
Investing in the Healthcare Industry
• Mobile apps such as the MapApp, which won
the Innovative Use of Technology Award at the
FT Innovative Lawyers Asia Pacific Awards 2015
(download it on the App Store)
• Thought leadership reports (example: Powering the
Future of Healthcare in Asia Pacific)
Ben McLaughlin
Head, Asia Pacific Healthcare Group
ben.mclaughlin@bakermckenzie.com
About the Asia Pacific
Healthcare Group
Ben McLaughlin talks about
Baker & McKenzie’s strengths
and value-added client services

12. Next Issue:
Data-driven
Healthcare
Chapter
2