Healthy growth expected for medical devices

Also, download this story from the electronic issue here

Asia Pacific region accounts for half of the world’s population. In recent times, there has been an increasing need for better access to modern medical technology in tandem with the growing demand for healthcare due to demographic shifts in income, population, disease burdens, and general awareness of health issues.

The global medical devices market is poised to reach US$398 billion next year and is expected to rack up further through 2023, UK-based business information provider Visiongain forecasts in its Medical Devices Industry and Market Prospects 2013-2023 report. The growth will be driven by the introduction of innovative devices onto the market and also by the demand generated by illnesses associated with the ageing global population, it says.

This is echoed by Espicom, a Londonheadquartered research firm, that analysed in its Worldwide Medical Market Forecasts to 2018. It says that by 2018, the global medical device, technology and equipment market is forecast to be worth over US$440.5 billion.

Medical devices growth in Asia

Meanwhile, in the Asia Pacific region, medical and healthcare are given priorities in the respective national agendas. Moreover, there has been an outpouring of private investments in the medical and healthcare sectors, particularly in the privatisation of public hospitals and acquisition of private hospitals. Supported by topical findings from the US consultancy McKinsey & Company’s MedTech in Asia: Committing at scale to raise standards of care for patients report, the region’s market is expected to reach US$133 billion a year in 2020, from US$88 billion a year in 2015 at 8% CAGR. By the then, Asia Pacific would have outpaced the European Union as the world’s second largest medical technology market, after the US.

The prevalent demand for medical technology in Asia Pacific is in proportion to the region’s growing silver population which will top 857 million come 2050.

In Deloitte’s 2016 Global Life Sciences Outlook: Regional & Country Perspectives report, it finds that the roll-out of public health care programmes in the 3.7-billion population region, combined with increasing private wealth, is expected to boost healthcare spending by an annual average of 6.6% from 2015 to 2019.

It says that India will demonstrate the strongest growth at more than 16% per year, given that the Indian government has focused on raising public health expenditure from 1.2% to 2.5% of the country’s GDP within five years. China’s spending growth is approximated at 8.8% annually within the report period.

India to set up medical park

India has a growing healthcare expenditure estimated at nearly US$69 billion in 2015, according to data from India Brand Equity Foundation (IBEF). The industry itself is large and continues to expand. By 2017, IBEF says that the industry size is expected to reach US$160 billion and by 2020, some US$280 billion. Then again, India, the world’s generic drugs capital, is seeking the means to minimise healthcare costs.

Thus, a medical devices park, which has recently gotten funding approval from state officials, will soon be established at Visakhapatnam, Andhra Pradesh.

Projected to be Asia's first medical devices park, the Andhra Med Tech Zone (AMTZ) will house high investment scientific facilities to help medical device makers reduce manufacturing costs by as much as 50%. It will also be equipped with state-of-the-art common facilities such as specialised laboratories, warehousing, testing centre and independent manufacturing units.

AMTZ aims to be the hub of high-end medical equipment production and healthcare products that are affordable.

Focus on healthcare

For Southeast Asia, focus on universal healthcare systems is ramping up demand for health services and medical devices.

Deloitte’s report notes the ongoing market trend in the region is consumer engagement, which it says could curb costs yet improve care delivery. Innovation is also augmenting traditional care management approaches, and through this the region can benefit from the emergence of new, patient-centric, collaborative business models, wellness and lifestyle-themed health services, tele-health initiatives, subscription care models and more, the report says.

The region has a growing population and access to affordable yet quality healthcare and medical products and services are becoming more vital.

Frost & Sullivan, in its Asia Pacific Healthcare Outlook 2014 report, cites that per capita healthcare spending is expected to increase 4.8% or US$2.2 trillion across the region by 2018, from US$1.24 trillion from 2012, at a CAGR of 10.5%. This trillion dollar opportunity provides the avenue for the medical technology market to expand its market value.

Though despite the rise in healthcare spending, lowering healthcare costs remain a tall order in the region.

Thailand, a front-runner medical tourism destination in Asia, is also a suitable hub for medical device manufacturing. The country’s healthcare expenditures are expected to grow 8.4% a year through 2020 to US$25 billion, according Frost & Sullivan.

The country’s medical device market is also expected to continue to expand in the coming years. UK-based BMI Research forecasts that the market will expand by a CAGR of 11.8%; rising from US$1,070.5 million in 2014 to US$1,869.5 million in 2019. By product area, the research firm says that growth is expected to range from 17.3% for diagnostic imaging to 5.4% for patient aids equipment.

According to Preecha Bhandtivej, Thai Medical Device Technology Industry Association (Thaimed) President, the country is conducive for medical devices manufacturing, given its world-class facilities. On the other hand, Thailand still imports most of the highly sophisticated devices it needs.

Production of high-tech products is still minimal and the vast majority of manufacturers produce basic products, such as bandages, sutures, syringes, examination gloves, and others.

Nevertheless, the country has the potential to evolve as a manufacturing hub for advanced healthcare goods. Thus, companies are maxing this potential. An example is Taiwanese manufacturer Apex Medical that is making Thailand its base for its CLMV (Cambodia, Laos, Myanmar and Vietnam) and North Asia operations over the next three to five years.

Apex Medical has already set up a joint venture in Thailand with local distributor Samaphan International. It commenced operations as Apex's Thailand subsidiary early this year.