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“We Accelerate Growth”1
Asia Pacific Healthcare Outlook
2012-2015
What comes next….
Reenita Das
SVP Healthcare and Life Sciences
2
What’s Trending for 2012…2015
China will be the largest pharmaceutical and medical devices market in APAC.
Half of the growth in healthcare will come from the “E7”.
Mobile Health to become the biggest business model disruptor creating access for healthcare delivery on a mass basis especially in emerging economies.
Healthcare expenditure in APAC will increase by 75%.
Advanced medical technologies will be defined by "lower cost scaled down technology“, reverse innovation will help leapfrog cost barriers.
Surprisingly India is expected to lag behind in all healthcare segments except in Pharmaceuticals.
Competition between Asian diagnostics companies and MNCs will spur innovation.
Gen Y is going to break down some of the organizational sclerosis that is
clogging up our healthcare system.
Health enhancements set to become one of the top 10 market places in healthcare.
Higher proliferation of non - healthcare companies entering healthcare.
3
2011 2015
Global Reflections from 2011 and the way forward…
Healthcare
Evolves to
Become a
Service Industry
“you’re
sick…we’re
quick”
The flood gate
of Health
Marts:
Mckesson
leads the way
to consumerize
healthcare
Healthcare becomes
data driven and
customized. More
focus on cost
versus outcomes
More “generics”
– technologies
providing same
value at lower
price, stripped
down feature
sets
R & D spend is
$ 1.15 trillion up
despite economic
recession
Gold Rush to
Emerging Markets:
Indonesia, Russia,
Mexico, Brazil, India
, Turkey and China
– comprising 1/5th
of the worldwide
health care sales
Silicon Valley
and the Hi-Tech
industry gets
involved in
healthcare
Diagnostics and
Monitoring will
become the
golden goose
Home
healthcare and
care givers
dominate the
agenda
Patients will be
Kings and
Queens of the
healthcare
system
The big Tidal
Wave:
Performance
based
Insurance
policies
1 billion
seniors by
2020 and 2
billion by
2050
4
2011 2015
APAC
Healthcare
market sales
will account for
29% in 2011
Growth of mHealth
will facilitate
penetration of
healthcare services
Emergence of New
markets:
Vietnam, Indo
nesia, Laos, an
d Myanmar in
development of
healthcare
infrastructure
Over half of the middle class
will be from the APAC region
by 2020. Gen Y to drive how
healthcare is delivered
Increase of
green
technology in
manufacturing,
logistics and
healthcare
delivery
Most countries
in APAC would
have
implemented
EMR platforms
APAC
Healthcare
market sales
comprises 35%
in 2015
The Asian perspective…
Mobile phone users will rise from 2.2 billion in 2011
to 3.4 billion in 2015
Asian
hospitals
evolve to
become
global brands
Traditional
medicine and
supplements
gaining market
strength and
recognition
Multiple
partnerships
between
NGOs, private
and
government for
Asian disease
based R&D
5
China and Japan Steal the Show by 2015
Taiwan/Indonesia catching up in Tier 2 countries
India is disappointing despite the hype…
TIER 2
1 Taiwan Taiwan Taiwan Indonesia Hong Kong
2 Indonesia Malaysia Malaysia Malaysia Singapore
3 Thailand Thailand Philippines Thailand Malaysia
4 Philippines Indonesia Indonesia Hong Kong Philippines
5 Vietnam Philippines Thailand Vietnam Indonesia
TIER 1 Pharmaceuticals
& Biotechnology
Medical
Devices
Medical
ImagingDiagnostics Healthcare IT
Total Market
Size (2015)$ 389.4 bil $ 140.0 bil $ 13.4 bil $ 11.0 bil $ 8.2 bil
1 China China Japan Japan Japan
2 Japan Japan China China Australia
3 India Australia South Korea India Taiwan
4 South Korea South Korea Australia Australia China
5 Australia India India South Korea South Korea
6
• Per capita healthcare expenditure is far
below global average (lowest is Vietnam and
Indonesia).
• Shortage of healthcare professionals. Health
care workers in APAC is 6.8 per 1,000
population, compared to 18.9 in Europe and
24.8 in the Americas in 2010.
• Access to healthcare and distribution limited
in emerging markets.
Market Restraints
• By 2020, Chronic disease deaths in APAC
will grow at 20%.
• 15% of the 37 million deaths worldwide is
related to Pandemic and epidemic
diseases, 1/3 of such was from APAC.
• Private expenditures is increasing in China
and India, private spending accounted for
49.9% and 67.2% respectively in 2009.
Market Drivers
APAC Share
Global vs. APAC: The New FrontierIn 2011, APAC is estimated to be 28.5% of global market
28.5 % 34.6%
Global & APAC Healthcare Revenues US$ Bn, 2011-2015
• By 2015, APAC could represent 34.6% of global market
356.5 396.4 440.1 491.7 562.1
895.6928.8
978.11017.5
1060.7
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
1400.0
1600.0
1800.0
2011 2012 2013 2014 2015
APAC($ Billion)
Rest of the World($ Billion)
CAGR
12.1%
CAGR
4.3%
7
252.1 278.4 309.4 346.1 389.4
636.0649.0
677.6707.4
738.5
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
2011 2012 2013 2014 2015
APAC($ Billion)
Rest of the World($ Billion)
Pharmaceuticals & Biotechnology, US$ Bn, 2011-2015
Market Drivers
• Increased long term use of multiple and
specialized drugs for the aging population.
• Enhanced health awareness and purchasing
power boosting over-the-counter purchase.
• Government support for generics/bio-
similars.
• Increased disease incidence boosted by
availability and usage of new diagnostic
tools.
Market Restraints
• Patent expiry of major pharmaceutical
products.
• Cost control measures by various
governments.
• In markets with strong local
manufacturing, government tenders favor
local manufacturers.
Pharma market will grow at almost triple the rate compared with the rest of the
world, accounting for 1/3rd of total by 2015
CAGR
11.5%
CAGR
3.8%
28.4% 34.5%APAC Market Share
8
• Technology based pricing approval remains a
hurdle.
• Public hospitals practice- lowest price
bidding, leads to price war.
• Inadequate training or certification for allied
healthcare staff.
Market Restraints
• By 2015, Cardiology market is expected to
reach $18 billion.
• Surgical procedures are growing at 12.0 %.
• Japan and South Korea lead MIS in
APAC, demand for MIS increasing in
Singapore, Malaysia, Australia and
Thailand, driving devices market.
• Local Asian companies of Japan, China, Korea
and Taiwan offering cost effective products.
Market Drivers
82.8 94.1 104.1 116.2140.0
170.92185.07
200.10201.19
208.69
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
2011 2012 2013 2014 2015APAC($ Billion)
Rest of the World($ Billion)
APAC Medical DevicesLocal Asian companies spur growth through low cost products
Medical Devices Revenues, US$ Bn, 2011-2015
CAGR
14.0%
CAGR
5.1%
26.3 36.6APAC Market Share
9
• APAC Refurbished market for imaging
equipments is expected to reach 9% growth
by 2015.
• System interoperability hinders new systems
adoption in hospitals.
Market Restraints
• Increased demand for health screening.
• Reverse innovation of customized Asian
medical imaging products to cater for
different culture and population.
• R & D in medical imaging allows
technological advancement - Molecular
Imaging, Drug therapy combined with
Ultrasound.
Market Drivers
Medical Imaging
China is expected to own 30% of APAC market by 2015…
Medical Imaging Revenues, US$ Bn, 2011-2015
26.7 32.0APAC Market Share
8.8 9.8 11.0 12.2 13.4
24.0425.00
26.1927.54
28.49
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
2011 2012 2013 2014 2015
APAC($ Billion)
Rest of the World($ Billion)
CAGR
11.2%
CAGR
4.3%
10
Diagnostics Revenues, US$ Bn, 2011-2015
Market Drivers
• Government efforts to standardize testing by
regulating diagnostic testing and instruments.
• MNCs setting up marketing and
manufacturing bases in APAC and providing
competition to local diagnostic companies.
• Greater acceptance of technology by
physicians and growing awareness of middle
class patients.
• The molecular diagnostics market is growing
by 42% in India and 22.7% in China.
Market Restraints
• Limited government budget for diagnostics.
• Lack of awareness about healthcare
insurance coverage for clinical tests.
• Highly price sensitive market.
• Lack of awareness and accessibility of
diagnostic testing in rural areas.
Japan will continue to lead the APAC market with more than 40% market share
CAGR
11.44%
CAGR
5.98%
14.5 17.2APAC Market Share
11
• System interoperability hinders market
growth.
• Too many small vendors offering HIT
solutions.
Market Restraints
• Quality, regulatory and performance
application growing at 11.0% CAGR.
• Patient and Revenue cycle management
related application will drive HIT with 10.3%
CAGR.
• Departmental Systems market size is
expected to be $ 875 million in 2011, growing
at 7.1%.
Market Drivers
APAC HIT growing at global pace of 9.0%. Will APAC jump the curve?
Healthcare IT Revenues, US$ Bn, 2011-2015
20.2 20.5APAC Market Share
5.7 6.2 6.8 7.5 8.2
22.5025.29
27.0131.00
31.96
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
2011 2012 2013 2014 2015
APAC($ Billion)
Rest of the World($ Billion)
CAGR
9.7%
CAGR
9.2%
12
Where to place your bets in APAC: 2012- 2015
Time
Gro
wth
Molecular
Diagnostics
Silver Industry
Equipment
(home care)
Mobile
Healthcare
Biosimilars
Vaccines
MIS
EMR/
EHR
Traditional
pharmaceuticals
INNOVATION
TRIGGERSUPER
GROWTHNORMALISATION LEADERSHIP
IndiaChina
S.Korea
SingaporeMalaysia Vietnam
Source: Frost & Sullivan.
Hospital
Services
Digital
Imaging
Taiwan
Telemedicine
Australia
Japan
Robotic surgery
Preventive healthcare &
Wellness monitoring
Philippines
Indonesia
Thailand
13
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For Additional Information
Donna Jeremiah
Corporate Communications
Asia Pacific
+603 6204 5832
Carrie Low
Corporate Communications
Asia Pacific
+603 6204 5910
Reenita Das
Senior Vice President
Healthcare and Life Sciences
Jessie Loh
Corporate Communications
Asia Pacific
+65 6890 0942
