South-East Asia: The New Emerging Healthcare Market Challenge
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Transcript of South-East Asia: The New Emerging Healthcare Market Challenge
an Economist Intelligence Unit business Healthcare
A report by The Economist Intelligence Unit
Summary South-East Asia The New Emerging Healthcare Market Challenge
South-East Asia: The New Emerging Healthcare Market Challenge
© The Economist Intelligence Unit Limited 2016 1
Foreword 2
Executive Summary 3
The New Emerging Healthcare Market Challenge 4
About Clearstate 5
Contents
South-East Asia: The New Emerging Healthcare Market Challenge
© The Economist Intelligence Unit Limited 20162
Seated in South-East Asia are emerging countries that will experience faster rates of healthcare spending growth over the next five years than those in BRIC economies. Emerging healthcare
markets in Indonesia, Philippines and Vietnam are changing rapidly, as healthcare systems in these markets expand their capabilities to deliver healthcare to large populations of undiagnosed and untreated patients.
To capture opportunities found deep within emerging markets and its cities, a nuanced understanding of the region – the complex matrix of healthcare systems, government policies, epidemiological and socio-economic factors interacting and shaping the decisions of healthcare professionals and patients delivering and using drugs and medical devices, is critical. Government drives for universal health insurance coverage and healthcare infrastructure improvements will create volume growth opportunities in the value segment for medtech companies. Meanwhile, the region’s aging population and burgeoning middle-class, affluent income groups are widening divergences between markets providing essential healthcare and higher-tiered private healthcare markets delivering better and more innovative healthcare. Consequently, attractive entry points line the demand spectrum from the lower-end value segment and high-end healthcare services.
What is next? For companies wanting to capture opportunities from these forward-looking trends, finding a focus within geographies and market segments to tailor mid and long-term strategies will help unlock the full potential of these markets.
Ivy TehGlobal Managing Director, EIU Healthcare ConsultingManaging Director, [email protected]
Foreword
South-East Asia: The New Emerging Healthcare Market Challenge
© The Economist Intelligence Unit Limited 2016 3
Catalysed by demographic changes and health reforms, South-East Asia’s large under-served populations will unleash enormous health care demand into the market, and present
pharmaceutical and medtech companies with the opportunity to realise top-line growth driven by 5 mega-trends in the coming years.
Expanding universal healthcare coverageAs the proportion of out-of-pocket healthcare spending is set to fall with expanding state healthcare coverage, understanding how payers define value will be important so companies can tailor products to meet the demands of cost-conscious payers.
The changing face of South-East Asia’s patients As a new epidemiological and demographic landscape emerges, companies must understand how patients in the region choose to prioritize health care spending and the type of services they seek.
Private healthcare infrastructure: Bridging the gap Private health is expanding to secondary cities where incomes have risen faster than healthcare provision. Competition for regional and international patients are shaping healthcare niches in each country.
Digital healthcare: Enabling alternative healthcare delivery models Wider use of technology in healthcare will enable alternative healthcare delivery models in South-East Asia. For developing healthcare markets, technology will improve access to healthcare. For developed healthcare markets, technology will offer more choices in the diagnosis, treatment and management of personalized health.
Reshaping South-East Asia healthcare business environment Intensifying international and regional economic integration initiatives in South-East Asia will improve local market access conditions that will enable foreign healthcare companies to compete more successfully for a share of the growing market.
Executive Summary
South-East Asia: The New Emerging Healthcare Market Challenge
© The Economist Intelligence Unit Limited 20164
Altering landscapes in South-East Asia will unleash enormous healthcare demand from 9% of the world’s population living in the region. An environmental scan reveals the biggest
opportunities for healthcare companies now lie in Indonesia, Philippines and Vietnam.
As BRIC healthcare markets slow, South-East Asia is surfacing as an attractive region. The Economist Intelligence Unit anticipates compound annual growth rate of healthcare expenditure in Indonesia and Philippines from 2016-20 – at 10.6% and 10.8%, which will exceed growth in the BRIC countries. In the BRIC group, growth rates ranging 4.12% to 10.3% for each country are forecasted for the same period. The numbers reflect rising and changing healthcare demands that are receiving increasing attention from government payers and local healthcare consumers. At the same time, accelerating health and regulatory reforms in the region promise better healthcare access for 630 million people across the ten countries in South-East Asia. To reach this market however, a range of challenges common to emerging healthcare demands need to be addressed – deciphering government health policies that impact pricing and reimbursements, sustaining profits on local levels of affordability and delivering products in underdeveloped healthcare systems.
Tapping into South-East Asia’s healthcare market requires understanding the vast economic, sociodemographic and political differences in the ten countries that make up this region – from first world Singapore to third world Myanmar to identify the best growth opportunities for businesses.
The new emerging healthcare market challenge
Emerging High Growth Developed
GDP
per c
apit
a
Healthcaredevelopment
• Low GDP• Poor healthcare infrastructure
• Key healthcare concerns - Basic public heath
• High GDP growth• Moderate and fast growing healthcare infrastructure
• Key healthcare concerns - Capabilities and infrastructure
• High GDP • Well developed and mature healthcare infrastructure
• Key healthcare concerns - Cost effectiveness and outcomes
77 mil population
450 mil
98 mil6 mil
Brunei
Cambodia
Indonesia
Laos
Malaysia
BN
KH
ID
LA
MY
Myanmar
Philippines
Singapore
Thailand
Vietnam
MN
PH
SG
TH
VN
Key
Source: Clearstate analysis
Figure 1: Analysis of major country groups in South-East Asia’s healthcare
LAKH
MM
TH
MYBN SG
VN
PH
ID
South-East Asia: The New Emerging Healthcare Market Challenge
© The Economist Intelligence Unit Limited 2016 5
Clearstate, a business of the Economist Intelligence Unit, is a research consultancy specialising in the domains of healthcare and life sciences, advising on growth strategies in emerging economies.
Clearstate is the go-to research and consulting partner for clients seeking greenfield growth opportunities in fast-expanding emerging economies. By leveraging The Economist Intelligence Unit’s depth of country expertise, we offer visibility and credible forecasts on the direction of opaque healthcare environments in emerging economies as well as realistic forecasts of market growth.
We have a strong reputation among our clients for the depth of our industry knowledge, our collaborative approach and our innovative solutioning. We are recognised for consistently listening and working in partnership with our clients to deliver comprehensive and granular answers beyond the obvious.
About the authorsShaoming Chen, Associate, Asia [email protected]
Chee Hew, Senior Principal, Asia [email protected]
Melissa Lim, Manager, Thought Leadership [email protected]
About Clearstate
Download the full report at:http://clearstate.com/thought-leadership/south-east-asia-the-new-emerging-healthcare-market-challenge.html
Cover image - © OPgrapher/Shutterstock
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an Economist Intelligence Unit business Healthcare
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