Frost & Sullivan: Healthcare Services, Aged Care Technologies and Screening & Diagnostics Key Growth areas in 2017 for Asia Pacific

Need for efficiency in healthcare service delivery to drive innovation in terms of site-of-care delivery, treatment pathways and payment models

Singapore, 22 February 2017– Despite global political uncertainties and a sluggish economic outlook, 2017 will be amped-up for the global healthcare industry that promises partial realization of major health policies and initiatives. This will in turn drive growth in the Asia Pacific healthcare industry, which is expected to see increased spending on healthcare across all countries, albeit at varying levels.

Increasing acceptance of concepts such as value-based care, personalization and preventative healthcare is creating demand amongst consumers and healthcare providers for new technologies and innovative care delivery platforms while pressurizing industry participants in pharmaceutical and medical technology companies, as well as healthcare service providers to reinvent their business models.

The Asia Pacific Healthcare market (consisting of pharmaceuticals, medical devices and healthcare technology) will represent close to 30% of global revenues in 2017, and is still one of the fastest growing regions globally with a growth rate of 8% projected for 2017 (in comparison, the global projected growth rate is 4.8%). Frost & Sullivan projects the Asia Pacific healthcare market to grow to US$510.7 billion in 2017, up from US$472.5 billion in 2016.

Globally, the ageing population and rising incidence of chronic diseases continue to burden the healthcare system with potentially unsustainable rise in healthcare spending. Japan, Korea, Australia and Singapore are the fastest aging nations in Asia. It is projected that by 2030, one in five residents in Singapore will be over 65 years of age and close to two thirds of the elderly are projected to have at least one chronic disease.

“With overcrowding and increasing treatment cost in hospitals, chronic disease care will move toward community and home, leading to opportunities for tele-health, remote patient monitoring and mhealth,” noted Rhenu Bhuller, Partner, Frost & Sullivan.

“Additionally, site of care will transition from tertiary and secondary care towards home healthcare where possible through the implementation of remote care delivery models in countries like Australia and Singapore,” she added.

On the industry side, public and political pressure to control surging drug prices in the US will compel health authorities to introduce transparency measures around drugs pricing, especially for some of the expensive diabetes and cholesterol medicines where more low-cost generic competition is gaining market acceptance.

It is expected that the pricing environment in the Asia Pacific will become more dynamic as governments seek to introduce more measures to control spending while meeting the demand for specialty and high-value pharmaceuticals. This would ultimately drive the generics and biosimilar market in Asia Pacific as payers implement measures to drive substitution of more expensive products.

Innovation also is on the rise in Asia with a number of biotech start-ups and research institutions in China moving the application of CRISPR/Cas9 genome editing technique into human safety clinical trials for treating various cancers. Areas of increasing investment and collaboration will be in immune-oncology and regenerative therapy where countries like Japan are taking the lead in nurturing innovative R&D models around regenerative medicine.

M&A activity will continue driven by diagnostics and technology deals. Industry convergence and technological innovations will mean more non-healthcare players entering health care. As the Healthcare industry transitions toward a digitally led care delivery model, the industry will need next-gen workforce with new skill-sets such as big data and predictive analytics, AI and robotics professionals.

Other key developments forecast for the industry in Asia include:

• Prices of Private Health Insurance (PHI) premiums to increase as medical costs rise. In some countries, PHI premiums could rise as much as 20% (e.g., Malaysia, Singapore).
• Failure to pass the Trans-Pacific Partnership in 2017 will curtail the incentive for authorities to reform their regulatory process.
• Medical tourism volumes will see slow growth of 5% due to economic pressure; however, China presents a new source of patients.
• The trend of private-public partnerships or use of public health insurance in private hospitals to share patient load and maximize use of available resources in Southeast Asia (SEA) will increase. This could lead to 1/4 of private hospital patients in SEA linked to the public sector.
• Rollout of universal healthcare in SEA is under considerable strain. Efforts will be made towards more aggressive health-financing reforms across all major countries to balance public, private and out-of-pocket payments.

Frost & Sullivan’s Transformational Health 360° Research helps you to better understand buyer-seller dynamics as the healthcare system transitions to digital information, the pace at which new and innovative medical devices and systems are being adopted and getting embedded into the typical clinical pathway, both in mature and emerging markets, and enables you to bring clarity to pharmaceutical/biotechnology, in-vitro diagnostics and life science research tools market decisions and implementation tactics.