Asia Pacific Healthcare Outlook 2012- 2015

What comes next….

Rhenu BhullerVice President, HC

• 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

2011 2012 2013 2014 20150.0

200.0

400.0

600.0

800.0

1000.0

1200.0

1400.0

1600.0

1800.0

356.5 396.4 440.1 491.7 562.1

895.6928.8

978.11017.5

1060.7

APAC($ Billion)

Rest of the World($ Billion)

CAGR12.1%CAGR12.1%

CAGR4.3%

CAGR4.3%

2011 2012 2013 2014 20150.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

252.1 278.4 309.4 346.1 389.4

636.0 649.0677.6

707.4738.5

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

CAGR11.5%CAGR11.5%

CAGR3.8%

CAGR3.8%

28.4% 34.5%APAC Market Share

• 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

2011 2012 2013 2014 20150.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

82.8 94.1 104.1 116.2140.0

170.92185.07

200.10201.19

208.69

APAC($ Billion)

Rest of the World($ Billion)

APAC Medical DevicesLocal Asian companies spur growth through low cost products

Medical Devices Revenues, US$ Bn, 2011-2015

CAGR14.0%CAGR14.0%

CAGR5.1%

CAGR5.1%

26.3 36.6APAC Market Share

• 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 ImagingA technological challenge, new vs refurbished …

Medical Imaging Revenues, US$ Bn, 2011-2015

26.7 32.0APAC Market Share

2011 2012 2013 2014 20150.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

8.8 9.8 11.0 12.2 13.4

24.0425.00

26.1927.54

28.49

APAC($ Billion)

Rest of the World($ Billion)

CAGR11.2%CAGR11.2%

CAGR4.3%

CAGR4.3%

• 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

Healthcare Information TechnologyAPAC HIT growing at global pace of 9.0%

Healthcare IT Revenues, US$ Bn, 2011-2015

20.2 20.5APAC Market Share

2011 2012 2013 2014 20150.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

5.7 6.2 6.8 7.5 8.2

22.5025.29

27.0131.00 31.96

APAC($ Billion)

Rest of the World($ Billion)

CAGR9.7%

CAGR9.7%

CAGR9.2%

CAGR9.2%

Healthcare Delivery Market:Rising middle income, medical tourism create impact

2011 2012 2013 2014 2015 -

50

100

150

200

250

300

350

400

450

500

309334

362

390

420

CAGR 8.0%

APAC Healthcare Delivery Market Size US$ Bn, 2011-2015

Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan

Market Drivers

• Aging & growing

Population

• Rise in chronic disease

• Medical Tourism

• Rising middle and

affluent income

population

• Manpower shortage

• Access disparity between

urban & rural regions

• Inability to meet demand of

healthcare services in smaller

cities and rural areas

Market Restraints

• International accreditations (e.g. JCI) likely to become the prerequisite for hospitals targeting to participate in medical tourism. Stringent operational and stringent accreditation requirements likely to escalate the clinical and operational quality standards, thus increasing market competitiveness

Healthcare Delivery 2015…

Delivery of health at home

Consolidation of retail healthcare service model

Integration of primary and secondary healthcare facilities. Establishment of electronic medical records integrating

primary and secondary healthcareSatellite based hospital model using advanced medical technologies for

increasing accessibility in rural areas

Healthcare as a service industry

Influx of non-traditional healthcare institutions investments

New models of Holistic healthcare hubs integrating tertiary care, wellness, aged

care and clinical R&D

Increasing funding opportunity for medical tourism through expanded

international medical insurance

Differentiation of hospital models through specialty or holistic health

platforms

The Future of Healthcare . . . .Linking Stakeholders From Different Industries

Community

Education Hospitality

Healthcare

Corporate Wellness

Medical SpaPreventive WellnessMedical WellnessCosmetic SurgeryNutritionalAlternative

SpaFitnessBeautyNutritional

Assisted LifestyleRetirement HomesHealthy VillagesWellness Villages

Primary

Courses

Secondary

Tertiary

Supportive Industries

Where to place your bets: 2012- 2015

Time

Gro

wth

Healthcare manpower

Mobile Healthcare

Hospital services

OTC, Traditional pharmaceuticals, branded generics

INNOVATIONTRIGGER

SUPERGROWTH

LEADERSHIP

IndiaChina

S.Korea

SingaporeMalaysia Vietnam

Source: Frost & Sullivan.

Medical devices, biotech

Digital Imaging

Taiwan

Distribution, manufacturing

Australia

Japan

Monitoring and diagnostics

PhilippinesIndonesia

Thailand

Tier2 and Tier3Healthcare ServiceCenter development

New materials, biotechnology

Specialty based hospitalsvs. Holistic wellness hospitals

Primary and Diagnosticstand alone centers

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Healthcare – Areas of Expertise

Pharmaceuticals & Biotech

CNS, Oncology, Diabetes, Cardiology, Drug Delivery, Emerging Areas, Pipeline analysis, Biotech Oncology, Drug Delivery Biotechnology, Contract Manufacturing, Contract Research, Ophthalmic, Chronic Diseases

CNS, Oncology, Diabetes, Cardiology, Drug Delivery, Emerging Areas, Pipeline analysis, Biotech Oncology, Drug Delivery Biotechnology, Contract Manufacturing, Contract Research, Ophthalmic, Chronic Diseases

Medical Devices

Cardiovascular Devices Orthopedic Devices, Home Care,

Surgical & Infection Control Pdts, General Medical Devices, Hospital Supplies and ProductsWound Care/ Management Products

Cardiovascular Devices Orthopedic Devices, Home Care,

Surgical & Infection Control Pdts, General Medical Devices, Hospital Supplies and ProductsWound Care/ Management Products

Healthcare and Life Sciences IT

Electronic Medical Records, HISClinical Information Systems,Telemedicine, Life sciences IT,Outsourcing, HealthcareOutsourcing, Clinical SolutionsManaged Care Services,Medical Care Providers,Consumer-based Healthcare

Electronic Medical Records, HISClinical Information Systems,Telemedicine, Life sciences IT,Outsourcing, HealthcareOutsourcing, Clinical SolutionsManaged Care Services,Medical Care Providers,Consumer-based Healthcare

Patient Monitoring

Cardiac MonitoringExternal DefibrillatorsMulti-Parameter MonitoringTemperature MonitoringPulse OximetryRemote Patient MonitoringPatient Monitoring ITSleep Apnea MonitoringGlucose MonitoringBlood Pressure Monitoring

Cardiac MonitoringExternal DefibrillatorsMulti-Parameter MonitoringTemperature MonitoringPulse OximetryRemote Patient MonitoringPatient Monitoring ITSleep Apnea MonitoringGlucose MonitoringBlood Pressure Monitoring

Drug Discovery & Clinical Diagnostics

Genomics, Proteomics,Cellomics, HTS, SNP, IVD,Genetic Testing, MolecularDiagnostics

Genomics, Proteomics,Cellomics, HTS, SNP, IVD,Genetic Testing, MolecularDiagnostics

Medical Imaging

PACS, MRI, Cardiac, CT,Ultrasound, PET, NuclearImaging, Core Imaging

ModalitiesImaging Agents, ImagingSoftware, PACS & ImagingIT , Digital Imaging

PACS, MRI, Cardiac, CT,Ultrasound, PET, NuclearImaging, Core Imaging

ModalitiesImaging Agents, ImagingSoftware, PACS & ImagingIT , Digital Imaging

Pharmaceuticals & Biotech

Cardiology, Hypertension, Diabetes, Oncology, CNS, Pain Management, Respiratory, Women’s Health, Drug Delivery, Emerging Areas, Pipeline Analysis, Vaccines, Antibiotics

Cardiology, Hypertension, Diabetes, Oncology, CNS, Pain Management, Respiratory, Women’s Health, Drug Delivery, Emerging Areas, Pipeline Analysis, Vaccines, Antibiotics

Healthcare Services

Hospital Services, Physicians, Key Opinion Leaders study, Diagnostic centres, Healthcare Institutions,Pharma medical education.

Hospital Services, Physicians, Key Opinion Leaders study, Diagnostic centres, Healthcare Institutions,Pharma medical education.

Financial Services

IPO, Mergers and Acquisition, Strategic Partnership, Business Matching

IPO, Mergers and Acquisition, Strategic Partnership, Business Matching

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and Unmet Needs

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Example: Three concepts of urbanization will emerge:

megacities, mega regions and mega corridors. Smart Cities. Civilian satellites means high

speed broadband, wireless and 4G and free wi-fi in public places/cities

Example: New Product Opportunity - New Mega City

Cars, Car sharing,New Technology Opportunities –

Connected car , e.g. Internet Radio

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turning radius, autonomous parking in

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For Additional Information

Donna JeremiahCorporate CommunicationsAsia Pacific+61 (0) 8247 8927 djeremiah@frost.com

Carrie LowCorporate CommunicationsAsia Pacific+603 6204 5910carrie.low@frost.com

Sasikarn Watthanachan Corporate CommunicationsThailand+66 2 637 7414 sasikarn.watt@frost.com

Jessie LohCorporate CommunicationsAsia Pacific+65 6890 0942jessie.loh@frost.com