Asia-Pacific Healthcare Outlook 2014

Frost & Sullivan’s Asia Pacific Frost & Sullivan’s Asia Pacific Healthcare Outlook 2014Healthcare Outlook 2014

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Reenita DasPartner, Healthcare

Today’s Moderator and Panelists

Rhenu Bhuller

2

Senior Vice President, Healthcare

Natasha GulatiSenior Industry Analyst,

Connected Health

What are some of the key developments in APAC that

could change the playing field in Healthcare

Reenita Das

Focus Points for Today’s Panel Discussion

� What are some of the key predictions for 2014?

3

� What are some of the key developments in healthcare financing impacting the industry?

� What are some of the key regulatory changes affecting the industry?

� How are the investments and consolidation shaping-up in the region?

� What could be some of the technologies that could shape our future?

Poll Question

Which are the top three challenges facing your organisation in Asia Pacific markets today:

• Requirements for evidence to show cost effectiveness of medical products (e.g. health technology assessments)

• Price controls for innovative products

Lack of reimbursement coverage/access to innovative

4

• Lack of reimbursement coverage/access to innovative medicine/products.

• Under-utilization of advanced technology in healthcare delivery

• Others (please indicate) _____________________________

2013 – The year that saw the Industry moving Toward Better Access, Transparency, Investments and Spending

500+Drug

approvals in

>15 BnPHI benefits paid out in Australia

4.8%Increase in per capita HC exp by

2018

99.0% coverage of UHC for China’s rural

population via New Rural Cooperative Scheme (NCMS).

$2.2 TnAPAC HC spend by

2018 (10.5% CAGR)

$1.34 Tn

(2013)45%

Private HC spend . . .

78%

$9BnInvestment

5

15-20%Price cuts in China

for 700 formulations. 348 drugs in India may

receive similar treatment

approvals in China (-17% from 2012)

30%Target for generic

consumption in Japan

38%Of healthcare

service providers operating beyond

their home country

~2%Spend on HCIT by hospital

operators

>10 BnAPAC HC

M&A (>10% increase

over 2012)

78% OOPInvestment by SK MOH

for dev. of 20 new drugs

213Drugs

added to China’s

EDL

What are Some of the Key Predictions for 2014?

6

Frost & Sullivan’s Predictions 2014

Even Though HTA Gains Momentum, Value Based Care in its Entirety Remains Nascent

7

Source: Frost & Sullivan.

Transparency in Pharmaceutical Pricing Would Negatively Impact Bottom Line for Pharma/Biotech Companies

Replication of Home Healthcare Models Entering Growth Markets

Poll Question

Please select the top three emerging markets in Asia Pacific which are of highest priority to your organization for future growth?

1. China

2. India

3. Indo China (Laos, Myanmar, Cambodia)

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Indo China (Laos, Myanmar, Cambodia)

4. S E Asia (Indonesia, Malaysia, Thailand, Phillippines)

5. Others _____________________

Key Developments in Healthcare Financing and Regulations

$6,777

$7,762

$4,269 5000

6000

7000

8000

US

D$

Healthcare Expenditure per Capita, APAC, 2012 - 2018

16.1%2.3% 4.7% 8.7% 13.8%9.7% 5.5% 15.3%3.4%CAGR2012-2018

Healthcare expenditure per capita is expected to increase 4.8% across the region by 2018

Total APAC Healthcare Spending is expected to Grow from USD1.34tn to USD2.2tn in 2018 at a CAGR 10.5%

10

$3,494

$2,200

$1,655

$297 $518

$170 $109 $63

$3,841

$2,277

$730

$681 $281 $237 $148

0

1000

2000

3000

4000

Australia Japan Singapore South Korea

China Malaysia Thailand Indonesia India

US

D$

2012 2018

Although Enrolment to the UHC Schemes Would Eventually be Achieved, Delivery will be Challenging

11

UHC – Universal Health Coverage. Sources: Frost & Sullivan, Ministries of health of respective countries.

While Governments Enforce more Complex value based Healthcare Measures…

Cost Control Tools* AUS CH IND JP KR TW ID MY SG TH VT

Risk-sharing agreements R/L

Cost-effectiveness assessment

R/L Y Y R/L R/L

Quality/innovation/ therapeutic value rating

Y Y Y

Generics promotion Y Y Y R/L R/L Y Y

Incre

asin

g level o

f co

mp

lexit

y

12

Generics promotion Y Y Y R/L R/L Y Y

International price referencing

R/L Y Y Y R/L

Spending caps Y R/L Y Y Y

Patient contributions Y Y Y Y Y Y Y

Prescribing controls Y Y Y Y Y

Mandatory price cuts Y Y Y Y Y

*Some of these are currently being practiced/applied only for pharmaceutical productsR/L: Recently implemented/Limited applicability; Y: Yes Sources: Frost & Sullivan, Ministries of health of respective countries.

Incre

asin

g level o

f co

mp

lexit

y

How are the Investments and Consolidation shaping-up in the Region?

13

Japan Leads M&A Activity Followed by China and India

Very High

High

Medium

Low

APAC M&A in healthcare:

Till Q3 2013: $10.1bn

2012: $9.1bn

Japan M&A in healthcare

Till Q3 2013: $1.7bn

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* Only till Q3 2013. Sources: Frost & Sullivan.

Till Q3 2013: $1.7bn

2012: $0.4bn

Healthcare Services Sector Ripe for Partnerships

ThailandVibhavadi Hospital

acquired 4 hospitals for $90.59 M

IndiaFortis sold its stake

in Quality Healthcare in Hong Kong to

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Sources: J.Chakma et al. NEMJ. Ministry of Health of respective countries, Frost & Sullivan

AustraliaRamsay Sime Darby JV established in Malaysia

MalaysiaKPJ continues acquisitions.

IndonesiaFirst REIT acquired 2

of Siloam Hospital chains for $190.3M

in Hong Kong to BUPA for $355 M.

Increasing Asia Pacific level acquisitions and partnerships

Healthcare services and delivery continues to see healthy activity, both expansion and consolidation

What could be some of the Technologies that could Shape our Future?

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Companies Technology Cost Market Impact

Frugal Innovations Addressing Common Challenges

Input Cost: R&D

Simplification

Frugal Innovation

Output Cost: Affordability

Scale-up

Quality

Distribution

Adaptability

Performance

Servicing

1717

Companies Technology Cost Market Impact

Indian prosthetics organization, BMVSS

Artificial Limb $45 Used in over 1000 amputees

Biosense TouchHb Not availableDevice to detect anaemia without a blood sample.

undergoing clinical trials at a few hospitals in Mumbai

Diabeto Diabetes Monitoring $40 to $55A bluetooth-powered hardware device for easily monitoring and managing blood sugar levels in

diabetics

Forus Health 3nethralow-cost portable pre-screening ophthalmology

device

Phoenix medical systems

Infant warmer and incubator

$1,300affordable alternatives to infant warmer and

incubator

Source: Frost & Sullivan

ICT Becomes More and More Pervasive in Healthcare

Big Data

Secondary Use of EMR/

EHR Data

NGS Informatics

and Analytics

Population Health

Management

Healthcare Consumer at the

center of the eco-system and in control of his

Bluetooth

RFID (Radio-frequency

Identification)

Other

Cloud Infrastructure

M2M (Machine-to-

Machine)

1818

Medical Imaging and Informatics

Remote Patient

Monitoring

healthGSM; Mobile Networks

Unexplored Technologies

Seamless information gathering, collation, analytics, and dissemination

Seamless information gathering, collation, analytics, and dissemination

Asian Companies come out of the Closet: Our Top Picks

SYSMEXSlated to be one of the top global diagnostic companies by 2018, already leading in one of the key IVD segments.

Hengrui MedicineOne of the leading domestic pharmaceutical companies with turnover of close to $1B. It is one of the first Chinese companies to have received USFDA and European regulatory authorities for its products e.g. Imrecoxib.

1919

Samsung Electronics

Samsung S Health has emerged as the mobile app of choice not only because of its multiple functionalities but also because of the wide consumer base the company enjoys.

TelstraTelstra Health recently announced its eHealth strategy focusing on how it can leverage its differentiating services to solve healthcare problems.

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For Additional Information

Jennifer Carson

Corporate Communications

Healthcare

(210) 247-2450

[email protected]

Reenita Das

Partner, Healthcare

Healthcare

(408)857-9386

[email protected]

23

Rhenu Bhuller

Senior Vice President, Healthcare

Healthcare

[email protected]

Natasha Gulati

Senior Industry Analyst

Healthcare

[email protected]

Asia-Pacific Healthcare Outlook 2014

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