Import dependent and still maintaining good growth levels, the markets of
South East Asia offer enterprising companies good opportunities. However, they
must meet the challenges of widely differing operating environments.
Why invest in South East Asia?
Like all other sectors, the medical device markets in South East Asia have
been impacted by the downturn of the world economy. Most of these countries,
which rely heavily on exports as a significant portion of their respective GDP
- South Korea and Singapore being prime examples - saw cuts in demand for
manufactured goods and most have seen dips in overall GDP for 2009. Economic
conditions, however, have started to gradually improve in these markets and
GDP growth rates were strong between 2010 and 2012.
The economy aside, what factors are affecting medical device growth?
Fundamentally, the eight countries covered in this collection share a similar
characteristic. These medical device markets have, on average, been growing at
more attractive rates compared to the more developed, mature medical device
markets in Western Europe, for example.
Broadly speaking, the high growth rates for this region have been spearheaded
by a number of similar and distinct factors. All countries in this report
collection have experienced strong medical devices import growth and steadily
rising health expenditure. Medical devices imports, as we have seen in the
last economic crisis in 1997, could possibly be affected in the short term,
but like before, these countries are expected to bounce back.
The demand for medical devices prior to the current downturn was largely
driven by the expansion of the respective healthcare sectors in the region,
and government budget cuts for capital infrastructure may temper growth in the
short term. But healthcare development and provision is an increasing
political and social priority for nearly all these countries, even the poorer
ones like Indonesia, Thailand and Philippines and the prospects for medical
devices remains strong.
Other factors driving or impeding the market's growth rate are also taken into
account. For example, government cost containment strategies and tariff and
non-tariff barriers to trade for medical devices. New dynamics are also
affecting the market, such as Vietnam's expansion of health insurance to all
citizens by 2014 or the opening up of the notoriously difficult but lucrative
South Korean market via Free Trade Agreements (FTA) with the USA and the EU.
Highlights from the Region
The Social Insurance Providers Board (BJPS) Law, which becomes effective on
1st January 2014, aims to provide universal healthcare coverage for all
Indonesians. The programme, to be managed by State-owned PT Askes, will
entitle the entire population to free treatments and medicines for major
illnesses at public healthcare facilities, the cost for which will be borne by
the government. Public funding for healthcare is low, estimated at around
US$10.7 billion in 2011, and the country continues to rely on international
aid. Despite the present administration placing more emphasis on healthcare,
funding, insufficient numbers of health professionals and bureaucratic
problems are hampering development. There is a marked disparity in the
standard of healthcare between rural and urban areas. The capital city Jakarta
enjoys relatively good levels of primary care as well as a range of modern
private specialist facilities, while healthcare coverage in remote regions
tends to be insufficient.
Malaysia's major natural resource is rubber, and the country's medical device
exports are dominated by latex products such as surgical gloves. The share of
this sub-category has slowly started to diminish with the steady growth of
diagnostic imaging exports in recent years, particularly electrocardiographs
and other electrodiagnostic apparatus. In the five years from 2007-11, imports
rose at a CAGR of 13.2%. Imports are expected to continue growing at a strong
rate, in line with rising health expenditure growth, and the country's heavy
reliance on imports to meet its healthcare needs. Malaysia's first set of
regulations for medical devices, the Medical Devices Act 2012 (Act 737), was
approved in March 2012. Effective November 2012, it became mandatory for all
medical devices to be registered with the Medical Devices Authority (MDA). The
regulations are aligned with the guidelines drawn up by the ASEAN
Harmonisation Working Party (AHWP) and the Global Harmonisation Task Force
6 KEY MARKETS COVERED
These Quarterly Updated Reports Analyse the Issues.
South East Asia Medical Device Market reports are published by Espicom. Each report provides an individual and highly-detailed analysis of each market, looking at the key regulatory, political, economic and corporate developments in the wider context of market structure, service and access.
Table of Contents
Espicom Industry View
Industry Risk Rewards Ratings
Industry Trends & Developments