In Asia, the Covid-19 crisis has brought to light many issues, ranging from the importance of having sufficient medical equipment stockpiles and vaccine research & development (R&D) capabilities, to the efficacy with which technology was employed to help combat the spread of the virus. These lessons will have implications for supply chains, research spending and the pace of healthcare digitalisation.
Even before this crisis, Asia’s healthcare demand was rising, precipitated by expanding and ageing populations, increasing health consciousness and rising affluence. The total healthcare spend in Asia is estimated to exceed $4 trillion by 20241, with hospitals, home care, telemedicine, medical devices and drug research expected to lead the way.
Asia’s competitive edge
China is a major player in low-end active pharmaceutical ingredients (APIs). Nevertheless, the trend over the past decade to move production of high-end APIs to China has escalated after the Covid-19 outbreak. China’s medical R&D in vaccine and innovative drugs have also gained unprecedented traction during the coronavirus outbreak. The innovation in the pharmaceutical industry is expected to accelerate, which bodes well for this sector.
Malaysia, meanwhile, is one of the world’s largest medical gloves manufacturer, commanding a global share of 65%. The country also has an edge in medical devices. Strong ecosystems in the semi-conductor, metal stamping and plastics industries make Malaysia an ideal procurement centre for components used to manufacture medical devices.
Other countries in the region have also shown their manufacturing prowess. Taiwan’s face mask manufacturers quickly ramped up production to meet the sudden increase in demand amid the pandemic. Their ability to do so bodes well as global brands seek to diversify production sites and decrease reliance on a single source.
Covid-19 crisis to spur investments
Covid-19 has shown that Indonesia has under-invested in terms of bed capacity and medical workers. As such, hospital infrastructure will continue to be a major growth driver in the future.
Likewise, the rush to produce vaccines and drugs to treat Covid-19 will benefit the pharmaceutical industry. Generic drug makers, too, stand to gain; some Indian pharmaceutical companies are benefitting from the global efforts to treat Covid-19 patients.
Another area expected to see a surge in investments is digital healthcare, seeing how technology has been used in the fight against Covid-19. Ultimately, integrating information and communication technology in healthcare can lead to more efficient healthcare systems and lower healthcare costs.
Healthtech to transform Asian healthcare
Asia Pacific’s healthcare information technology sector spending is forecast to increase from $12.2 billion in 2019 to $14.9 billion by 20222. China spends the most, followed by Singapore and Australia.
Technology’s merit is evident industry wide. Hospitals utilise drones to fetch medications so that nurses can spend more time on patient care. Digitising medical records also lessens the administrative burden and increases overall productivity. Asia Pacific’s medical wearables market is also gaining traction and expected to record the highest growth of any region between 2020 and 2030.3
Online medical platforms are another growth segment. These allow doctors to treat patients in remote areas, are convenient for patients (especially during the current lockdowns) and optimise resources by reducing the strain on healthcare systems.
Telemedicine gains popularity in Asia Pacific
With 5G networks being rolled out, support for digitised healthcare will likely increase in the coming years. Future healthcare will not just focus on convenience and affordability but also on predictive and preventive care models. Already, India, China and Singapore are emerging as key healthtech hubs.4
The future landscape
Given the size and growth of Asia’s healthcare market, plus the power of technology to transform the industry, more technology giants will likely want to enter into partnerships and/or take stakes in healthcare companies.
Big techs up their stakes in healthcare
But advances in telehealth will have to be matched by strong and proactive regulatory measures to safeguard patients’ interests. The credibility of the new partnerships will strongly depend on their ability to protect patient data. Medical liability is another grey area. Despite having the resources and technical knowledge to create healthcare tools, will big tech companies be willing to accept the medical liabilities that may arise if their predictive devices malfunctioned and provided the wrong advice? A clear framework has to be established.
Integrating technology into healthcare will undoubtedly improve the latter’s overall quality. But given the very different country profiles in Asia Pacific, successful healthtech companies will be those that can offer differentiated technology and one-stop customised solutions that appeal to customers across markets.
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1. Quadria Capital : Shaping Asia’s healthcare for tomorrow, Sep 2018
2. Healthcare IT spending forecast and trends by IDC – May 2019
4. Asia HealthTech Investment Landscape 2018 Report, Galen Growth Asia, January 2019