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Asia Poised to Step Up as World's Second Largest Medtech Market

Thanks to the ever-rising wealth and increased longevity of its citizens, Asia will soon be second only to the US as a medtech market, with diagnostically-enabled wearables and the digitisation of medicine set to make a huge impact.

Photo: The Medical Fair Asia 2016: Dominated by digital and demographic changes.
The Medical Fair Asia 2016: Dominated by digital and demographic changes.
Photo: The Medical Fair Asia 2016: Dominated by digital and demographic changes.
The Medical Fair Asia 2016: Dominated by digital and demographic changes.

With its rapidly changing age demographic and rising affluence, Asia is set to overtake Europe as the world's second largest medical technology market, at least according to the industry experts gathered for the Medical Fair Asia 2016. As people are living longer with chronic conditions, the need for cheaper healthcare delivery was a frequent topic at the event, while the range of increasingly sophisticated and affordable wearable monitors now available was seen as having a key role to play in the future of medical care.

According to Gernot Ringling, Managing Director of Messe Dusseldorf Asia, the organisers of the event, Singapore is the ideal location for the event. He believes that Singapore has now taken a lead in the South East Asian medical market, saying: "Singapore's healthcare budget has more than doubled, rising from S$4.7 billion (US$3.46 billion) in 2012 to S$11 billion (US$8.1 billion) this year.

"This represents a paradigm shift in Singapore's approach to healthcare. This is particularly evident in terms of the evolution of its integrated-care approach, which is providing good and affordable healthcare, while also resulting in improved clinical outcomes.

"Similar trends can now been seen across Southeast Asia and beyond. Many countries in the region are now looking to augment traditional care management with new, patient-centric, collaborative business models, wellness and lifestyle-themed health services, telehealth initiatives, subscription care models and more."

Ringling believes that many of the trends evident in Singapore are also shaping healthcare programmes across Asia. He said: "In Asia, the number of people aged 60 and above will increase from the current level of 12% to 25% by 2050, rising from 207 million today to 857 million by the middle of the century.

"According to a study by Deloitte, spending on healthcare will increase by 6.6% per year up to at least 2019, a move driven by enhanced public care programmes and private wealth. These trends indicate that Asia will be flourishing market for global health care investors as well as service operators."

Highlighting the growing importance of medical technology in Singapore, S Iswaran, the Minister of Trade and Industry, said: "The sector has grown from US$590 million in 2000 to US$2.58 billion in 2015. This is largely down to three factors.

"Firstly, there is the increasing demand for medtech products in Asia and around the world. This has been driven by rising affluence in the region, as well as aging populations in many of the more developed economies.

"Secondly, Singapore's strengths in a number of related sectors – such as precision engineering and pharmaceuticals – has allowed local companies to quickly migrate into medtech, capturing the opportunities that have emerged in this space.

"Finally, the high level of government investment in research and development has led to the emergence of a new range of high-value medtech products."

Citing a McKinsey report predicting that the Asia-Pacific medtech market will grow in value from US$88 billion in 2015 to US$133 billion in 2020, he maintained that Singapore is now uniquely well positioned to take advantage of the expansion of the sector.

That same McKinsey report – MedTech in Asia, December 2015 – indicated that Asia has very diverse medical needs, many of which are currently going unmet. The report also highlighted various infrastructural, financial and regulatory barriers that need to be overcome in order to allow certain markets to mature.

Photo: More than 1,200 exhibitors attended this year.
More than 1,200 exhibitors attended this year.
Photo: More than 1,200 exhibitors attended this year.
More than 1,200 exhibitors attended this year.
Photo: European companies had a substantial presence.
European companies had a substantial presence.
Photo: European companies had a substantial presence.
European companies had a substantial presence.

It is these factors, among others, that many see as accounting for the stark under-representation of care in Asia, home to 51% of the world's population, yet currently only 22% of the global medtech market in value terms. By 2020, McKinsey expects the region to overtake Europe and become the world's second largest market, after the US.

Abhay Bangi, the Transaction Advisory Services Partner for Ernst & Young, the multinational business consultancy, provided some global context for the numbers involved. He said: "By 2050, there will be 1.6 billion people in the world aged 60 or above. By 2040, non-communicable diseases, such as strokes and diabetes, will cost US$30 trillion in care. Our research also shows that 80% of smartphone users now want to interact with their healthcare providers via their handsets.

"These developments will result in real challenges for the medical technology sector. Healthcare needs to be more cost-effective and there needs to be greater transparency and increased efficiency in order to meet changing customer expectations.

"Over the next three to five years, we see the market changing considerably. There will be new payment and financing models, analytics driving device selection and patient diagnosis, as well as a shift from focusing on engagement to outcomes, with trust proving to be the ultimate competitive advantage."

Peter Tay, a Research Analyst in Transformational Health for Frost & Sullivan, a Texas-based consulting company, was also predicting rapid growth. He said: "By the end of the last decade, the global medical technology market was worth US$150 billion annually. This decade, it will be worth more than double that – some US$340 billion. In the next decade, it will be worth US$500 billion.

"The key drivers of this growth will be China and ASEAN. In 2014, these markets were worth more than US$250 billion, a 32% increase compared to 2010. China, the biggest single market, grew by 42%. Some markets, notably those starting from a particularly low base, grew massively – Vietnam by 273% and the Philippines by 341%.

"In the ASEAN region, initiatives are already underway that will enhance the regulatory framework for medical devices, both at the regional as well as at the national level. Among the opportunities we see in these markets is the growing use of 3D printing to create customised medical products and a wider role for connected devices with regard to driving data analytics and improving patient care."

Indeed, one of the most striking trends at this year's event was the continuing rise of wearable medical devices. Highlighting this, Dave Sheppard, Principal of MedWorld Advisors, a Massachusetts-based consulting group, said: "By 2020, the Yole Development Group estimates that the global wearable market will be worth US$90 billion, a rise driven by industrial, consumer and healthcare applications.

"The increasingly aging profile of the global population, rising medical costs, enhanced sensor capabilities and extended medical applications are all proving a boost to the wearables sector, with many people keen to have a higher level of control over their own healthcare.

"There are already hundreds of medical wearables available, with application literally from head to toe. Among the next generation of wearables will be electronics embedded into stretchable patches and medical devices that can be swallowed. One of the key challenges that has to be overcome is just how to power these devices."

Dr Thomas Dietrich, Managing Director of the IVAM Microtechnology Network, a Germany-based association of high-tech companies, sees wearables as being at the forefront of the inevitable digitisation of medicine, a process that he will bring huge benefits to Asia.

He said: "We will see patients having a better quality of life as their treatments will be optimised and personalised with better data. It will also become possible for people living in rural areas to obtain diagnosis, medical advice and treatment without ever having to visit a doctor.

"Costs can be decreased or, at least, be better controlled. The digitisation of primary healthcare also means new business opportunities. Pharma and medical equipment manufacturers, in particular, will need to find new business models."

This digitation, however, will not provide every solution to the problems of the world's increasingly aged population. Dr Ben Tan, Chief of the Department of Sports Medicine in Singapore's Changi General Hospital, believes that more conventional approaches still have a role to play.

He said: "According to World Health Organisation figures, the fourth biggest killer globally is a lack of physical exercise, followed by high blood pressure, tobacco use and high blood glucose. As doctors, we routinely screen for high blood pressure, diabetes, high cholesterol and so on, yet we fail to look at low respiratory fitness.

"How much physical exercise people need to take – and the value of it – should always be part of our conversation with patients. Along with prescribing a dose of medication, we should also prescribe a dose of exercise."

Echoing Tan's concerns, Vincent Phang, Deputy Director of Physical Activity and Weight Management for the Singapore Health Promotion Board, said: "In Singapore, 39% of adults do not exercise, while 10% are obese. Last year, we held the first National Steps Challenge programme as a way of encouraging people to move more.

"Even just a little bit of exercise has major health benefits. The goal of the programme was to get people to increase from a baseline of 3,000 steps to 5,000 a day, an additional 2,000 steps or more, with various rewards on offer for those reaching 10,000 steps. To encourage sign-ups, a free wearable step tracker was given and, as a result, more than 150,000 people came on board. Our second challenge begins in October."

Photo: Elderly-friendly wearables: An essential part of 21st century healthcare.
Elderly-friendly wearables: An essential part of 21st century healthcare.
Photo: Elderly-friendly wearables: An essential part of 21st century healthcare.
Elderly-friendly wearables: An essential part of 21st century healthcare.

Medical Fair Asia was held at the Marina Bay Sands in Singapore from 31 August to 2 September. The event attracted more than 1,200 exhibitors from some 40 countries.

Ronald Hee, Special Correspondent, Singapore

Content provided by Picture: HKTDC Research
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