India’s medical device market will experience a compound annual growth rate of 17 percent over the next five years. The market will expand by 150 percent in 2015, reaching a value of $2 billion.
The homecare and handheld devices sector will more than triple. Meanwhile, therapeutics, imaging devices and patient monitoring will account for the remainder of the estimated growth.
Currently, imaging is the largest sector followed by therapeutics, patient monitoring, and then homecare and handheld products. By 2015, homecare and handheld products will likely outstrip the patient monitoring sector.
With a current value of $850 million, the medical device sector makes up a little over one percent of the national healthcare industry, estimated to be worth $66 billion this year. Pharmaceuticals currently comprise 19 percent of the market.
Looking to capitalize on this growth, the Indian Semiconductor Assn. is working to promote Indian regulation and policy to encourage domestic manufacture of medical equipment. The ISA is also looking to fund research and development of device for export. With devices increasingly being designed for portability, semiconductors will likely play a critical role in this market.
New generation of product quality inspection in China
In early November, the Chinese State Food and Drug Assn. initiated a joint inspection for drug safety by six government departments. After releasing the Notice on Distributing Special Action Plan for Cracking Down on Violations of Intellectual Property Rights and the Production and Distribution of Fake and Shoddy Products, the SFDA has launched a nationwide program that will be in effect until March of next year. The program is targeted at disreputable products that “upset the market’s normal order,” says the Chinese government’s head drug regulator.
The Ministry of Health, the Ministry of Public Security, the Ministry of Culture, the State Administration of Industry and Commerce, the SFDA and the General Administration of Quality Supervision, Inspection and Quarantine will execute the joint inspections. In addition to pharmaceutical drugs, consumer goods and artistic products under IPR will be amongst the items under scrutiny.
The inspections will be carried out in the Zhejiang, Shandong and Sichuan provinces, and the Chongqing municipality, as well as eight other provinces over the next two weeks.
According to the SFDA’s statement, the inspection will focus on IPR protection, maintaining a fair market environment, false and misleading advertising, mail-order fake drugs, policy implementation and drug quality standard implementation, as well as other issues.
Pharmaceutical sales and information proliferation online will also be monitored to achieve these goals.
Japan slides off the patent cliff
Japan’s looming ‘patent cliff’ has analysts wondering what Japanese pharmaceutical companies will do in an attempt to offset revenue losses when their blockbuster patents expire over the next few years. The ‘patent cliff’ phenomenon that began in 2009 is expected to peak in 2011, causing a large decline in sales for Japanese pharma, and a scramble to stay profitable. However, what is a blow to Japanese companies may be a windfall for western entities eager to merge, acquire, or be acquired by a Japanese business. On the other hand, as Japanese companies seek out other markets around the world, western manufacturers may experience increased competition abroad, necessitating a strategy change.
International mergers and acquisitions may be the boon Japanese pharmaceutical companies need in order to preserve their flow of revenue. With the growing pressure on Japanese companies to become more competitive, M&A activity will allow them to expand despite their sluggish pipelines. Western companies looking for synergies in the Japanese pharmaceutical industry may find willing entities looking to benefit from strategic M&A. However, while partnerships inside the United States’ market is an obvious choice, emerging markets abroad, especially other Asian economies such as Vietnam and Thailand, are also ripe for M&A activity. If Japanese companies target these players for expansion, it will heighten the competitive environment for all businesses in these geographical areas.
While Japanese companies have never been exposed to much risk in the past, the slew of expiring patents – such as Takeda Pharmaceuticals’ diabetes drug Actos and dyspepsia remedy Prevacid, or Eisai’s Alzheimer’s drug Aricept – will require some hedging. In addition to international M&A, outsourcing from Japan to more emergent markets has also become prominent, which will put competitive pressure on western manufacturers selling in those areas.
Malaysia plans growth for healthcare sector
With some of the highest levels of national healthcare spending in Asia (ranking third after Vietnam and South Korea), Malaysia is taking hold of its strategic strengths in the pharmaceuticals and medtech sectors, among others, to expand the country’s economic growth. The healthcare industry has shown high profitability margins over other Malaysian industries since 2000, according to the World Health Organization. With plans to expand these sectors into world-class profit hubs, the current small global player sees a tremendous opportunity for pharmaceuticals and medical devices. To meet its growth goals, Malaysia seeks international sponsors and manufacturers to boost these industries.
The medical device industry in Malaysia is incipient and is planned to have a baseline growth rate of only 8 percent, but it holds much opportunity. With a history of contract manufacturing, the government plans to better enforce international certification, expand research initiatives and provide soft loans and other incentives to entice international device manufacturers to Malaysia. Developing IVD manufacturing in particular will draw on Malaysia’s core manufacturing capabilities and is an area for potential growth.
The Malaysian government is targeting the pharmaceutical industry for a 22 percent growth rate driven by higher exports of generic drugs and increased clinical research. Malaysia is encouraging international manufacturing and investment to kick-start this growth. By 2020, Malaysia’s Minister of Health foresees 1,000 new clinical trials executed per year, 10 times more than the current number. To grow the clinical research environment in Malaysia, policy changes are being implemented to ensure Malaysia will be the country of choice for Phase II-Phase IV trials. Actions being taken include tapping a larger pool of patients and growing the number of CROs.
Ames Gross is president and founder of Pacific Bridge Medical, recognized nationally and internationally as a leader in the Asian medical markets. Founded in 1988 PBM has helped hundreds of medical companies with business development and regulatory issues in Asia. Contact PBM at email@example.com.
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