Growing Asian Healthcare Market Expands Opportunities for Devicemakers

Per capita healthcare spending in Asia is expected to increase by almost 64 percent by 2010, expanding markets for medical devicemakers, according to a new report from Kalorama Information.

The report, “Asian Medical Device Markets,” says the market in Asia has experienced “constant growth” over the last decade, despite evolving regulatory and technological factors.

For the 13 countries in Asia, the report said the combined healthcare expenditure was $753 billion in 2005. But the report specifically focused on the healthcare sectors in five countries — Australia, China, India, Japan and South Korea — which Kalorama said have a combined value of approximately $31.63 billion in 2007.

By 2010, these five key markets are expected to total $43.08 billion, with China, Australia and India showing “exceptional growth.”

These markets could present important opportunities for devicemakers as the medical device markets of all five countries have “very large import components.”

In fact, for Australia and India, imports make up as much as 90 percent of the medical device market. Similarly, imports, primarily from the U.S. and Europe, make up almost 70 percent of the medical device market in China, the report said.

Key Markets

The domestic Australian medical device market was estimated to be worth approximately $2 billion in 2006 and is expected to grow at a compound annual growth rate (CAGR) of roughly 14.57 percent until 2010.

One of the key characteristics of the Australian medical device industry is that most medical devices produced are exported, while most medical devices consumed are imported, Kalorama said.

Another of the three major growth markets is China, estimated to be worth roughly $5.03 billion in 2006. Imports make up almost 70 percent of this market, which is expected to grow at a CAGR of almost 24 percent until 2010, the report said.

Technologies such as medical imaging, ultrasound probe technology and fiber endoscope-related technology are being introduced in China to satisfy increasing demand for products that meet international standards.

But industry growth is inhibited by doctors’ limited knowledge about high-technology devices, the “very small” demand for refurbished items and the “fragmented and unregulated” nature of the market, according to Kalorama.

India also has a “highly unregulated regulatory setup,” but is in the process of establishing regulatory norms, the report said. The medical device market there increased from approximately $550 million in 1993 to roughly $1.3 billion in 2006 and is expected to grow at a rate of roughly 7.2 percent annually until 2010.

Manufacturers may want to focus on India’s private sector, which held 80 percent of the healthcare delivery market in 2006 and “is expected to drive the development of infrastructure in the healthcare industry” over the next several years.

The Japanese medical device market, worth $19.27 billion in 2006, is the largest in the region and the second largest in the world, Kalorama said. However, it is expected to show the least growth — at a CAGR of 1.49 percent over the next five-year period — among the five countries.

Demand for Cutting Edge Technology

The demand for imported medical devices is still expected to increase, along with the demand for devices with “cutting-edge technology” manufactured by U.S. companies. In addition, because of its aging population and shortage of hospital beds, high-quality homecare equipment has a potential market in the country.

However, the saturation level of the market and the “rigid laws and regulations” of the country are limiting market growth.

Finally, the South Korean medical device industry is estimated to have been $2.61 billion in 2006, with an expected CAGR of 5.1 percent until 2010, to reach roughly $3.18 billion.
Favorable government policies and R&D support have helped the industry, the report said. The demand for homecare medical devices and self-treatment devices is growing and imports have been a significant component of the South Korean medical device market in recent years.

However, increasing medical expenses and strict requirements for market entry are the main growth inhibitors for the market. — April Astor