G L O B A L P E R S P E C T I V E S / L O C A L I N S I G H T S
CHINA REMAINS A MULTIFACETED HEALTHCARE MARKET
High tech medical devices from the US and Europe are preferred
The government of the People’s Republic of China has been promoting the “Healthy China 2030” initiative for improving primary health-care services, medical insurance and modernizing hospital management.
Recognizing that healthcare costs and medical expenses are a leading cause of poverty for Chinese citizens and having a significant impact on the poorest parts of society, President Xi Jinping noted, “A healthy population is a key mark of a prosperous nation and a strong country.”
China is currently the world’s most populous country with 1.4 billion people, it is one of the world’s fastest-growing economies and already the second largest economy in terms of GDP (and actually first in the world in terms of purchasing power).
However, China still faces great disparity of care when looking at urban versus rural areas. VIP wards of urban hospitals in China deliver the very best care, with access to highly-trained doctors and the latest medical technology and medications, while rural medical personnel are often poorly trained and have little access to medical equipment or medications. This disparity means that not all Chinese citizens have access to quality medical care.
Recent initiatives are focused on lessening these disparities in healthcare services and raising all boats in terms of healthcare for China’s population in both rural and urban environments.
Still, today China as a healthcare market is multifaceted – with great opportunities for medical device manufacturers for example, which has been growing at double digit rates for over a decade. Hospital procurements appear to be driving this buying spree, and continued support from China’s leadership for private hospital development for example should continue to drive this market.
China’s domestic device production is focused on the low-to-mid range medical devices, leaving significant room for higher-end and complex medical devices which are often preferred over domestically-produced options. For major manufacturers like GE, Philips, Siemens and Johnson & Johnson as well as other manufacturers of clinical and diagnostic equipment, medical testing equipment, implantable materials and artificial organs, stents, imaging equipment, surgical equipment, etc. this news should continue to be viewed positively.
CHALLENGES OF AFRICAN HEALTHCARE MARKET
Refurbished medical device market is a bright spot
As a pharmaceutical market, Africa is highly fragmented without the large wholesale channels that exist in North America and Europe. Small pharmacies make up the largest share of the retail market in Africa, while the ten largest retail chains in Nigeria, Kenya and Ghana manage less than 200 locations in total. Suppliers based in India and China lead Western companies to serve the population of over a billion people. While there is a great deal of potential on the continent, distribution is key to success for pharmaceuticals and there is no clear path forward in this regard.
The Jubilee Syringe Manufacturing Company in Nigeria is one example of home-grown medical manufacturing facilities being built to serve the African market. While Jubilee has a very limited product line it does have good capacity (estimated at 350-400 million syringes per year), making it the largest syringe manufacturing company in Africa. Given that disposable syringes are the most consumed medical device on the planet, the company’s future appears promising.
Another bright spot in the medical device market in Africa is for refurbished medical devices, including neonatal intensive care equipment, cardiovascular equipment, endoscopy equipment, defibrillators, imaging equipment, IV systems, patient monitors and operating room and surgical equipment. With growing need for devices but with limited budgets the “like new” equipment market is showing steady growth across Africa. Major players include: Siemens Healthcare systems, Johnson & Johnson, GE Healthcare, DRE Inc., Block Imaging International Inc., Integrity Medical systems Inc., among others.
INDIA RISING TO BECOME A TOP-10 HEALTHCARE MARKET
Domestic pharmaceutical production likely a key benefactor
India is the world’s third-largest pharmaceutical marketplace in pure volume and growth is expected to continue into the future, with India rising to become one of the top 10 global pharmaceutical markets. This is quite interesting simply given the average medical spend per capita is quite low (less than $30 USD per person per year). The size of India’s population obviously makes up for its shortcomings on average consumption costs.
At the same time, this also shows the potential for future growth in India – as the healthcare infrastructure grows and improves in the coming years the size of this market has the potential to become quite enormous.
Biotechnology in India contributes most to the total pharmaceutical revenues and this sector is expected to continue seeing growth rates as high as 30% into the future.
On the manufacturing side, India is currently the world’s largest provider of generic drugs, although it is a highly fragmented pool of manufacturers. Top pharmaceutical companies based in India include: Sun Pharmaceutical Industries, Lupin Limited, Dr. Reddy’s Laboratories, Cipla, Viatris, Aurobindo Pharma, Cadila Pharmaceuticals, Divi’s Laboratories, GlaxoSmithKline Pharmaceuticals, Glenmark Pharmaceuticals, Ipca Laboratories, Torrent Pharma, Biocon, Jubilant Life, Piramal Enterprises, Alkem Laboratories, Abbott India and Sanofi India.
With a large labor pool of highly-trained scientists and engineers, Indian manufacturers have the advantage of a skilled labor force and at the same time lower production costs compared to both the US and Europe. Thus, domestic production of pharmaceuticals will likely continue to be a major part of the Indian market and Indian manufacturers are also well-positioned to continue providing pharmaceutical products to world markets.
BIOSIMILARS AND TECHNOLOGY IN EUROPE
Budget constraints are driving exploration of new pharma options as well as investments in medical technology
While significant technological advances in medicine keep pushing forward, the costs of new cutting-edge therapies and medical devices are also increasing and putting strain on healthcare systems around the world.
In many European countries, government payers are considering options for cost savings such as biosimilars, which are growing in popularity as a means of leveraging competitive pharmaceutical choices while working within and maintaining budgetary constraints.
The European Medicines Agency’s (EMA) recommendation for approval of the bevacizumab (Avastin) biosimilar ABP 215 for treatment of patients with various tumor types is a prime example of how new biosimilars in oncology are specifically offering potential cost savings for European health systems.
With no meaningful differences in adverse events (AEs), serious AEs, deaths or treatment discontinuations found in studies, there is likely no reason for health officials to avoid consideration of this new alternative. Other biosimilar products are already in use and more are in development and will be coming soon to hospitals and pharmacies across the continent.
At the same time, European governments are also increasing investments in healthcare information systems and technology such as electronic health records (EHRs) with efforts focused on streamlining and improving patient care, monitoring healthcare parameters and allowing better networking connections and care delivery as well as providing superior data collection.
These multiple forces should help improve care and decrease expenditures at the same time over the longer term.
MEXICO’S TYPE 2 DIABETES CRISIS
With rates of diabetes skyrocketing, the nation declares a national emergency
Diabetes is now the leading cause of death in Mexico, responsible for more than 80,000 lives each year. Further, poor control of diabetes is also cited as the leading cause of both disability and hospitalization – straining the Mexican healthcare system in its wake.
The impact has been devastating not only for the national health economy but also to individual and family economies and household budgets of those with diabetes given the disability caused by the disease.
The crisis is a side effect of prosperity. As the Mexican economy has been performing well, wages have also been rising but so has the daily intake of calories. The problem is that the typical Mexican meal today is too high in fat, sugar and carbohydrates which has resulted in about 44 percent of the population now being classified as “overweight” with a higher than normal body mass index (BMI).
This trend is unfortunately continuing to rise and straining the Mexican healthcare system, costing billions of dollars each year in fighting this avoidable but potentially fatal type 2 diabetic condition.
Importantly, the impact has been particularly alarming given that the trend is not limited to adults – with a high incidence of obesity also being seen in children.
Thus, the Mexican Ministry of Health has declared a national epidemiological emergency for diabetes, noting that this is the first time in history such an emergency has been made.
The declaration of an emergency is focused on education and promotion of lifestyle changes, and curbing the trend of both obesity and diabetes.
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PERCENT OF MEXICANS WHO ARE OVERWEIGHT
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PERCENTAGE OF MEXICAN ADULTS WITH DIABETES
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PERCENT OF MEXICAN DIABETICS WITH HYPERTENSION
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