Healthcare Asia (March 2021)

ISSUE NO. 16

The magazine for healthcare administrators and policy makers

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Display to 31 March 2021

THE TELE-MED REVOLUTION How the pandemic paved way for remote consultations across Asia Pacific

Healthcare Asia

WHAT’S BEHIND THE TRANSFORMATION OF SOUTHEAST ASIA PHARMA MARKETS? HOW CAN THE HEALTHCARE INDUSTRY RESPOND TO THE NEXT PANDEMIC? THAILAND SHOOTING FOR THE MOON HEALTHCARE ASIA AWARDS: ALL THE WINNERS

DISCOVER

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FROM THE EDITOR With the COVID-19 spreading around the globe, the healthcare industry has been innovating ways on how they can support those who need medical assistance. According to IQVIA, the pandemic paved the way for teleconsultations as the number of remote consultations sharply increased due to lockdowns. Read more about this on page 20.

PUBLISHER & EDITOR-IN-CHIEF Tim Charlton MANAGING EDITOR Paul Howell PRODUCTION EDITOR Janine Ballesteros PRODUCTION TEAM Beatrix Malesido Djan Magbanua Mary Claire Mercado GRAPHIC ARTIST Tyrone De Los Santos

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SINGAPORE Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building Singapore 069533

Many factors are also affecting the transformation of Southeast Asia’s pharmaceutical market. Annual revenue growth is expected to exceed 11% over the next five years as the region presents potential for drug and pharmaceutical manufacturers. Learn more about this on page 16.

This issue also features an exclusive interview with Paessler’s Asia Pacific regional director, Tee Haw Pang, who talked about why hospitals should adopt a unified monitoring approach and what advantages can the system provide to its users. Check out the interview on page 8.

Further, Asia’s most prominent hospitals were once again recognised and honoured at the third Healthcare Asia Awards which coincided with the inaugural Healthcare Asia Pharma Awards. Flip the pages and find out more on some of the big winners.

As always, we wish you the very best of health. Enjoy the issue!

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Distributed to all CxO, board levels, doctors, and healthcare professionals of major private/public hospitals and health ministries in ASEAN and Hong Kong.

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Healthcare Asia is also the media sponsor for the following events:

CONTENTS

20

COVER STORY COVID-19 PANDEMIC PAVES WAY FOR TELECONSULTATION IN APAC

COUNTRY REPORT

FIRST 04 New spending signals market

10 Thailand striving to lead the

growth

04 Battling in the frontlines through the

medical industry in Asia

12 Gov’t funding brings more

pandemic

opportunities for the Philippine medical device market

05 Pandemic renews debate over public funding of healthcare

05 How Parkway Pantai stepped up in the COVID-19 fight

06 Elder groups drive healthcare demand

ANALYSIS

08

HEALTHCARE ASIA VIRTUAL CONFERENCE 2020 HEALTHCARE LEADERS MAP OUT RESPONSE TO THE NEXT PANDEMIC

24

EVENT COVERAGE FIND OUT WHO WON AT THIS YEAR’S HEALTHCARE ASIA AWARDS

OPINION 26 Emma Sterling: COVID-19 spurs digital health revolution - can hospitals keep up?

28 Chris Hardesty: Nextgen PPPs for Connected Healthcare in the AsiaPacific

14 Southeast Asia’s difficult journey to sustainable healthcare

16 Southeast Asia on the cusp of a

06 Bumrungrad creates digital

new dynamic for pharma: CPhI

laboratories

06 China’s healthcare spending to reach $49B by 2023

Published Tri-annually Bi-monthly on on the the Second Second week week of of the the Month Month by by Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building 2 HEALTHCARE ASIA Singapore 069533

To access the stories online, visit the website

www.healthcareasiamagazine.com

Fullerton Health Wins

cover the whole journey primary care journey from managed care and network management services, primary care, and, diagnostics, specialty and ancillary care.

The integrated healthcare services model allows Fullerton Health to offer cost-effective and customised digital solutions to its clients based on their specific requirements, with the aim to enhance workforce productivity by improving employees’ health and wellness while optimising corporate health expenditure.

PRIMARY CARE PROVIDER OF THE YEAR AWARD

Fullerton Health, the leading integrated healthcare platform, owns more than 500 healthcare facilities and manages an extensive global network of over 12,000 healthcare providers in Asia Pacific. It has a regional presence across nine markets Singapore, Philippines, Australia, Indonesia, China, Hong Kong SAR, Malaysia, Papua New Guinea, and New Zealand – and continues to deepen its regional reach in these markets.

Fullerton Health offers clients and employees alike seamless access to services via mobile app and online portal - Fullerton Healthcare Network3 (FHN3). Drawing on the data and insights from FHN3, the company is better able to align to clients’ requirements to customise a range of solutions, focusing on preventive care such as chronic care management, vaccination and wellness programmes.

Fullerton Health’s value proposition is the integration of healthcare service offerings with customised management and advisory capabilities, in line with its purpose to deliver affordable and accessible care for all in Asia Pacific. With over 6,500 employees, including over 1,100 healthcare professionals across the region, Fullerton Health

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With the restrictive environment of COVID-19, it has also been the catalyst to accelerate the adoption of its own telemedicine platform via FHN3 mobile application by its clients, allowing their employees customised convenience and unrestricted access to healthcare.

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TOGETHER WE ARE STRONGER THAN CANCER

Chemotherapy Hormone Therapy Immunotherapy Radiation Therapy (IMRT/VMAT,IGRT, SRS/SRT/SBRT) Surgery Su Targeted Therapy Sri Kota Specialist Medical Centre, Klang

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The consistent commitment toward our purpose has allowed us to grow from a chain of clinics in Singapore to having a regional footprint in 9 markets across Asia Pacific.

Our purpose driven efforts have attracted like minded stakeholders. We have partnered with established companies in business and technology to build better communities. These partnerships have enhanced our capabilities and accelerated innovations in new models of care delivery.

Ho Kuen Loon Group CEO, Fullerton Health

FIRST NEW SPENDING SIGNALS MARKET GROWTH AUSTRALIA

Investors are seeing potential

Healthcare spending in Australia is seeing a rise due to its growing pensionable population, a Fitch Solutions report reflected. Changing lifestyles and the pandemic has added to the growth.

The report noted that as incidence of chronic conditions are rising amongst the population with strong bias towards branded drugs, Australian patients will require costly prescriptions and long-term treatment. Similarly, higher healthcare spending will be needed for a range of diagnostic tests, rehabilitation and similar facilities and treatments.

The report also predicts Australia to remain one of the most attractive markets globally for innovative drugmakers due to the strength of its regulatory environment and positive demographic trends.

In addition, Australia's Department of Health has streamlined the drug approval processes undertaken by the Therapeutic Goods Administration which will be highly beneficial for multinational drugmakers.

High-value medicines such as Verzenios (abemaciclib), used for treating advanced or metastatic breast cancers in adult non-premenopausal patients, gained Pharmaceutical Benefits Scheme (PBS) listing at the start of this year. Patients accessing the drug via the PBS will pay $28.1 a script, or $4.5 for concessional patients. Without the subsidy, the drug is expected to cost up to $37,817 a year.

In the long term, this will shape commercial opportunities for private healthcare providers and foreign drugmakers. Given the government's view that strong private sector involvement in health services is essential to the viability of the Australian health system, it provides a 30% subsidy to individuals with private health insurance and has introduced additional arrangements to foster life-long participation in private health insurance.

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Hospitals’ core team should be brave enough to face the frontlines

Battling in the frontlines through the pandemic PHILIPPINES

N

o one could have predicted the scale of the pandemic’s impact in the world.

Lockdowns were issued, borders were closed, and the economy was shut down. Amidst all these, the healthcare community bore the brunt of the aftershock left by the COVID-19 pandemic.

In a global pulse survey by the World Health Organisation, 90% of countries have reported disruptions to essential health services since the onset of the COVID-19 pandemic.

In his talk during the Healthcare Asia Virtual Conference 2020, the president and CEO of The Medical City, Dr. Eugenio Jose Ramos, stressed that a leader should be able to respond quickly, and make good decisions on the spot, which are essential in dealing with the COVID-19 pandemic.

“The Medical City identified a core team that would be in the position to make decisions and to actually be brave enough to face the frontlines,” Ramos said.

Because of social distancing measures, several things also have to change and adapting to these

Leaders should be able to respond quickly, and make good decisions on the spot whilst dealing with the COVID-19 pandemic

changes is another weapon in leading the frontlines.

TMC quickly established several changes like repurposing different floors and having a sanitised room for donning and doxing PPEs. TMC also established a 2-in-1 hospital concept where patients being treated for COVID-19 were separated from patients with other illnesses.

Adaptability also means timely innovations like how TMC created a medical concierge for patients to communicate with their health maintenance organisation (HMO), as some HMO offices remained closed due to lockdown measures imposed by the government.

Ramos acknowledged the importance of accountability not only with patients but also with TMC’s staff. The hospital ensured that they have adequate PPEs, and enacted several safety protocols.

Some hospital wards were also repurposed as dormitories for staff.

He also stressed how important it is to seek alliances, with TMC reaching out to the local government by training staff in caring for critical care patients and the correct ways of wearing a PPE at the city’s public hospital, caring for patients suffering from COVID-19.

“People have to work together to go beyond there individual interest, to go beyond interest of each hospital and to make sure that you work in an ecosystem, whether its supply chain, whether it’s the media, whether it’s governance or operations, or the economy or transportation, these are all necessary to come up with an effective strategy to deal with the COVID crisis,” Ramos added.

TMC’s CEO Dr Eugenio Jose Ramos

FIRST Health equity is likely to be a priority for many organisations in the postCOVID-19 period.

The pandemic has renewed debate around public health funding models

Pandemic renews debate over public funding of healthcare ASIA PACIFIC

T

he COVID-19 pandemic has made drastic changes in the health sector, but it has also refocused attention on some key policy debates. In particular, clamours for universal healthcare systems, or at least greater levels of public spending on healthcare, are now louder than ever across the Asia-Pacific region.

Healthcare and Life Sciences Director of KPMG Chris Hardesty says that sustaining healthcare

budgets of 15% of the GDP was the ideal to strive for.

“We need to be a lot more creative by creating risk schemes,” he told the Healthcare Asia virtual conference in October. “We’re looking at even crowdfunding, (and) nationalised health savings accounts to encourage people to take accountability for their own healthcare,” he explained.

Other speakers at the event noted that this increase in funding

should come even as technology and innovation (including through telemedicine programmes) were bringing down the overall costs of public healthcare.

Managing Director and Senior Partner at Boston Consulting Group Zarif Munir believes that the priority for most organisations in the postCOVID-19 period will be health equity, and telemedicine provides a significant new advantage in that continuing journey.

“We have seen that digital (health schemes) have proven to work at scale,” he said. Rather than go to a hospital, patients are able to enter their information, including symptoms and health statistics, digitally. This means health professionals have faster access to more relevant information when making their consultations.

The collected data can also be aggregated for population-wide trends and analysis.

“We think that real world data can expand to have greater agility,” Munir explained further.

Medical Director Prince Court Medical Datuk Dr Kuljit Singh said machine learning is likely to be next on the agenda.

“In Asia, we see a lot of patients flocking to hospitals for treatment,” he said. “Artificial intelligence is useful for diagnostic purposes - we just have to put these systems in to guide doctors for diagnosis.”

HOW PARKWAY PANTAI STEPPED UP IN THE COVID-19 FIGHT COVID-19 has drastically changed the way medical facilities work, and some of those changes are here to stay, according to Dr. Noel Yeo, senior vice president of Parkway Hospitals Singapore. On the other hand, the unprecedented crisis also allowed healthcare providers to prepare for the next pandemic.

Parkway Pantai’s hospitals allowed patients from the National Centre for Infectious Diseases to be transferred over for more extensive care.

It also had to quickly set up its lab for PCR testing for COVID-19, and was subsequently the first private lab in Singapore to do so. The organisation also managed to set up one of the facilities at the Expo Hall, which, at one point, housed about 8,000 COVID-positive patients.

In minimising cross infections, dedicated fever tents were set up to manage both

suspected and positive COVID-19 cases.

Concurrently, staff assigned to the COVID-19 ward were not deployed to other wards.

Moreover, lab automation has made healthcare safer and more effective. “Parkway Lab is equipped with many state-of-theart equipment to process more COVID-19 specimens with greater accuracy and in a shorter time,” said Yeo. Parkway Lab has the only Roche cobas 8800 system in Singapore, which can run about 960 tests per eight-hour shift. The lab also operates the Rapid Automated Volume Enhancer (RAVE) which automates many of the manual steps in sample processing.

To date, the lab has done more than 300,000 PCR tests and has a daily testing capacity of nearly 8,000.

Parkway Pantai’s Gleneagles Hospital

HEALTHCARE ASIA

5

FIRST ELDER GROUPS DRIVE HEALTHCARE DEMAND MALAYSIA

Bumrungrad creates digital laboratories

THAILAND

The ageing population is in focus

Malaysia’s changing demographics have become a significant contributor in the increased demand for healthcare services, according to a Fitch Solutions report.

In particular, its growing ageing population is expected to bring heightened demand due to a high prevalence of non-communicable diseases (NCDs) in this age demographic. NCDs contributed up to 68% of the burden of premature deaths, majority of which occured in the 45-59 age group.

The report found that the proportion of the population aged 65 years and above has grown from 3.9% in 2000 to 5.1% in 2015, and it is estimated that the total elderly population in Malaysia will hit 2.4 million by the end of this year.

The country continuously faces a host of health-related issues that require active interventions from healthcare providers. The Ministry of Health is also proactively addressing these challenges by enhancing healthcare facilities and services in the country by allocating appropriate resources to empower the public health delivery system.

However, the rising demand is putting pressure on both public and private health funding regimes. In May 2019, Health Minister Datuk Seri Dr. Dzulkefly Ahmad announced that the ministry intends to use external reference pricing (ERP) to benchmark drug prices in Malaysia.

The Ministry of Health (MOH) could work with the Ministry of Domestic Trade & Consumer Affairs (MDTCA) on implementing the price control under MDTCA Price Control and Anti-Profiteering Act 2011.

This control mechanism, together with other barriers, may pose risk to the patient's access to latest and innovative medicines as multinational companies will be forced to delay or withdraw innovative medicines from the market due to the unfavorable business environment and barriers to market access, the report stated.

6

HEALTHCARE ASIA

B

umrungrad International Hospital, based in the heart of Bangkok, has created Thailand’s first digital microbiology laboratories.

The deployment includes the digitization of Bumrungrad’s core laboratory, which handles 60-70% of the hospital’s five million annual tests on around one million samples.

Currently, very few microbiology labs have fully digitized their operations due to workflow complexity and lack of electronic medical record (EMR) systems that support end-to-end lab processes or integrated workflows used in microbiology labs.

The hospital has been using InterSystems’ TrakCare Lab Enterprise, which integrates patient data within the EMR for improved clinical support and patient-centered workflows, and captures comprehensive operational data.

The digitization follows Bumrungrad’s go-live with the InterSystems TrakCare unified healthcare information system in October 2018 to support world-class care delivery throughout the hospital.

As a core function, microbiology labs culture and identify microbes and test their susceptibility to antibiotics to establish the best treatments for patients.

Bumrungrad International Hospital

The digital labs provide improved service delivery— making it easier for clinicians to deliver care

To digitize this process, Bumrungrad created a decision tree to map its microbiology workflows and TrakCare Lab Enterprise was configured to support them.

The product’s interoperability capabilities were also used to integrate with the BD EpiCenter microbial identification and VITEK antibiotic susceptibility systems via standard HL7 messaging. TrakCare Lab Enterprise now digitally manages the entire end-to-end testing process.

“The primary outcome is improved service delivery—making it easier for clinicians to deliver care, having confidence in the results with no transcription errors, and reporting results in a much more timely way,” said Jeremy Ford, Laboratory Research and Technology Director for Bumrungrad.

Bumrungrad said it will roll out further enhancements to TrakCare Lab Enterprise in its surgical pathology and referral laboratories later this year, with the blood bank following in early 2021.

CHINA’S HEALTHCARE R&D SPENDING TO REACH $49B BY 2023 China’s combined pharmaceutical and biopharma R&D spending is forecasted to grow at a compound annual rate of 23% until 2023 to reach $49b, according to South China Morning Post’s latest healthcare report.

By then, China’s pharmaceutical and biopharma R&D spending will account for 23% of the world’s total spending on drug discovery and testing.

Chinese biopharmaceutical sales have more than doubled since 2016 and are projected to reach almost $50b by 2021. China’s capacity to create best-in-class drugs could rival that of America and Europe before 2030, according to SCMP’s study.

Meanwhile, Chinese medical supplies has accounted for around $10b of the total exports in Q1, whilst the country is now manufacturing 40% of APIs used worldwide.

With an expenditure of $3.5t in 2018, China’s healthcare industry is the second-largest healthcare market in the world.

R&D is driving healthcare spending

RECOGNISING TRAILBLAZING INITIATIVES IN THE

HEALTHCARE SECTOR Nominate your outstanding initiatives and achievements and receive an accolade that you and your company deserves!

Deadline for submission of entries:

29 January 2021 For more information, contact Julie Anne Nunez +65 3158 1386 ext 221 julie@charltonmediamail.com

HEALTHCARE ASIA VIRTUAL CONFERENCE 2020

Experts in Asia’s healthcare sector reveal their COVID action plans

Healthcare leaders map out response to the next pandemic Several experts came together and discussed the pandemic’s effects

T

his unprecedented time has hit the healthcare sector the most as the pandemic propelled medical facilities to adapt to changes in a race against time.

In the first-ever Healthcare Asia Virtual Conference, industry leaders laid out the changes that happened because of the crisis and mapped out the possible future of healthcare. Over 100 participants from the healthcare sector attended the conference, led by 10 speakers and panelists, and was moderated by Healthcare Asia’s editorin-chief, Tim Charlton.

Healthcare institutions’ response to COVID-19 pandemic The COVID-19 pandemic has made drastic changes in the health sector from patient care, employee safety, as well as adopting new technology to better service the ‘new normal’.

ManilaMed has taken every

8

HEALTHCARE ASIA

opportunity to improve process efficiency without compromising delivery, said Dr Eduardo Eseque, ManilaMed’s medical director.

Without careful management and strategy, delays and poor patient experience are to be expected.

Dr Eseque added that ManilaMed has launched the Feel Better campaign and has been taking advantage of available platforms in disseminating health protocols and segments.

The Philippine National Kidney and Transplant Institute (NKTI) has also undergone drastic changes, as laid out by executive director Dr Rose Liquete, since NKTI is a transplant centre. Some of the measures they have implemented are admitting only renal emergencies, suspending organ donation and transplantation, outpatient pay and service, enforcing a skeletal workforce, and drafting the first NKTI COVID Manual.

The COVID-19 pandemic has made drastic changes in the health sector to better service the ‘new normal’

Some rooms were also converted to improvise negative pressure rooms, testing facilities were acquired, and tents were built on the hospital’s parking lots. Another part of NKTI’s transition to new normal is the launch of telemedicine, and its opening to non-renal medical and surgical cases.

On the other hand, The Medical City president and CEO Dr Eugenio Jose Ramos said the hospital gone by the 4As—agility, by identifying the core people who would call the shots in repurposing the floors of the hospital; adaptability, by being ready to admit both COVID and non-COVID patients; accountability, by taking care of the hospital staff; and making alliances, by collaborating with likeminded medical facilities such as the Pasig City Hospital.

The Medical City has also been implementing the Epidemic Response Team since 2014, born out of the

HEALTHCARE ASIA VIRTUAL CONFERENCE 2020 hospital’s experience with previous epidemics like the H1N1 virus, and it has greatly helped the hospital in dealing with COVID-19.

In 2014, TMC created the epidemic rapid response team, or ERRT, which had protocols and guidelines that would deal with epidemics. These protocols were born from experience in responding to the likes of H1N1 that spread into the Philippines last 2009.

“We had all these guidelines but after 2014 we kind of put it aside because there were no threats at that time,” Ramos said.

Ramos added that TMC followed the reports of clustering in December 2019 and the spread of the virus in neighbouring countries such as Thailand. On 20 January, TMC’s management preemptively activated the ERRT and started to talk about protocols and guidelines, as well as thinking in terms of a small-scale epidemic in the country.

“We were quite ready and then 30 January, the first case in the Philippines was reported and that jolted a lot of us, I think all of us, because we never expected it would reach the Philippines,” he admitted.

TMC then started the annual mock drills for ERRT and began to focus on global communicable disease.

The Mary Mediatrix Medical Center also has PCR labs and tents built outside its premises.

“We have met a local government and the provincial health office. We have formed the private hospital associations here in Batangas so we can solve our issues,” said Dr Robert Magsino, president and CEO of Mary Mediatrix Medical Center.

For Dr Noel Yeo, Parkway Pantai’s senior vice president of hospital operations, Singapore operations division, there are three learnings imparted by the changes brought upon by the COVID-19 virus.

Firstly, digitise healthcare to minimise contact; secondly, diversify to alleviate disruption of supplies during the next pandemic; and thirdly, establish knowledge-sharing platforms for hospitals around Asia Pacific so they can share best practices amongst one another.

As for Bangkok Rayong Hospital, senior executive member Dr

Gunnaphon Anamnart suggested that medical facilities should equip their staff with PPEs, psychologists for mental health screening, and a charity corner for sharing food.

For the physical we provide the PPEs. For mental health we provide psychologists to provide screening.

For socioeconomics, we have a charity corner. Since many supermarkets are closed, some employees didn’t get to store food, so we provided a charity corner for sharing to them,” said Anamnart, adding that aside from patients, employees should also be kept safe.

Hurdles and future paths CEO of Pun Hlaing Hospital Dr. Gershu Paul said the private sector took a huge blow as they also dealt with not just one pandemic.

“The private sector was hit badly.

We had to reconfigure our debt payments and cash flows. We have two pandemics, one the COVID and the one of the cancer, diabetes and infectious disease in our regions.

Dealing with these are eye-openers in the sector,” Paul said.

Clamors for universal healthcare systems are now louder than ever.

Maintaining it financially is a challenge governments must face. KPMG director of healthcare and life sciences Chris Hardesty said that sustaining healthcare 15% of the GDP is an ideal to strive for.

“We need to be a lot more creative by creating risk schemes. We’re looking at even crowdfunding, nationalized health savings accounts to encourage people to take accountability for their own healthcare. We should have a composite model like what Japan has done,” Hardesty explained.

With enough funding several panelists agreed that the next step would be adopting technology to help the healthcare sector in areas such as telemedicine. Managing Director & Senior Partner at Boston Consulting Group Zarif Munir believes that priority for most organizations is health equity.

“We have seen that digital has proven to work at scale. Rather than go to a hospital, they’ll enter the information digitally. We think that real world data can expand to have

The private sector was hit badly. Dealing with the crisis is an eye-opener in the sector

greater agility,” Munir explained.

Medical Director and Consultant ENT Surgeon of Prince Court Medical Datuk Dr. Kuljit Singh agreed that most health spending will be technological upgrades.

“In Asia we see a load of patients flocking hospitals for treatment.

Artificial intelligence is useful for diagnostic purposes. We just have to put these systems to guide doctors for diagnosis,” Singh added Preparation for the next pandemic COVID-19 has changed the way medical facilities work and some of those changes are here to stay.

According to Hardesty, the future of healthcare services requires great creativity, and there should be a shift from health-for-all (universal healthcare) to health-for-wealth (sustainability). Aside from the mindset shift, prevention should be a reality. “Investing in early detection and intervention is a method that pays for itself,” he noted.

Hospitals should also be designed conveniently for patients, according to Singh. These smart hospitals should be built to adapt artificial intelligence, whilst being human-centric at the same time.

“Patients today look at valuebased care, empathy and positive user experience, and [hospitals that] understand their needs and provide,” Singh added.

Workflow charts should be reconstructed, added Anamnart.

Hospitals must understand the nature of their staff and accept that there’s no one-size-fits-all approach in managing their emotional needs.

For Liquete, there’s also a need to strengthen regional transplant centres and promote research.

The conference was held last 27 October

HEALTHCARE ASIA

9

COUNTRY REPORT: THAILAND

Total healthcare expenditure to be 6.9% in 2020 from 6.3% last year

Thailand striving to lead the medical industry in Asia

The pharmaceutical market in particular is continuing to grow as the country focuses on medical exports

T

hailand is on the way to becoming Asia’s top medical market with the aggressive growth of its generic drug market and with several prominent pharmaceutical companies choosing the country as their base of operations in the region.

Generic drugs to dominate Generic drugs continue to dominate Thailand, with these medicines accounting for 60.7% in total prescription drug sales in 2019. Fitch Solutions projected a continuous period of growth in the generic drugs market until 2029.

But why only generic drugs? This is said to be because of Thailand’s underfunded healthcare system, with the government pushing to reduce drug prices in the country. This has impeded the growth of patented drugs in the past years.

Fitch Solutions said that they expected this trend to continue, due 10

HEALTHCARE ASIA

to the COVID-19 pandemic and other challenges in the economy that are expected to limit healthcare expenditure. This is in addition to Thailand’s greater drive towards cost containment as the country’s economy recovers from the crisis.

With this aggressive pricing policy, generic drugs will be the widely accepted medicine for most patients.

Thailand is limited by its poor regulatory environment that is defined by weak patent enforcement and an unpredictable, delayed reimbursement system.

Because of this, innovative drug makers in Thailand will simply lose their interest in setting up shops in the country.

Publicly funded patented medicines will be greatly scrutinised because of a new system that allocates funding. Additionally, pressure continues on pricing due to the country’s low per capita healthcare expenditure.

Thailand’s public healthcare funding system is complex and burdonsome

A demand for cheaper medicine would be imminent at the expense of the innovative market, according to Fitch Solutions.

Pharma exports on the rise Thailand is a key exporter of medicine with a large share of exports going to neighboring countries, such as Vietnam, Myanmar, Philippines, and Cambodia which account for 57% of the total. With several countries poised to expand domestic healthcare access, the demand in the pharmaceutical market is expected to be relatively high.

This is just one of the factors why multinational pharmaceutical companies have been motivated to invest in their Thailand operations.

They see the country as a means to expand their operations in tapping the market in Southeast Asia.

Japanese drugmakers in particular have expressed interest in establishing Thailand as their main manufacturing

COUNTRY REPORT: THAILAND site for producing and repackaging medicinal products for all markets in Southeast Asia.

Thailand is also receiving support from the newly formed Association of Southeast Asian Nations Economic Community (AEC) as the key exporter of medicine in the region.

However integration is expected to be done gradually due to disparities in regulatory standards between ASEAN members, harmonisation of pharmaceutical regulations, and the elimination of technical barriers that will allow drugmakers to better export products from Thailand. This allows drugmakers to better export their products from Thailand to other emerging markets, such as Indonesia.

Thailand’s pharmaceutical export value is expected to rise from $474.5m in 2019 to $502m by 2024, with a fiveyear compound annual growth rate of 3.1% in local currency and 1.1% in US dollar terms.

Though exports will see a robust growth, imports will still remain dominant in Thailand’s pharmaceutical market due to the lack of domestic manufacturers in Thailand, owing mostly to generic drugs domination of the local market.

This includes products such as erythropoietin, antibiotics, and cholesterol-lowering medications, with countries like Germany, US, and France acting as main importers.

Fitch Solutions further notes that right now, Thailand is an attractive country for drug manufacturers.

Domestic pharmaceutical companies are more focused on packaging of imported drugs and manufacturing generic drugs.

They have forgoed focus on research and development which have been left to international companies.

In addition, to facilitate more advanced biological products, the government has a complete regulatory framework to support local research and development activities from derivations of blood, vaccine, proteins to Advanced Therapy Medical Products (ATMP) such as cell therapy products, gene therapy products, and stem cell therapy products. This is alongside government backing, a high-quality medical system, and lower costs, making it a large

attraction to drugmakers.

With Thailand mainly controlling the export of medicine in SEA and its strong market in generic drugs, its aim in establishing itself as the medical hub of Asia might soon come in fruition.

Spending amidst a tough year The pandemic has put pressure on the government to spend more on healthcare. Fitch Solutions expects that the total healthcare expenditure will increase to 6.9% in 2020 from 6.3% last year, with the majority coming from the government.

This outlook continues to be a possibility as the government increases its healthcare expenditure, especially in the wake of the coronavirus pandemic resulting in more health-related spending through a fiscal package with several phases amounting to at least 9.6% of Thailand’s GDP. Funds have been allocated towards improvements in healthcare access for patients diagnosed with COVID-19. Some public venues were also converted into temporary hospitals. These measures expanded the supply of hospital beds as well as the capacity to take in and treat patients at short notice.

Part of the spending is with the National Health Security office listing COVID-19 under its Universal Health Coverage. The ฿1b ($32m) approved by the government will also be rolled out to support hospitals to fight COVID-19.

In August, Thailand launched its ‘new normal’ healthcare system that aims to build back better after the pandemic subsides.

The model for the health service made to strengthen the healthcare system and support health workers during the pandemic was developed by the Department of Medical Services and Ministry of Public Health with support from the World Health Organisation and the government of Japan.

Bangkok’s healthcare facilities as well as 12 regional health offices in Thailand are participating in this project for 10 months.

The year 2020 is very challenging for Thailand, especially with the

Thai exports dominate most of the markets for generic drugs in Southeast Asia

COVID-19 pandemic dragging the economy down, there will be budget pressures and restrictions in public spending, with the exception of healthcare which remains strong.

According to Fitch Solutions, real GDP growth contracted by 12.2% in Q2, from a revised contraction of 1.9% in Q1, bringing H120 growth to an average drop of 7.1%. The economic shock was mostly felt by the tourism and export industries.

Fitch Solutions projects the gradual recovering of domestic activities as authorities relax confinement rules and stimulus measures are made.

However, mass tourism will unlikely to resume until 2021; the external sector will negatively affect the overall economy and in turn will drive continued budget pressure and restriction in public spending.

Instead, public spending will concentrate highly on healthcare, a key policy area for the government.

Aside from pandemic-related efforts, Fitch Solutions expects the government to pursue its objective of establishing itself as the medical hub of Asia. This includes more effectively managing the country’s rising chronic disease burden and reforming healthcare delivery in line with the Ministry of Public Health’s 2016-2025 strategic plan for Thailand to become the foremost destination for the medical industry in four key areas of wellness, medical services, academic activities, and medical products.

Key healthcare drivers include expansion of health insurance cover; large-scale development of hospitals and other healthcare facilities; initiatives to increase participation of the private sector in the healthcare system; as well as government support for online medical services and smart technology.

Generic drugs will drive growth in the market

Source: Fitch Solutions

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COUNTRY REPORT: PHILIPPINES

PCSO is a major source of funding for hospital construction and medical devices procurement

Gov’t funding brings more opportunities for the Philippine medical device market Both public and private organisations are helping to fund COVID-19 responses

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he Philippine government is rolling out additional financial support for the country’s healthcare sector to amp up hospital services and facilities, and meet the needs of medical professionals during this stressful time.

From the time the country went into lockdown to contain the virus, hospitals and medical frontliners have been asking for more funding to supply and provide their patients, with or without COVID-19, the proper medical care they need.

For instance, the lack of isolation facilities, medical devices, and personal protective equipment (PPE) became the central outcry of doctors and nurses—on top of crumbling data systems in both private and government hospitals.

As the pandemic persists, the Philippine Charity Sweepstakes Office (PCSO) is laying out benefits and opportunities for hospitals 12

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across the country. In May 2020, they announced a PHP438m (US$9m) funding to 87 government hospitals in the Philippines for equipment and supplies needed to combat COVID-19, according to a report from Asia Actual.

Local medical device suppliers and manufacturers will also benefit from the funding. These funds are part of a PHP2.9b (US$60m) package, which has been allocated for the country’s national healthcare system, PhilHealth, to cover hospital costs for COVID-19 patients.

The PCSO is a government-owned corporation, which is mandated to provide funds for the country’s health programs, medical assistance and services, and other charities of national character.

Even though every year the PCSO is a major source of funding for new hospital construction and medical device and equipment purchases, it is

Glend Llantada

often overlooked by outside suppliers.

Every year, the PCSO is a major source of funding for new hospital construction, as well as procurement of medical devices and equipment.

Nonetheless, it is often overlooked by external suppliers.

“By charter, 35% of the corporation’s revenue goes to various healthcare charities and other social funds every year, which includes subsidising PhilHealth and helping hospitals purchase new equipment or supplies,” said Glend Llantada, Asia Actual’s general manager, Philippines.

In 2017, the PCSO donated PHP20m (US$410,000) to the Philippine National Police General Hospital for new medical equipment.

On one hand, the corporation posted revenues of PHP63.68b (US$125.6m), registering a 20% increase in revenue over the previous year.

In total, the PCSO allocated almost PHP2.1b (US$44m) for healthcare

COUNTRY REPORT: PHILIPPINES causes, and at the beginning of the COVID-19 outbreak, the PCSO has released almost PHP2.8b (US$58m) to help fight the virus by using different channels.

The Philippine Amusement and Gaming Corporation (PAGCOR) also announced their funding that would highly benefit medical device suppliers and manufacturers, according to the report. Although the organisation oversees casinos, e-games cafes, and bingo halls in the country, they also provide funds and donations amidst the pandemic.

Whilst the PCSO directly provides more financial support to the healthcare sector, medical device manufacturers looking to grow sales should still keep an eye on PAGCOR as it has rapidly grown in the last five years with an annual revenue of over PHP100b (US$2b) in 2018.

With its primary mission being to help the Philippine government in its nation-building programs, they have partnered with Okada Foundation in donating PHP25m (US$513,000) to the Philippine Heart Center and the Lung Center of the Philippines for machines, equipment, as well as medical supplies.

PAGCOR has also partnered with Resorts World Philippines Cultural Heritage Foundation (RWPCHFI) in funding PHP50m (US$1m) to procure 400 infrared thermometers and about 144,000 additional pieces of PPE; and the Bloomberry Cultural Foundation for PHP100m (US$2m) worth of equipment, quarantine and treatment facilities set-ups, and a polymerase chain reaction (PCR) machines for COVID-19 testings in the Philippines.

The Asian Development Bank (ADB) has also approved a PHP2.6m (US$125m) loan to help with the country’s COVID-19 response. The loan is part of the Health System Enhancement to Address and Limit (HEAL) project, which assists the Department of Health (DOH) in reaching the 75,000 daily testing capacity target by the end of 2020, compared with over 31,000 in August.

The project will provide medical equipment, such as electrocardiography machines and defibrillators, to 17 major hospitals

across the country and upgrade their laboratories and isolation facilities.

It will also supply ventilators, CT scan machines, test kits, chemical, reagents, and PPE to numerous DOH and government hospitals, as well as molecular laboratories.

Philippines as one of top medical device markets Amidst the pandemic, the country is still among the fastest growing medical device markets in Asia.

According to a 2020 report by Fitch Solutions Country Risk & Industry Research, the Philippines’ medical device market is forecasted to register a high single-digit compound annual growth rate (CAGR) in the next five years of 9% in local currency terms and 8.8% in US dollar terms, which should rise to PHP46.3b (US$952m) by 2024.

Regardless of the pandemic, the market is expected to benefit from a strong economic performance over the next five years. The report noted that the modernisation of hospitals and other key health sector development projects will drive the country’s market growth, whilst new medical device regulations is expected to strengthen the country’s regulatory environment.

These should drive up standards in line with the move to establish an internationally aligned regulatory system under the ASEAN Medical Device Directive, making the Philippines one of the most attractive markets over the coming years as it continues to develop at a fast pace.

Government undertakings The total health expenditure in the Philippines at current prices was observed to grow by 8.3% in 2018 amounting to PHP799.1b (US$16.4b), which is an increase from the 2017 figure of PHP737.8b (US$15.1b). These contributions are projected to further expand in the coming years with COVID-19, and enable the country to continuously manufacture more high-end medical devices in the future.

The government has expressed its interest in undertaking high expenditure on the healthcare sector, with an aim to broaden the

The market is expected to benefit from a strong economic performance over the next five years

coverage of Universal Health Care to automatically enroll all Filipinos in the national health insurance program and extend their PhilHealth coverage, which includes free medical consultations and laboratory tests.

Such a program made the Philippine medical device and equipment market skyrocket into high growth as several local manufacturers are entering into the market with their latest product offerings, and is forecasted to continue in the future.

In addition to this, the rising number of surgeries and improving healthcare conditions in the country will also augment the medical device market. With the high medical demand, this will allow the private healthcare sector to collaborate with public counterparts in providing improved services to Filipinos, which would impact the overall sales of the medical devices in a positive manner.

The rising prevalence of chronic diseases such as diabetes, cardiovascular diseases and cancer in the country—on top of the pandemic—requires effective diagnostic equipment in hospitals, which boosts the demand for imaging and diagnostic equipment.

The Philippine aging population is also going to affect the demand for orthopedic products, implants and assistive devices market in a positive manner, which will subsequently lead to more number of procedures.

In the report, it is forecasted that the medical device market will experience growth in the coming years as many local manufacturers are now entering the market with their innovative products.

Philippines’ Healthcare Spending

Source: Fitch Solutions

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ANALYSIS: HEALTHCARE FUNDING

ASEAN governments have 10 years to upgrade their healthcare funding programmes

Southeast Asia’s difficult journey to sustainable healthcare

The shift from universal to sustainable healthcare requires great creativity, according to KPMG’s Chris Hardesty

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ccording to the United Nations, universal healthcare should be implemented globally by 2030, which gives the ASEAN region less than 10 years to figure out how to achieve this. This time period is also about how long healthcare institutions can sustain themselves based on current financing models, Chris Hardesty, the director of KPMG’s healthcare and life sciences practice told the Healthcare Asia Virtual Conference in October.

However, it is to be noted that the future of healthcare will also require greater creativity, Hardesty added, noting that there will likely be a discernible shift from “health-for-all,” or universal healthcare, to “health-forwealth,” or sustainability.

There are issues in both the demand and supply sides of healthcare, Hardesty said.The level of demand for services is unprecedented. All

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Governments are facing an issue of unsustainable funding base

ASEAN countries are set to be officially “aged societies” within 20 years, with an annual loss of around nine million people yearly due to noncommunicable diseases (representing 30% of infectious diseases). This, combined with the current trend of markets spending less than 5% of their GDP on healthcare, will make for some incredibly complex funding problems in the near future.

Part of the issue is that governments are facing an unsustainable funding base. The tax collection is lower than the 15% GDP ratio target. Moreover, as much as 80% of healthcare consumers in some markets are part of the informal economy.

The out-of-pocket expenses that healthcare consumers face are also at a whopping 40% of total spending, double the target of 20%.

This has the effect of keeping households in poverty.

Universal healthcare would not be enough to cover these problems, said Hardesty. “Now, we should look beyond Universal Healthcare because these challenges, if not solved in the current design, mean that for the future generation, Universal Healthcare will become an even less fruitful effort.”

Greater creativity required There are a few aspects that should be touched upon in upping the current universal healthcare systems that are in place, Hardesty advised the Healthcare Asia conference delegates.

Firstly, he says healthcare should not be treated as a “cost”, but rather a “socioeconomic harnessing”.

There should be a mindset shift and recognition of the demographic dividends, and these should each be addressed as quickly and effectively as possible, he says.

ANALYSIS: HEALTHCARE FUNDING Prevention should also be made a reality through life-course immunisations, and the increase of the immunisation targets of existing healthcare policies. In addition, healthier lifestyles should be promoted across the ASEAN region much more extensively. Communal centres that encourage people to undertake regular exercise for better physical and mental wellbeing should be given priority.

“Investing in early detection and intervention is a method that pays for itself,” said Hardesty, though he noted that some governments have not been as enthusiastic as might be required.

He says many are concerned about uncovering diseases or healthcare issues that they are not yet prepared to effectively handle.

Hardesty likened this to those governments that are kicking the healthcare can down the road.

However, he also urged them to reconsider priorities so they will be better able to prevent, as well as treat these issues in the future.

Current healthcare services must also be brought to new levels, Hardesty added. With primary care still sitting on the bedrock of universal healthcare, the practice of self-care should also be promoted, he said.

This drives money-saving and individual accountability, while easier access to therapy and pharmacies are also key advantages of this.

Resource utilisation also needs a renewed focus, and could be improved by task-shifting and riding the waves of the digital revolution. There should be clinics where nurses are given more authority to deal with common and simple health issues, while thefurther development of telehealth and telemedicine services should also be on the agenda.

Investing in early detection and intervention is a method that pays for itself

Finding the perfect funding model Authorities can also begin to consider alternative purchasing models for healthcare services. There are several options that remain fit for purpose in the current market, Hardesty

says, including blended and bundled programmes, amongst others.

Furthermore, they should also assess the increasing value that medical technology innovation can bring to hospitals and healthcare operations.

Effective and equitable fundraising for sustainable healthcare requires a composite model. According to Hardesty, a mixed tax and premium contributions approach is one of the safest and most sustainable options.

Aside from that, other creative financing options should also be considered, such as amending healthcare public-private partnerships to involve social causes, having a multisectoral approach to individual savings accounts, latching to e-payment and making advances on crowdfunding platforms, as well as earmarking funding by sub-population categories.

Whatever the final result, governments should collaborate with private insurers in designing a future that ensures all have access to effective healthcare solutions.

The Medical City expands lifesaving treatment options for stroke patients Better Neurologic Outcomes for Major Occlusive Stroke through Mechanical Thrombectomy

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by stent and catheter devices in order to quickly restore perfusion of the brain tissue.

Dr. Erwin Jocson is an attending Interventional Neuroradiologist who rolled out a series of successful mechanical thrombectomy cases for TMC. He, alongside a highly efficient brain attack team, has helped Transforming stroke care, whilst pre-empting in reversing the major deficits of severely disabling and potentially fatal ischemic brain damage Mechanical thrombectomy is an image-guided strokes of the Acute Stroke unit.

“Mechanical thrombectomy has totally therapy where a clot that has occluded a large blood vessel in the brain is manually extracted changed the way we deal with stroke today,” said Dr. Jocson.

If there’s a hospital that can execute systematic and highly organised workflow for mechanical thrombectomy, it’s the TMC Enterprise that closely collaborates with its Clark, South Luzon, and Iloilo facilities in a seamless workflow coordination of experts especially its Brain Attack Team, emergency departments, and radiological facilities.

Similar to TMC Main, all three TMC hospitals have state-of-the-art Neuro Catheterization Laboratories where mechanical Onsite influenza vaccines have been a regular feature of Alliance Healthcare’s response thrombectomy procedures are performed.

stroke is a brain attack that affects about 15 million people worldwide.

It remains to be the leading cause of disability among Filipinos and the second leading cause of death in the country.

The standard of care for stroke has radically changed since 2015 after the establishment of mechanical thrombectomy as an effective treatment modality.

The Medical City (TMC) Main in Ortigas, Pasig has an ace upon its sleeve in providing the best possible outcome for patients who

may come in beyond 4.5 hours of stroke onset with its 24/7 mechanical thrombectomy service. TMC is one of the very few medical institutions in the Philippines capable of performing this procedure with at least 80% excellent functional outcomes.

HEALTHCARE ASIA

15

ANALYSIS: PHARMACEUTICALS

Pharma revenues are expected to grow by 11% in Southeast Asia over the next five years

Southeast Asia on the cusp of a new dynamic for pharma: CPhI The trade show host’s latest report breaks down the pharmaceutical industry’s transformation in Asia

M

any factors are transforming pharmaceutical markets in Southeast Asia (SEA)— ageing populations, growing healthcare expenditures, wider competition in manufacturing, as well as challenges in importing high quality ingredients and pushing exports forward to new markets whilst combating imports from regional pharmaceutical giants, India and China.

CPhI’s ASEAN Pharma Report: Opportunities & Threats 2020 and Beyond breaks down the findings of in-depth surveys carried out amongst pharmaceutical executives.

“To emphasise the size of the opportunity, within the next decade over half of the world’s middle class will live within a six-hour flight of Bangkok,” the report said. “In addition, free trade agreements with Australia and New Zealand have further opened up the region’s potential,” it added.

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The annual revenue growth in the SEA pharmaceutical market is forecast to exceed 11% over the next five years, with expected sales of $40b in 2020. The region presents potential for manufacturers that can effectively synergize good manufacturing practices (GMP) standards, competitive pricing, as well as an export strategy.

A glimpse of ASEAN pharmaceutical manufacturing The ASEAN economies have a reputable generics production capacity, and accounts for a large percentage of the region’s pharmaceutical revenues.

However, only a small percentage of manufacturers in SEA can manufacture active pharmaceutical ingredients (API) since there’s a heavy reliance on imported ingredients.

According to figures from Thailand’s Food and Drug Administration (FDA Thailand), of

Free trade agreements with Australia and New Zealand have opened up the region’s potential

the 142 domestic pharmaceutical manufacturers accredited with GMP standards, only 5% are capable of producing APIs. Whilst reliance on imported APIs is not unique to SEA markets, it does leave the market exposed to price fluctuations and accessibility from Chinese and Indian manufacturers.

Similarly, in Indonesia and Malaysia, finished production of generics dominates, supported by the imported APIs. More intensive focus on R&D ‘Thailand 4.0’ is an initiative launched by the Thai government to shift the country from being a ‘manufacturing hub’ to an ‘innovation hub.’ Whilst not solely focused on pharmaceutical manufacturing, this initiative has already seen state-of-the-art facilities set up at the Thailand Science Park.

The anti-malaria drug P218 has been codeveloped by Thailand’s BIOTEC research centre, an early benchmark

ANALYSIS: PHARMACEUTICALS success for what may become a larger part of the country’s pharmaceutical industry makeup.

However, regulatory alignment is still holding back international export potential in some parts of SEA. Nonetheless, several countries in the ASEAN region are now members of the Pharmaceutical Inspection Cooperation Scheme, which aims to harmonise inspection procedures across the globe by developing common GMP standards, providing training opportunities to inspectors, and facilitating cooperation between both regional and international organisations. Singapore, Malaysia, and Indonesia joined the scheme in 2002 and 2012, respectively, whilst Thailand joined in 2016, and Philippines and Vietnam have both shown good interest in completing the process of applying. Consequently, many generics manufacturers can expect to see increased costs as facilities are upgraded to meet the higher standards, but it will eventually lead to an upside of reduced duplicate GMP inspections.

Indonesia The country’s pharmaceutical industry is expected to see increased revenues, thanks to the introduction of the ‘Jaminan Kesehatan Nasional’ (JKN), a new universal healthcare scheme. Predicted increases in income per capita will also push sales of over-the-counter medicines in the following years.

But, what is significant for overseas companies is the government’s act of loosening ownership restrictions on domestic firms. Foreign investors are now able to own 100% of partnerships, up from 75%. Currently, 70% of drug manufacturers in Indonesia are domestic, but this figure is expected to decrease due to foreign investments of circa $20b over the next five years.

Philippines The demand for healthcare in the Philippines is rapidly increasing for many of the same reasons as most other SEA countries. An aging population and higher incidence of lifestyle-related diseases, along with a rising GDP per capita, will

see increased consumer spending on pharmaceuticals. The Philippine market will see a 4.5% annual growth over the next few years, according to IMS Health.

The country’s generics market is forecast to grow at an accelerating rate, thanks to a number of government reforms and the pending introduction of a Universal Health Coverage scheme that will see a basic level of healthcare available for all Filipinos in the future.

The country is also well set with its manufacturing base, with 14 of the world’s top 20 pharmaceutical companies owning manufacturing facilities in Philippines.

Generics manufacturers can expect increased costs as facilities are upgraded to meet higher standards

Malaysia The Malaysian Cabinet announced in May 2019 that external reference pricing will be implemented to benchmark drug prices at wholesale and retail levels, aiming to reduce costs for consumers. These price controls will cap trade margins for drugs in the country, which will have an effect on all players in the Malaysian pharmaceutical supply chain. The Pharmaceutical Association of Malaysia has concerns with the drug pricing strategy, notably that patient access to the newest medicines may be put at risk as international manufacturers may possibly withdraw their products from the market due to unfavourable business conditions.

Singapore In contrast with the majority of ASEAN countries, Singapore has a well-developed, mature pharmaceutical market, with a reputation for high-quality and innovative manufacturing services. The government has further supported development with a number of schemes to drive innovation. Most recently, it committed to investing $2.4b to improve manufacturing and engineering in pharmaceutics as part of a 2020 ‘Research, Innovation and Enterprise’ plan.

Singapore’s biomedical manufacturing output has increased subsequently by nearly 10% in the first half of 2019 compared to the

corresponding half of 2018. This has further established its reputation as a prosperous biomedical manufacturing hub.

Promising growth areas Biologics and biosimilars (except Singapore) are not currently seen as promising growth areas by the majority of respondents. Regional companies stated that the fastest growing segments are generics (47%) and patented small molecule drugs (33%), followed by biosimilars (13%) and novel biologics (7%).

International respondents largely followed this analysis identifying the market’s major potential in generics (50%) and patented small molecules (25%), with biologics (15%) and biosimilars (10%) some way behind.

With pro-generic policies and costcontainment initiatives in place, demand for solid dose formulations and newer emerging export markets for cheaper and branded generics offer the fastest returns.

Moreover, 20% of respondents stated they sourced from the United States and 5% from Japan.

Only 27% of companies looked into currently access ingredients domestically, indicating that local economies are struggling to compete with the lower cost of the large regional manufacturers.

PIC/S offering new opportunities?

Two-thirds of respondents in the research stated that they now have greater confidence in Thai manufacturing after it joined PIC/S in 2016. However, whilst manufacturers are adapting to meet standards, there may be resultant market consolidation as smaller

Product classes with best growth opportunities in SEA

Source: CPhI South East Asia

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ANALYSIS: PHARMACEUTICALS manufacturers are struggling to compete with larger manufacturesrs due to higher costs.

Enhanced reputation and higher standards mean 47% of respondents believe that small manufacturers have now become more globally competitive and ready to export. As a consequence, a third of respondents also believe consolidation amongst smaller manufacturers is likely to occur in the near to medium term. However, 47% believe that tighter regulations and cost restraints are already leading to lower profit margins.

Moreover, 80% of respondents believe the desire to control drug prices and to increase the availability of low-cost generic medicines by governments in the region will lead to increased investment in domestic manufacturing capabilities in the next five years.

Those able to achieve PIC/S standards will be able to sell more widely than they have been able to in the past. Whilst they can sell within the immediate economies regionally, achieving PIC/S standards also opens up the possibility of selling into Western markets.

This is reflected in respondents’ belief that growth in the sales of SEA-manufactured generics will come from either international sales (36%) or a combination of international and domestic sales (50%).

SEA’s newest pharmaceutical hub With the Thai government looking to make Thailand a leading pharmaceutical destination in the region, the Thailand 4.0 initiative is being rolled out—a sector-specific policy seeking to transform the Thai economy. According to an IQVIA report, the Thai pharmaceutical market is forecast to grow at a compound annual growth rate (CAGR) of 3.7% between 2017 and 2022, reaching $6m by 2022.

One change expected to accelerate the internationalisation of Thai pharmaceutics is the removal of mandatory purchasing of generics through the Government Pharmaceutical Organization (GPO). This has been met by an ambivalent response from regional 18

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The Thai government is looking to make Thailand a leading pharmaceutical destination in Southeast Asia

SEA Perception as Counterfeit Hub

Source: CPhI South East Asia

manufacturers, with 53% stating that the removal of GPO requirements has either helped the market become ‘more competitive,’ or has ‘set the price of goods.’ However, 47% believe this will have an adverse effect on domestic manufacturers.

The initiative is also looking into transforming the pharmaceutical industry into one driven by innovation. Many biomedical and pharmaceutical innovation centres in Thailand have already been established. Looking ahead, the Eastern Economic Corridor of Innovation is an ambitious $45b project launched by the government to support investment in the country, a primary objective of which is to help bolster R&D through state-of-the-art translational research facilities.

One major red flag when potentially investing in the SEA region is a discrepancy in regulations and standards across the region’s countries.

More than half of respondents believe that standardised regulations and harmonisation across all SEA countries would make the region more attractive for investment, with a further 30% citing that they have ‘agreed but that standardisation is already underway.’

Additionally, one of the risk factors identified by domestic respondents is an overdependence on foreign APIs, whilst international respondents seem largely unfazed by this.

Half believe this is the same situation for many international companies, and a further 20%

cited the situation is changing— governments in the region encourage domestic or regional sources to prepare against supply chain risk from China and India.

Conclusion CPhI’s findings suggest that SEA is improving quickly, and it may be on the cusp of a new dynamic for the pharmaceutical sector.

“The headwinds Southeast Asian markets have faced in the last few years appear to be easing at the same time as tailwinds accelerate,” the report said. “Significantly, the region’s international reputation is improving quickly, and increased opportunities are opening up for bilateral trade,” the report notes.

Generics and regional export opportunities look set for the best near-term CAGRs with international companies now more likely to partner with local assets. One of the report’s most significant findings, which could potentially lead to SEA becoming a global hub for pharmaceuticals, is the creation of European-style serialisation system to combat the prevalence of counterfeit products, the biggest area of potential concern for both regional and international companies.

Indonesia has been amongst the first to move with its serialisation scheme, expected to be rolled out between 2020 and 2025, and Singapore is exploring GS1 2D barcodes, but more are expected to follow quickly in the near future.

COVER STORY

Lorem ipsum dolor sit amet consectetuer Remote medical consultations have been on the rise throughout the pandemic year of 2020

COVID-19 pandemic paves way for teleconsultation in Asia Pacific

Telemedicine services have become a staple ingredient of the “new normal” in healthcare

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s COVID-19 continues to spread around the world, many of those who needed medical assistance turned to internet-based options for diagnosis and treatment.

According to the ‘COVID-19 Pandemic and the Digitalisation of Healthcare in South East Asia’ white paper released by IQVIA, the number of face-to-face medical consultations have sharply declined across the region, particularly in SEA, as remote consultations correspondingly increased.

“The crisis-related surge in the number of patients using telemedicine platforms and applications in the Asia-Pacific region is speeding the adoption of digital health tools,” said Vikram Kapur, leader of Bain & Company’s Healthcare practice in Asia-Pacific, and Alex Boulton, partner of Bain & Company’s Healthcare practice.

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Fear of contracting the virus and the increased availability of nonface-to-face consultation services have urged patients to seek remote health consultations, particularly in chronic disease management.

According to IQVIA, app-based telemedicine pushes forward the growth of remote consultations in countries with better infrastructure such as Singapore, Malaysia, and Thailand and in the management of chronic diseases.

Overall patient caseload will also increase, according to the survey with more than 400 healthcare providers across six countries.

Surveyed healthcare providers have an average experience of 11 years, comprising chronic disease specialists such as cardiologists and endocrinologists (45%); general practitioners and internal medicine specialists (31%); as well as pediatricians (24%).

Telemedicine adoption is expected to boom in Indonesia, Malaysia, and Singapore over the long run

Indonesia, Philippines, and Vietnam expect to see an increase back to the caseload of preCOVID-19 lockdown, but medical tourism in a stalemate will hinder the recovery rate in Singapore, Malaysia, and Thailand.

Moreover, backlogged consultations and delayed elective procedures will push demand for healthcare resources in the short run, prompting providers adversely impacted by the virus to turn towards remote consultations as a patient engagement channel.

Telemedicine adoption is expected to boom in Indonesia, Malaysia, and Singapore in the long run. Key enablers for this sustainable growth are increasing acceptance and evolving user-centric operating models that bank on convenience.

However, lack of clear regulatory guidance and telemedicine-specific guidelines from medical associations

COVER STORY will require cooperation between many stakeholders, so they can fully tap on these opportunities.

Impact on patient caseload Gradual lifting of lockdown restrictions across SEA has been implemented as coexisting with COVID-19 became the new norm.

Though most of SEA has now recovered in terms of hospital activity, medical tourism destinations are still greatly affected.

Lack of medical tourists due to travel bans prevents full patient caseload recovery in countries like Singapore and Thailand.

Only Indonesia exceeded the prepandemic outpatient caseload after the lockdown period at 116%.

On the other hand, Indonesia (122%), Philippines (115%), and Malaysia (101%) exceeded the prepandemic inpatient caseload after the lockdown period.

Meanwhile, deferred elective procedures are expected to crowd out healthcare resources in the near future.

Deferments of non-urgent consultations and elective surgeries adds to the decline in patient footfall witnessed during the lockdown. An increase is expected to cover the backlog as the COVID-19 situation eases up.

As for outpatient caseload, generalists logged 57% (during) and 96% (after), chronic diseases specialists managed 54% (during) and 99% (after), and pediatricians posted 55% (during) and 92% (after).

For inpatient caseload, generalists logged 79% (during) and 117% (after), chronic diseases specialists managed

The pandemic has triggered profound behaviour changes and adoption of innovative solutions

Outpatient and inpatient caseload in SEA

Source: IQVIA WellTrack market research n=484, IQVIA analysis

Outpatient and inpatient caseload by TA in SEA

Source: IQVIA WellTrack market research n=484, IQVIA analysis

60% (during) and 111% (after), and pediatricians posted 61% (during) and 83% (after).

Rise in remote consultations According to the paper, the pandemic has triggered profound behavior changes and the adoption of innovative solutions that will reshape a patient’s journey.

Some of these include strengthened online education for patients on disease prevention, encouraged health consultations via video, electronic prescription of drugs by doctors to patients, medication delivery services, and remote follow-ups for patients with chronic diseases. The number of remote consultations has seen a significant uptake during the COVID-19 pandemic, and remains at high levels even post-lockdown.

Malaysia has seen the highest spike in non-face-to-face consultations during the lockdown period at 608% and after it at 375%. This was closely followed by Singapore, which saw a 383% increase in remote consultations during the lockdown and 204% after.

Thailand logged a 352% (during) and 204% (after) increase, Philippines saw a 301% (during) and 190% (after) hike, Vietnam marked a 364% (during) and 162% (after) leap, and Indonesia recorded a 294% (during) and 161% (after) spike.

Generalists saw a 331% spike in remote e-consultations during the lockdown and 173% after it, whilst chronic disease specialists saw a 254% increase during the lockdown and 197% after it. Meanwhile, pediatricians saw a 281% hike during the lockdown

and 165% after it.

This COVID-19-induced uptake in remote health consultations is set to stay on a growth trajectory even after the pandemic ends.

IQVIA’s report also has shown the many types of remote consultations, as purpose-built telemedicine apps are not always the preferred channel for some markets where Zoom or Skype are available.

App-based telemedicine platforms, some of which have additional features such as drug delivery and long-term disease management, are mainly used in Singapore before (91%), during (82%), and after (91%) lockdown.

A strong correlation between the quality of infrastructure and the adoption of telemedicine in chronic disease management exists, as reported by the white paper.

Countries with a strong technology infrastructure and a high number of tech-savvy consumers, such as Singapore, are more likely to sustain adoption of remote consultations even after the COVID-19 pandemic.

Chronic disease specialties are expected to shift towards remote consultations across SEA after the COVID-19 lockdown, likely due to behavioral change amongst patients and positive impacts brought around by stakeholders such as encouragement from the government, insurance coverage, and more.

Governments have quickly made digital health platforms available to the general public as a tool to HEALTHCARE ASIA

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COVER STORY Breakdown (%) of non face-to-face consultation types in SEA

Source: IQVIA WellTrack market research, IQVIA analysis

contain the spread of the virus, according to Bain. Australia has extended Medicare coverage for telemedicine; South Korea has eased restrictions on telemedicine to treat COVID-19 patients remotely; and Japan has launched a free government-backed remote health service using digital health tools.

Indonesia’s Ministry of Health has also partnered with ride-hailing giant Gojek and telemedicine provider Halodoc for quick COVID-19 diagnostics even in remote areas.

Health insurers also added telemedicine services to standard policies, setting up special partnerships with telemedicine platforms to sponsor free consultations for clients.

Continued telemedicine adoption The key drivers of continued telemedicine adoption include increasing acceptance and convenience, both of which are likely to be sustained in the long run, said IQVIA. In Bain’s 2019 Asia-Pacific Front Line of Healthcare survey, nearly half of patients said that they expect to use digital health tools in the next five years, whilst 91% of consumers said they would use digital health services if the costs were covered by an employer or insurance provider.

“Patients with minor medical conditions are increasingly receptive to telemedicine as an alternative to face-to-face consultation,” added IQVIA in the report.

Meanwhile, the aging population drives up the demand for chronic 22

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disease management, which can be helped with telemedicine providers that facilitate compliance and longterm follow-up.

Healthcare providers are also conveniently able to connect with patients seeking immediate care, potentially reducing time spent in congested medical facilities.

Telemedicine will also help bridge the gap between physician demand and supply, as it will allow healthcare providers to reach and interact with patients with disability conditions or are in remote areas.

Operating models of telemedicine have evolved, now covering e-prescription and drug delivery aside from simple health consultations. These three-in-one integrated telemedicine services are available in Singapore, Malaysia, Thailand, Philippines, Indonesia, and Vietnam.

Two-in-one integrated telemedicine services with just teleconsultation and e-prescription are also available in all countries surveyed, except Vietnam. Meanwhile, standalone telemedicine services are only available in the Philippines, Indonesia, and Vietnam.

Digital health platforms in Singapore and Australia are also reporting a surge of activity, according to Bain. The number of daily users of MyDoc, a telemedicine platform headquartered in Singapore, rose 60% in February and more than doubled in March “Those benefits and the technology have been available for some time. But the pandemic

Telemedicine lays the foundation for a new era of care delivery, helping countries improve the quality of care

removed the behavioral and economic barriers to widespread adoption of telemedicine,” added Bain’s Kapour and Bolton.

Common adoption hurdles in telemedicine services use throughout the region have been identified.

These are lack of insurance coverage for telemedicine that will reduce the uptake amongst patients due to out-of-pocket costs, concerns over potential discrepancy in terms of the quality of care between face-toface and remote consultations, and concerns in data privacy via thirdparty platforms.

Other common hurdles include lack of clear regulatory guidance, and a lack of integration amongst different systems and programs.

Meanwhile, a limited access to high-speed internet and low smartphone penetration are hurdles present in the Philippines, Indonesia, Thailand, and Vietnam.

These hurdles can be overcome by multi-stakeholder collaborations within the telemedicine ecosystem: regulatory bodies with close communication, payers with tailored insurance plans, healthcare providers with improved care, and telemedicine companies with attractive platforms.

As countries start to recover from the pandemic and retool, telemedicine will support a safe and staged recovery, according to Bain’s Kapour and Bolton.

“It also lays the foundation for a new era of care delivery, helping countries improve the quality of care, hold the line on rising costs and do a better job of satisfying patient expectations,” they added.

Smartphone penetration vs. percentage change in number of app-based telemedicine caseload in SEA

Source: IQVIA WellTrack market research, IQVIA analysis

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EVENT COVERAGE

Find out who won at this year’s Healthcare Asia Awards Asia’s most prominent hospitals were once again recognised and honoured at the third Healthcare Asia Awards, which was done via video conferences throughout the week of 14-17 April, together with Healthcare Asia’s Managing Editor, Paul Howell.

Healthcare executives and representatives from Indonesia, Thailand, Malaysia, Singapore, and the Philippines took part in the virtual awards programme, including The Medical City, Femto Research Group, Fullerton Health, Sri Kota Specialist Medical Centre, St. Luke’s Medical Center, and Samitivej Hospital.

The event coincided with the inaugural Healthcare Asia Pharma Awards, which saw a diverse group of awardees selected from the region’s pharmaceutical industry, including from India, Pakistan, Singapore and the Philippines.

The awards were judged by an expert panel consisting of Chris Hardesty, Director, Healthcare & Life Sciences Practice, KPMG; Tan Boon Kai, Partner, Audit & Assurance, BDO LLP; Mairin Reid, Director, Life Sciences & Healthcare, Deloitte.

Healthcare Asia Editor-in-Chief and Publisher Tim Charlton extended his warm congratulations to all the winners. “Despite what’s going on right now, we are honoured to have gathered some of the industry’s best for the third Healthcare Asia Awards and the inaugural Healthcare Asia Pharma Awards. We recognise your efforts in this dire time, particularly our beloved frontliners and medical specialists. We thank you for constantly improving the quality of life and for prioritising better patient outcomes.”

Check out this year’s winners:

Hospital Kuala Lumpur Service Delivery Innovation Initiative of the Year - Malaysia Institut Jantung Negara Corporate Social Responsibility of the Year - Malaysia Island Hospital Diagnostics Provider of the Year - Malaysia Hospital of the Year - Malaysia ManilaMed - Medical Center Manila Service Delivery Innovation Initiative of the Year - Philippines Marketing Initiative of the Year - Philippines Mary Mediatrix Medical Center Patient Care Initiative of the Year - Philippines National Cardiovascular Center Harapan Kita Specialty Hospital of the Year - Indonesia Patient Care Initiative of the Year - Indonesia Service Delivery Innovation Initiative of the Year - Indonesia National Kidney and Transplant Institute Service Innovation of the Year - Philippines National University Health System Management Innovation of the Year - Singapore Health Promotion Initiative of the Year - Singapore Patient Care Initiative of the Year - Singapore Ninewells Hospital (Pvt) Ltd Facilities Improvement Initiative of the Year - Sri Lanka Service Innovation of the Year - Sri Lanka Pun Hlaing Siloam Hospital Service Delivery Innovation Initiative of the Year - Myanmar Patient Safety Initiative of the Year - Myanmar Hospital of the Year - Myanmar Quirino Memorial Medical Center Most Improved Community Hospital of the Year - Philippines RadLink Asia Pte Ltd Diagnostics Provider of the Year - Singapore

HCA Awards 2020

Samitivej Public Company Limited Hospital of the Year - Thailand

ADK Hospitals Pvt Ltd Employee Engagement of the Year - Maldives Facilities Improvement Initiative of the Year - Maldives

Sri Kota Specialist Medical Centre Facilities Improvement Initiative of the Year - Malaysia

Asian Institute of Medical Sciences Corporate Social Responsibility of the Year - India Bangkok Rayong Hospital Co. Ltd Employee Engagement of the Year - Thailand Health Promotion Initiative of the Year - Thailand Caroline Riady of PT Siloam International Hospitals Tbk CEO of the Year Femto Research Group Co., Ltd Service Innovation of the Year - Thailand Fullerton Health Primary Care Provider of the Year - Singapore Gosford Private Hospital Corporate Social Responsibility of the Year - Australia Employee Engagement of the Year - Australia Grandmed Hospital Corporate Social Responsibility of the Year - Mongolia 24

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St. Luke’s Medical Center - Global City Patient Safety Initiative of the Year - Philippines Employee Engagement of the Year - Philippines Management Innovation of the Year - Philippines St. Luke’s Medical Center - Quezon City Clinical Service Initiative of the Year - Philippines The Medical City Hospital of the Year - Philippines Customer Service Initiative of the Year - Philippines United Hospital Limited Health Promotion Initiative of the Year - Bangladesh Marketing Initiative of the Year - Bangladesh University of Santo Tomas Hospital Health Promotion Initiative of the Year - Philippines Corporate Social Responsibility of the Year - Philippines Yashoda Hospitals Clinical Service Initiative of the Year - India Marketing Initiative of the Year - India

HCA Pharma Awards 2020 Cipla Ltd. Marketing & Communications Initiative of the Year - India Glenmark Philippines Inc Marketing & Communications Initiative of the Year - Philippines Merck Sharp & Dohme (I.A.) LLC Digital Innovation of the Year - Philippines Patient Advocacy Program of the Year - Philippines

University of Santo Tomas Hospital

Oliver Healthcare Packaging Packaging Design of the Year - Singapore Pfizer Pakistan Ltd Corporate Social Responsibility Program of the Year - Pakistan Marketing & Communications Initiative of the Year - Pakistan Pun Hlaing Siloam Hospital

Fullerton Health

National Cardiovascular Center Harapan Kita

RadLink Asia Pte Ltd

ADK Hospitals Pvt Ltd

National Kidney and Transplant Institute

Mary Mediatrix Medical Center

Merck Sharp & Dohme (I.A.) LLC

Sri Kota Specialist Medical Centre

Institut Jantung Negara

The Medical City

Samitivej Public Company Limited

Oliver Healthcare Packaging HEALTHCARE ASIA

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OPINION

EMMA STERLING

COVID-19 spurs digital health revolution – can hospitals keep up?

T

he COVID-19 pandemic is testing hospitals and healthcare systems across the globe like never before. Public hospitals’ emergency and intensive care units have swollen to capacity whilst the resources for elective and outpatient care are redirected to aid urgent functions.

In contrast, many private hospitals and clinics have significantly reduced patient footfall. Social distancing measures have influenced patient behaviours, with many delaying surgery, cancelling GP and outpatient visits or seeking online alternatives for and the prescription and dispensing of medicines.

As a result, private hospitals will likely see revenue streams dwindle. Major private hospitals in the APAC region have already seen occupancy fall as low as 20%. Generally, 60% occupancy is the minimum needed to breakeven. So, private hospitals—many which operate without reserves—could face long-term viability issues. Asia Care Group predicts that without action, occupancy rates in private hospitals will hover between 25%-40% for the remainder of this year and into early 2021. Distressed assets are already beginning to emerge, and we expect to pick up in the latter part of 2020.

Conversely, health-tech innovators, often working with insurers, have rapidly identified new ways to ensure individuals are able to access care safely and efficiently. Digital health companies have used the ongoing pandemic as an opportunity to demonstrate how telemedicine, remote monitoring and pharmacy dispensing lockers can offer significant value to patients, whilst costing less than traditional services.

Telehealth has been the most rapidly adopted intervention for care delivery during the COVID-19 pandemic. AXA Asia was amongst the first insurers to offer free telehealth consultations, making it available to over 6.5 million people in Asia. The initiative is designed to support underserved populations with limited access to healthcare in rural areas. These direct partnerships with Asia’s top telehealth companies negate the need to collaborate with traditional providers to reach patients.

Diagnostic solutions also continue to develop at pace, aided by novel health industry partnerships that are likely to continue beyond the pandemic. Prenetics, a prominent Hong Kong DNA testing innovator, have partnered with insurers and other health investors to offer at-home testing for COVID-19. By contrast, less than half of private hospitals offer COVID-19 testing. For those that do, most follow the traditional approach of telephone-booking for test appointments. Whilst insurers and start-up health innovators are at the forefront of developing solutions, there is a danger that if unable to diversify from traditional business models and adapt to the rapidly changing health system, private providers will be left behind.

The pandemic has necessitated acceptance of health technology, that may well see a sustained paradigm shift in healthcare.

Private providers can expect a change in patient flows and patient expectations of care. For organisations to recover from the financial 26

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EMMA STERLING Senior Consultant at ACG, Hong Kong

Telehealth has became one of the most adopted interventions for care delivery

and operational hit of the COVID-19 pandemic, inventive digital strategy to increase market penetration and even diversify service offerings is essential.

Telemedicine is likely to remain a standard component of care delivery beyond the pandemic. Private hospitals and clinics could look to utilise telehealth platforms to broaden their reach to patients, previously inaccessible due to geographic proximity. In the Wuzhen Scenic Area in China, Ping An Good Doctor offers telemedicine through their “One-minute-clinic” consultation booths. Patients can enter the booths at any time without appointment and have a consultation delivered by an artificial intelligence (AI) doctor and then, a ‘real’ clinician for confirmation. Each booth is equipped with over 100 common drugs for immediate dispensing. For less common drugs, patients can order through the online service, to be delivered within the hour.

Private care organisations could partner with such innovators to broaden their reach but also reduce the need for costlyof costly setup and maintenance of traditional physical clinics. These and other remote consultation, monitoring and analysis platforms can support private care organisations experiencing low-volume, to reduce operational costs through pooling clinical resources and enabling round-the-clock service coverage at a lower cost.

To improve service efficiencies, the Japanese government is expected to invest more than $100m to build 10 AI-backed model hospitals by 2022. The aim is to reduce demand for traditional medical staff and combat the rising cost of medical care. Similarly, Singapore’s Changi Hospitals are exploring the application of AI robots to support automation of logistics, surgeries, and rehabilitation. These changes in care would not only reduce the need and cost of human staff, but offer quality, first-in-class care to distinguish their services from others in the private care market.

Clearly, the private health system is taking a sizable knock during the pandemic, which requires digitisation, new ideas and robust new partnerships to rebound from. If done right, not only can private hospitals overcome their current malaise, they can evolve with the rapidly shifting health system to position as front-runners in the health technology revolution.

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OPINION

CHRIS HARDESTY

Nextgen PPPs for Connected Healthcare in the Asia-Pacific

I

n healthcare (among other social sectors), many players advocate for Public-Private Partnerships (PPPs). And with good reason – according to research conduct by KPMG and the Asia Pacific Medical Technology Association (APACMed), whilst the medical technology industry may contribute upwards of 5% toward a country’s GDP, healthcare expenditure allocated toward the devices is typically less than 1% of GDP. PPPs are not new in healthcare – for decades such contracting has been used to build infrastructure, and increasingly to operate critical services. However, the future of PPPs is about more sustainable whole-system financing.

Medical technology companies are already evolving their business model to become more solutionsoriented, especially in the age of IoT and connected healthcare.

The time is ripe for PPP contracting to reflect the value that such innovation can deliver to a country’s health and economic strategy. Valuebased schemes have existed for some time in the pharmaceuticals space, and we can align similar dots for the medical technology ecosystem too.

“We must shift away from price-only and volumeoriented discussions, toward agreements recognizing and rewarding the value created by the industry in responding to healthcare needs,” said Yves Verboven, Director of Market Access & Economic Policies at the MedTech Europe trade association.

As of 2014, EU’s Most Economically Advantageous Tendering (MEAT) Directive 2014/24 came to life and so did MedTech Europe’s framework known as MEAT Value-Based Procurement. The framework aims to equip public and private sector with the tools for a more holistic view in awarding on the value being offered, and to foster the partnership dialogs therein.

“We must embed such a ‘value’ paradigm shift into our thinking and culture, in order to unlock valuebased healthcare and to adopt it into the day-to-day practices. This includes for patients, at hospitals, in community and workplace settings, and supporting high-quality, affordable care through introduction of the MEAT concept,” Verboven continued.

MedTech Europe estimate that 70% (and growing) of medical technology related procurement is still driven based on price point, with only 2% of tenders calling for negotiated procedures and open dialog for innovative partnerships.This article is a case study for how PPPs and“value-based” contracting schemes could work in the AsiaPacific context. The principles are already inherent in the system: improve quality over a more cost-efficient base. Now it’s a question of how to simultaneously balance the equation, not to pivot one element against the other. This article covers: setting a care pathway vision; zooming in on market and disease focus; and configurating a proposition. We focus on Diabetes for illustration, though the concepts can apply more broadly.

Step 1: Meet stakeholders where they are today, to help provide a vision for tomorrow 28

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CHRIS HARDESTY Director for the Life Sciences Practice, KPMG

Step 2: Zooming in on a particular market and PPP proposition Step 3: Configuring (not customizing) the proposition Learnings to keep moving forward Growing pains are never easy, the point is to try and learn along the way. Healthcare requires bold pioneers across the public and private sectors in order to design new models that will benefit the future generations. Bringing value-based contracting concepts under a PPP format for medical technologies is the right direction.Many people often use the data challenge as an inhibitor toward progressing along more novel “value” contracting mechanisms. Data in healthcare is and always will be a hot topic.

A few takeaways gained thus far from the initiatives, broken down by key stakeholder: 1. For industry companies: Maintain focus on the Asia-Pacific region. These are challenging markets, yet the unmet need is very high and thus novel forms of contracting can provide even greater demonstration of value.

2. For governments: Evolve healthcare services and medical technology purchasing to reward those players providing solutions to the ecosystem. Ensure proper frameworks and capabilities for assessing value.

3. For investors and other private sector constituents (e.g. telco, insurance): Get engaged in the discussion – the new wave of sustainable financing-oriented PPPs is a perfect social cause (e.g. impact bonds).

According to MedTech Europe’s experience, having the clean clinical evidence outcomes data to initiate contracting discussions is certainly one route to follow.

However, they’ve seen equal advancement in starting with the pathway archetype in mind, and collecting data along the way so as to iterate the contracting experimentation and to enable the true partnership agreements. The latter, more agile approach will lead to quicker wins in the Asia-Pacific context.

“Healthcare purchasing of services as well as medical technologies are the natural inflection point to make a real impact in value-based reform,” said Yves Verboven, MedTech Europe. “Such an effort must be driven from bottom-up as well as at the policy level, including dedicated multistakeholder working groups in the middle to build, test, and scale.”

We hope this article will foster more proactive dialogue across the region. Health and care are among the greatest gifts to provide to a population, so we must leverage the best of our collective publicprivate expertise.

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