The medical device industry is facing an accelerated pace of change on multiple fronts – technological advancements, reimbursement questions and regulatory change. In the Asia-Pacific region these challenges are becoming more prominent.
The market size for medical devices in the Asia-Pacific region is estimated to reach $88 billion by the end of 2020 and is expected to be the world’s second largest med-tech market after the U.S. and larger than the European Union, with potentially half of the world’s population. Medical device companies need to understand this growing marketplace. The projected growth is driven by various trends: an aging population, the rise of non-communicable diseases, an increase of public healthcare spending, an emerging middle class, a dynamic reform landscape and an untapped market potential.
But Asia-Pacific is a complicated collection of individual markets with systems that vary from country to country.
Here are some observations, gleaned from the “Global Markets Seminar” at the MedTech Conference in San Jose, Calif., in late September. Panelists included Fredrik Nyberg, CEO of the Asia Pacific Medical Technology Association (APACMed); Trevor Gunn, vice president-international relations at Medtronic; and Carol Yan, vice president, regulatory affairs at Johnson & Johnson Medical Asia Pacific.
Japan: There are many positives here including a more generous reimbursement structure, a robust innovation climate and a strong need for products that can serve an aging population such as remote monitoring, robotic technologies and integrated community care. On the other side, there are challenges: Neither the CE mark nor FDA approval may be automatically accepted in Japan; there is competition from products manufactured in Japan itself; and strengthened conditions exist for pricing and reimbursement.
China: There is a rise in income and an increased demand for premium products that can be customized for the market, but the “Made in China” government program gives domestic players an advantage. Still, 80% of the highly innovative products are currently imported. The State Council is encouraging a “two invoice” policy in place (maximum of two invoices between a manufacturer and hospital – each manufacturer will sell to a distributor and that distributor will sell directly to hospitals, eliminating multi-tiered distribution) and there are increasing pricing pressures.
ASEAN: There is also a high demand here for premium products. Markets are diverse ranging from an environment of high health expenditures in Singapore and Malaysia to low health expenditures in Myanmar. There are fewer local manufacturers than in Japan and China and this can represent an opportunity even if domestic competition is starting to grow, especially in Malaysia. However, serving different markets efficiently is complex and device makers may want to make choices and focus on key markets related to their products.
From a regulatory perspective: International med-techs may face different challenges in each of these markets. The regulatory landscape might be unstable or favor local players requiring foreign companies to have a clear understanding of the regulatory and reimbursement pathways and to stay up-to-date on changes. Also, the regulatory requirements are increasing in each of the countries. For example, ethnic groups are now required for Clinical Evidence Reports in China, and there are many more regulatory requirements across the entire APAC region.
For more insight into the Asia-Pacific med-tech landscape:
Read “Medical devices in Japan: Regulatory outlook for 2017,” a whitepaper developed by the regulatory team at Clarivate Analytics. Download here.
Stay up to date with the latest business, scientific, regulatory and clinical news from the medical device industry in Asia-Pacific and around the world with BioWorld MedTech, The Daily Medical Technology Newspaper.
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