The Asia-Pacific (APAC) region, home to seven of the world’s 10 most populous countries, is emerging as a key market for global medical device companies. This shift is underscored by the potential that the APAC region holds, reflecting a diverse population and a healthcare market projected to outpace the US and Europe. These insights, drawn from a recent report by KMPG titled “The Changing Landscape of the Medical Devices Industry in the APAC Region”, highlight key trends reshaping the industry.
The key role of medical devices in the APAC region’s healthcare boom
Within the growing demand for healthcare services, medical devices play a pivotal role. The APAC region witnessed robust growth in demand for medical devices, surpassing Europe to become the second-largest market globally. Rising income levels, swelling private sector investment, and government incentives contribute to the sector’s strong growth trajectory.
To fully grasp the opportunities in this dynamic market, companies are focusing on establishing comprehensive and efficient distribution networks. Each player in the value chain, from manufacturers to distributors, plays a vital role in ensuring the seamless functioning of the system from a regulatory and market standpoint. The region’s diverse landscape requires companies to analyse countries across the spectrum. This includes mature markets like Japan and Australia, countries with a growing population such as China and India, and emerging markets like Malaysia and Thailand. Understanding the nuances of each country’s value chain and regulations is crucial for international companies aiming to establish a network in the APAC region.
By 2023, China and Japan were estimated to continue leading Asia-Pacific in terms of GDP. Other markets in the region are also expected to see a significant uplift in real GDP growth, outpacing larger markets. India, Thailand, and Malaysia are poised to lead this growth trend.
APAC’s resilience amid global economic challenges
Despite global economic challenges, the APAC region remains a stronghold of growth, accounting for over 62 per cent of global GDP growth back in 2018. India and China, the region’s largest emerging economies, are projected to witness strong GDP growth rates. India’s real GDP is forecast to register a growth rate of 7.4 per cent in 2023, primarily driven by positive labour market conditions. China was projected to witness a growth rate of 5.6 per cent in real GDP in 2023, fuelled by government initiatives stimulating domestic consumption and infrastructure development.
The APAC region presents an evolving landscape for medical device companies. As the industry adapts to diverse markets and regulatory frameworks, the focus on innovation, quality, and a nuanced understanding of each country’s unique requirements will be critical. Navigating these opportunities requires a strategic approach and a commitment to addressing the evolving needs of the healthcare landscape in APAC.
APAC as a prime location for medical device manufacturing and sourcing
Furthermore, the region is a prime location for manufacturing and sourcing for global medical companies. The growth is further accentuated by rapid technological advancements and the recognition that these products create value for patients and value-focused healthcare systems. Market players, both domestic and international, are growing their investments towards innovation in the industry.
This comprehensive exploration of APAC’s medical devices landscape underscores the sector’s pivotal role in the region’s healthcare growth, necessitating a strategic and adaptive approach by industry players. The emphasis on tailoring products to specific genetic populations and the intersection of quality and affordability are vital considerations in a landscape where innovation and nuanced understanding are key to unlocking the vast potential of the APAC region.
Looking ahead
Sustainability is a long-term change that will impact the industry, according to the Frost and Sullivan report titled, “Asia-Pacific (APAC) Medical Devices Industry Outlook 2023”. Despite lagging behind their global counterparts in sustainability efforts, APAC medtech players are on track to meet the 2030 Sustainable Development Goals, with some aiming for carbon neutrality by 2025 or 2027.
The ongoing digitalisation of medical devices is a trend that will continue, as original equipment manufacturers will digitalise their devices and operations. This digital shift not only compels medtech participants to enhance the value proposition for healthcare providers and patients with digital data but also fosters the emergence of novel business models and disruptive technologies.
As APAC transitions from traditional approaches to healthcare innovation, a broad coalition of healthcare stakeholders is involved. This enables the exploration of innovative methodologies that combine diagnostics, medical devices, digital tools, emerging technologies, and pharmaceuticals. Opportunities will emerge as a result of increased inclusion of underserved patient populations, robotics adoption, and the transition of care from hospitals to home-based models.
The overarching goal is to orchestrate a comprehensive approach that optimises patient outcomes and elevates the standards of healthcare innovation in the APAC landscape.
