The Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration) by the Founding Fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand.
Brunei Darussalam then joined on 7 January 1984, Viet Nam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999, making up what is today the ten Member States of ASEAN.
The medical device markets in this region and the respective governments offer a variety of opportunities and incentives for foreign medical device manufacturers. Among them is the gigantic market size of the region, consisting of a population of 622 million people (and thus bigger than the population of the entire European Union with 513 million people).
The most convincing factors that make the ASEAN medical device markets extremely attractive and rewarding.
- A HARMONIZED REGULATORY MODEL – THE ASEAN MEDICAL DEVICE DIRECTIVE (AMDD)
In the past, the great variety in regulatory requirements for the different ASEAN countries have presented quite a challenge for foreign manufacturers. However, the ASEAN Medical Device Directive (AMDD) has made it significantly easier to penetrate the ASEAN markets collectively. The Directive has the goal of harmonizing the medical device regulations and common technical documents, as well as establishing a common classification system based on the devices’ risks. In that way, technical barriers and regulatory hurdles are greatly reduced and manufacturers will be able to quickly approach the entirety of 622 million people of the ASEAN region.
Registrations will still have to be completed individually for each of the 10 ASEAN countries. Yet, with the AMDD, common regulations concerning post-market surveillance, quality control and a Common Submission Dossier Template (CSDT) are being implemented. Thus, this allows manufacturers to attain faster market access to the various countries of the ASEAN region with drastically reduced costs.
- A SHARP INCREASE IN DEMAND FOR MEDICAL DEVICES BY A RAPIDLY GROWING MIDDLE CLASS:
ASEAN’s medical device markets are predicted to surpass many of the more well-established markets in the coming years. The steady rise of the ASEAN medical device sector is supported by
– a) a large and increasingly aging population (see item 3 below for further specifications),
– b) elevated government expenditures on healthcare (including universal healthcare systems and reimbursement schemes),
– c) and a significant growth of the middle class.
The main drivers of this growth had traditionally been countries such as Thailand, Singapore and Malaysia. However, based on recent observations from the past 5 years, other ASEAN nations – such as the Philippines and Indonesia – have seen higher growth rates of their respective medical device sales, averaging at around 10% annually.
- ASEAN’S AGING POPULATION WILL FURTHER SPIKE THE NEED FOR MEDICAL DEVICES AND ELDERCARE:
Besides the major impact of ASEAN’s rising middle class, the region’s elderly population is also rapidly growing. In the year 2016, 39 million people in the ASEAN region were above the age of 65 (amounting to 6% of the total population). However, this number will nearly double to 58 million people over the course of the next five years (2025). Therefore, a greater need for medical devices and treatment, especially concerning eldercare services and related diseases is to be anticipated.
According to the most recent dataset available by the world bank from 2018, the highest percentage of elderly people in the ASEAN region are to be found in Thailand (12%), followed by Singapore (11%), Malaysia (7%), and Vietnam (7%). By the year 2050, the percentage of those over the age of 65 is further expected to triple to 123 million people. Singapore is predicted to lead the list with a remarkable number of 33.6% of its population being over the age of 65 by 2050.
Such a fast increase in the elderly population will present a massive financial burden on the respective local healthcare systems. At the same time, it will alter the medical landscape in the ASEAN countries with diseases such as cardiovascular disease, cancer, dementia, and diabetes becoming more and more common.
- LOCAL MEDICAL DEVICE MANUFACTURERS ONLY COVER LESS THAN 10% OF THE ASEAN MARKET NEEDS:
One of the key opportunities for foreign manufacturers in the ASEAN region is the small competition from local medical device manufacturers. Many areas of the local medical device industry are not yet matured, especially the local production of high-tech medical devices represents a challenge. Therefore, the ASEAN nations are heavily dependent on medical device imports.
In fact, more than 90% of the medical devices in the ASEAN region are imported. The main importing nations to Southeast Asia are the United States of America, Japan, as well as Germany. Thailand peaks the list in this respect, as a striking number of 97% of its medical devices consist of imports. However, foreign manufacturers shall note that highly advanced and costly devices may not be particularly suitable for the ASEAN markets, as they may be unaffordable for large parts of the ASEAN population.
While significant gaps can be identified within the local ASEAN medical device industry, there are however also several strong points. Local production of medical devices in the ASEAN region is dominated by consumables as well as medical furniture. Thailand, for instance, is globally known for its expertise in medical devices such as test kits, surgical gloves, and syringes. More recently, the country has also put significant efforts into developing its position as a medical tourism hotspot in the region. At the same time, foreign manufacturers continue to find ample opportunities in Thailand, while the Thai government is even encouraging foreign manufacturers to produce locally by having established corporate tax exemptions.
The figure below further highlights what type of medical devices are most frequently being imported into the ASEAN countries. Products currently on high demand are “Diagnostic active devices” and “IVDs”. Particularly high-tech implantable or consumable devices, such as dental implants, guidewires, and catheters are popular foreign products.
Source World Bank Data – Export gov: Healthcare resource guide
