2nd annual otc pharma asia 2012
TRANSCRIPT
Markets of Opportunities: Where to go next?
2nd Annual, OTC Pharma Asia, 2012
1
March 15, 2012
Dr. Milind Sabnis, MD, MBA
Principal Consultant
Healthcare, Asia Pacific
Agenda
• Introduction
• Global trends & impact on health care
• Key emerging OTC markets
• Summary
2
• Summary
GLOBAL TRENDS & IMPACT ON HEALTH CARE
3
GLOBAL TRENDS & IMPACT ON HEALTH CARE
From...
Provider Centric Focus Patient Centric
Centralized – Hospital Monitor De-Centralized – Shift to Community
...To
A modern healthcare system is on the horizon, demanding a paradigm shift
Healthcare Paradigm Shift
4
Invasive in general hospitals Treatment Less invasive in specialized hospitals
Treating Sickness Objective Preventing Sickness – “Wellness”
Source: Frost & Sullivan
F
M
T
O
Focus: moving from physicians to patientsF
M
T
O
5
Physician PatientsPatients are becoming:
• Aware of treatment/medicine choices
• Informed decision makers
• Responsible for their own health
Source: Frost & Sullivan
Hospital based careHospital based care Community based careCommunity based care
Innovation in hospital business models: Hospitals go virtual; development of community based care
F
M
T
O
6
Centralized model
Patient overload
Increased costs
Strain on health care resources
Decentralized model
Reduced patient load
Reduced cost
Optimum utilization of health care resources
Source: Frost & Sullivan
Virtual Hospitals: Shifting the Financial Gravity of the System
Healthy, Independent Living
Chronic Disease Management
Community Clinic
Doctor’s Office
100%
Assisted Living
HOME CARE
RESIDENTIAL
Qu
ali
ty o
f li
fe
Healthy, Independent Living
Chronic Disease Management
Community Clinic
Doctor’s Office
Assisted Living
Specialty Clinic
F
M
T
O
7
Cost of care per day
$1 $10 $100 $1,000 $10,000
0%
Skilled Nursing Facility
Specialty Clinic
Community Hospital
ICU
RESIDENTIAL CARE
Qu
ali
ty o
f li
fe
Skilled Nursing Facility
Specialty Clinic
Community Hospital
ICU
ACUTE CARE
Source: Frost & Sullivan
General HospitalGeneral Hospital Focused Focused Specialized HospitalSpecialized Hospital
Innovation in Hospital Business Models: Trends towards specialized care delivery around specific therapeutic areas
F
M
T
O
8
Value Proposition:
Don’t know what’s wrong?
– We can address any problem you bring
Value Proposition:
Need care for a specific condition?
– Specialists, experience, world-class facilities
Traditional operations
Long post operative length of stay
Specialized hospitals offering minimal invasive surgeries/ day surgeries
Reduces or eliminates length of stay
Source: Frost & Sullivan
Wellness of the body, the mind and the soul
Mind
Mood
Stress levels
Mental health
Sense of optimism
Attitude
Security
Safety
F
M
T
O
9
Body SoulPersonal values
Personal fulfilment
Self image / self actualization
Sight / vision
Touch & feel
Smell / breathing
Sound
Temperature
Wellness
Source: Frost & Sullivan
Health & Wellness: Better Health and Disease Prevention Opportunity for digestive and weight management products
The need for prevention and better general
health has driven the demand for
functional F&B products and consequently
the market for specific functional
ingredients
Global Weight Management Ingredients
563
2171
0
500
1000
1500
2000
2500
2008 2015
Re
ven
ue
s in
$ M
n
CAGR 2008-2015: 21.3%
Re
ven
ue
s in
$ M
n
CAGR 2007-2015: 25.6%
US Digestive Health Ingredients Market US Heart Health Ingredients Market
244
1310
0
350
700
1050
1400
2008 2015
10
Over the next 10 years, weight management, heart health, and
digestive health will continue to be the high growth sectors
Source: Frost & Sullivan
7500
13900
0
3000
6000
9000
12000
15000
2008 2015
Re
ven
ue
s in
$ M
n
Global Weight Management Ingredients
CAGR 2008-2015: 9.2%
Source: Frost & Sullivan
Health & Wellness: Better Health and Disease Prevention Opportunity for nutri-cosmetics (vitamins, hyaluronic acid, PUFA)
Skin Care, 26%
Hair Care,
Make-
Fragrances, 11%
Oral Care, 9%
Other Toiletri
es, 15%
The global personal care market in
2009 was estimated to be around
$250 Billion and expected to grow at
a CAGR of approximately 5-6% to
2015
The increasing focus on personal care not only drives
the market for active and inactive ingredients in
personal care products but also the market for
nutricosmetics
229
528
0
100
200
300
400
500
600
2008 2015
CAGR 2008-2015: ~15%
US Nutricosmetic Ingredients
Market
Re
ven
ue
s in
$ M
n
INCREASING FOCUS ON
PERSONAL CARE
F
M
T
O
11
203
330
0
50
100
150
200
250
300
350
2008 2014
CAGR 2008-2014: 7.2%
326
1066
0
200
400
600
800
1000
1200
2008 2015
CAGR 2008-2015: 18.5%
Chinese Personal Care Active
Ingredients Market
Indian Personal Care Inactive
Ingredients Market
Care, 25%
Make-Up, 14%
Others ,
50%
Omega
3 , 4%
Vitamin
s , 23%
Caroten
oids ,
23%
CAGR 2008-2015: ~15%
Nutricosmetics are Nutricosmetics are
products when ingested products when ingested
have an effect have an effect
(preventive or reactive) (preventive or reactive)
on skin, nails and hair. on skin, nails and hair.
The ingestion of The ingestion of
nutricosmetics is mainly nutricosmetics is mainly
through food through food
fortification / fortification /
supplements supplements
Re
ven
ue
s in
$ M
n
PERSONAL CARE
2008
Source: Frost & Sullivan
Why Wellness?
50% Percent of all diseases can be avoided and prevented by lifestyle changes
Only 31% of healthcare expenditure in organization is spent on direct medical costs
Medical Costs
Direct = 31%
Medical Costs
Workers
Indirect = 69%
Lost Productivity:- Absenteeism - Presenteeism
Employee & Customer Dissatisfaction:
F
M
T
O
12
69% of medical costs are due to productivity loss
50% of all medical costs can be saved with integrated and comprehensive health management.
Workers Compensation
Salary Continuation
Dissatisfaction:- Turnover + Temporary Staffing- Poor Quality
Replacement Workers:- Training Interim Employee- Administrative re-work
75% caused by chronic diseases that are preventable
Source: An Unhealthy America: The Economic Burden of Chronic Disease, The Milken Institute Center for Health Economics
Health and Wellness: Shift in Healthcare Trends From Treatment to Prevention
Healthcare Spending Per Capita (2007, 2050)
In most countries worldwide, per capita In most countries worldwide, per capita
healthcare spending is rising faster than per healthcare spending is rising faster than per
capita income which is unsustainable capita income which is unsustainable
If current trends hold If current trends hold -- by 2050, healthcare by 2050, healthcare
spending will double, claiming 20spending will double, claiming 20--30% of 30% of
GDP for some economies GDP for some economies
Prevention trends result in greater demand for areas such as weight management and functional foods and beverages
F
M
T
O
13
Due to rising costs of healthcare, future Due to rising costs of healthcare, future
spending will move away from spending will move away from
treatment treatment
Healthcare Spending by Type of Activity
Source: Frost & Sullivan
KEY EMERGING OTC MARKETS
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KEY EMERGING OTC MARKETS
South East Asia is Becoming World’s Hospital
Thailand�One Bangkok hospital
(Bumrungrad) served over 500,000 health tourists last year
Mexico�StarMedica hospital groups built 7
hospitals in last 5 years;�AmeriMed opening 10 new hospitals
by 2012; �GrupoAngeles (largest private
hospital group in Mexico) spending $700 million to build 15 hospitals in the next 3 years
Central Europe� Increased Medical Tourism Traffic
from Western Europe
Korea�New Entrants with strong
healthcare system offerings
15
Costa Rica�One in five visitors is a medical
tourist
Malaysia�Medical tourism as an
economic thrust
India�Government investing $3.6 Billion
in medical tourism infrastructure.�Estimates show Indian medical
tourism at $2.3B by 2012
offerings
Singapore�More internationally
accredited hospital facilities than any other country
Source: Frost & Sullivan
Increased Prosperity and Middle Class Consumption will Fuel Healthcare Expenditure
Other Asia9%
India4%
China2%
Japan8%
EU30%
US21%
Other26%
Middle Class Consumption (2009)
Other Asia14%
India23%
China18%
Japan4%
EU14%
US7%
Other20%
Middle Class Consumption (2030)
16
•Middle class consumption in China and India will surpass that of EU and US by 2030
•APAC will contribute to 59% of global middle class consumption by 2030, rising from 23% in 2009
•Over half of the middle class will be from the APAC region by 2020
•Both factors will be a major growth driver for HC expenditure and the growth of the HC delivery market as demand increases across the region
1810
36
22
28
53
2 26 5
0
20
40
60
80
100
2010 2020
Origins of Global Middle Class (%)
Middle East and North Africa
Sub-Saharan Africa
Asia Pacific
Central and South America
EU
North America
Source: OECD, Smith Barney, Frost & Sullivan
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
Pe
rce
nta
ge o
f A
ged
65
an
d A
bo
ve t
o
Tota
l Po
pu
lati
on
(%
)
Po
pu
lati
on
(M
illio
n)
By 2020, two-third of the Asia-pacific population over 65 years will have at least one chronic disease
Healthcare Industry: Population Aged 65 and Above, (Asia Pacific), 2009-2020
The Burden of Disease in elderly, Asia Pacific
17
0.0%
2.0%
-
50.0
2010 2015 2020
Pe
rce
nta
ge o
f A
ged
65
an
d A
bo
ve t
o
Tota
l Po
pu
lati
on
(%
)
Year
Aged 65 and Above (Million)
Percentage of Aged 65 and Above to Total Population (%)
� In 2010, 7.6% (241.7 million) of the Asia Pacific population was aged 65 and above.
� By 2020, this will be more than 9.7% (333.95)
� 65.2% of those aged 65+ have one chronic condition
Source: WHO, Frost & Sullivan
Globalization, consumerism, and prosperity are the 3 major trends that will impact healthcare
Globalization
Globalization:
• World is becoming smaller: cheap air- travel, connectivity,
internet, medical tourism
• Increased healthcare awareness because of multiple media
Consumerism:
• Increased self medicating behaviour; ease of access (online)
• Increased expression of consumer individuality through
brand choices
1
3
1
18
ConsumerismProsperity
brand choices
Prosperity:
• Increasing disposable income, financial independence
leading to exploring more choices
• Increased health awareness has led to consumers spending
more on health prevention and OTC
2
2 3
Source: Frost & Sullivan
8
10
12
14
16
18
Total Pharma & OTC market in SEAMEA, USD Bn 2011
Key emerging markets in SEAMEAU
SD
Bn
%
19
0
2
4
6
Total Pharma sales (USD bn) OTC sales 2011 (USD bn) OTC sales CAGR(2011-2015)
Source: Frost & Sullivan analysis, Data monitor, BMI, Deloitte,, EIU, NCB
US
D
Top market segments in key geographies
Indonesia
• Traditional medicines
• Topical / skin products
Vietnam
• Traditional medicines
• Cough, cold
Turkey
• Cough, cold
• Eye drops
• Vitamins and
Philippines
• Traditional medicines
• Analgesics
20
products
• Analgesics• Analgesics
• Vitamins and skin care treatment
In African countries the key market segments are analgesics, vitamins, and cough, cold medications
Source: Frost & Sullivan analysis, Data monitor, BMI, Deloitte,, EIU, NCB
Ease of doing business ranking
Ease of Doing Business Ranking
Saudi Arabia Mauritius Ghana Turkey Zambia Vietnam Kenya Uganda Tanzania Indonesia India Nigeria Philippines Malawai
12 23 63 71 84 98 109 123 127 129 132 133 136 145
21
Mauritius has a very small market (14m) with low growth (6%); Saudi Arabia market is ~350mn growing at 11%
Source: World bank
Challenges
Regulations /
RegistrationImporting vs.
Manufacturing
22
Distributors / End sales channels
Marketing / Consumers
Source: Frost & Sullivan
Summary
• Health care paradigm shift toward patient-centric model will
boost consumerism
• OTC markets in most emerging countries are expected to grow at
double digit CAGRs
23
• There are challenges in these markets; but these can be
overcome by adopting suitable market entry strategies
Opportunities exist; it is about making the right choices…
24
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25
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Thank you
Dr. Milind Sabnis, MD, MBA
Principal ConsultantHealthcare, Asia [email protected]
Donna Jeremiah,
Director, Corporate Communications Asia Pacific
61 2 8247 8927
26
Carrie Low
Corporate Communications
Asia Pacific
+603 6204 5910
Jessie Loh
Corporate Communications
Asia Pacific
+65 6890 0942