The information is taken from
the new IMS
Market Prognosis Asia 2002(IMPA)
report, which covers ten Asian markets: China, Hong Kong,
India, Indonesia, Malaysia, Philippines, Singapore, South
Korea, Taiwan, and Thailand.
Source: IMS Market Prognosis
Asia
In dollar terms,
most Asian pharmaceutical markets have fully recovered
from the crisis of 1997/98, despite many suffering from
the renewed economic downturn in 2001. The exceptions
are Indonesia, the Philippines and Thailand, where at
the end of 2001 the market value in dollar terms had not
yet regained its 1996 value. All three markets, however,
appear set to fully recover over the next two years.
Impact of local currency
vs. dollar
Currency fluctuations will
have a significant positive influence on several markets,
notably Indonesia, South Korea, Singapore, Thailand and
Taiwan, where the Economist Intelligence Unit forecast
an appreciation of local currencies against the US dollar,
which will boost market growth in dollar terms.
The stability of the currencies
of China and Hong Kong means that their growth rates in
local currencies and dollars will be the same or very
similar, while depreciation of local currencies against
the dollar will impact growth negatively in India, Malaysia
and the Philippines. In local currency terms, only two
markets – Indonesia and China – are expected to post double-digit
growth.
- China accounted
for almost 30% of the ten-market total in 2001, a share
that will remain fairly stable over the next five years.
- South Korea and
Indonesia will increase their market shares due,
in part, to exchange rate developments, at the expense
of countries such as India and Hong Kong.
- Indonesia’s recovering
economy is expected to gradually enable some of the
large untapped potential of its pharmaceutical market
to be exploited and it is forecast to replace the Philippines
as the fifth largest market of the ten by 2006.
- Taiwan will edge
closer to third place as its pharmaceutical market benefits
from an expanding economy at the same time as growth
in India remains slow.
Volume to emerge as main
driver of growth
Ethical market: During
the prognosis period, 2001-2006, growth in most Asian
pharmaceutical markets will be driven mainly by volume
rather than price growth. Apart from the expanding economy,
demographic and epidemiological trends, continuing strong
demand for ‘lifestyle’ products, as well as gradually
expanding access to healthcare will boost demand for medicines
while, at the same time, both public and private sector
healthcare providers will place increasing emphasis on
cost containment. Even the higher priced markets, such
as Hong Kong and Singapore, will see price growth severely
curtailed by intense competition in the marketplace
as well as new methods of indirect cost control. This
will affect both new product prices and the level of price
increases on older medicines.
Retail market: The
declining influence of price growth on overall pharmaceutical
market growth is especially apparent in the retail pharmacy
sector. In most Asian markets where separate retail pharmacy/drugstore
audits are available, price growth outstripped volume
growth as the main motor for pharmaceutical market growth
during the period from 1996-2001. This reflects the ‘boom’
before the 1997/98 economic crisis as well as price rises
to offset currency depreciation and inflation after the
onset of the crisis. During the forecast period, price
growth will slow in nearly all of the retail pharmacy
markets.
Hospital market: In
the hospital sector, prescribing and purchasing policies
will put downward pressure on prices – these will include
increasing use of tenders and competitive bidding, mandatory
use of generics, formulary restrictions, monitoring and
control of prescribing, increased patient co-payment and
use of diagnosis-related group reimbursement. In China,
South Korea, Taiwan and Thailand, market growth in the
hospital sector will be driven solely by volume growth:
price growth will be minimal or negative. Although volume
growth in China and Thailand’s hospital sectors will gradually
be boosted by expansion of healthcare insurance coverage,
this is likely to be at the expense of price growth.
Healthcare reforms to
shape markets in the longer term
Volatile economies, together
with demographic and epidemiological pressures, have brought
the healthcare financing systems in several countries
throughout the Asia region to the point of collapse. Hong
Kong’s Hospital Authority, which runs the public hospital
sector, has gone into deficit for the first time. There
are also financial deficits in the healthcare systems
in South Korea and Taiwan, while China is in the process
of restructuring the system of healthcare provision for
government employees.
Growing deficits and recognition
that healthcare delivery cannot be expanded or improved
without reform of healthcare financing systems have prompted
moves in several countries towards new ways of funding
health services. Approaches under consideration are largely
related to various forms of state or private insurance:
- China is introducing a
basic health insurance system for urban employees, under
which medical costs will be shared among employers,
employees and the state
- Hong Kong is considering
a medical savings scheme plus ‘top-up’ insurance
- Malaysia is expected to
introduce a National Health Insurance Scheme based on
corporate payroll taxes
- Thailand is considering
the transformation of its recently introduced ’30 baht
scheme’ into a National Insurance Scheme
- India has paved the way
for private insurance programs.
Few of these schemes will,
however, be in place within the next five years, mainly
because of the difficulties in obtaining the necessary
funding, aggravated by the recent economic downturn. Eventual
introduction and expansion of health insurance programs,
either state or private, will expand access to healthcare
and boost demand for medicines. But at the same time,
they are likely to focus attention on costs, particularly
pharmaceutical expenditure.
