by Diarmuid Sexton, Adroit People
Asia’s growth as a manufacturing and outsourcing hub can be partially attributed to responses to pricing pressure from governments worldwide. Efforts to contain healthcare costs have increased pressure on manufacturers to rework their pricing strategies. These strategies have included outsourcing to CMOs and relocating R&D and manufacturing operations to low cost countries.
Close proximity to emerging markets, coupled with the region’s improved political and regulatory frameworks, also places Asia as the primary driver of growth for many healthcare manufacturers.
Fast-growing markets such as India and China are estimated to grow by 15-19% in the next five years. Aging populations, increased risk factors for chronic disease and general economic growth contribute to estimates putting China’s medical device market value at over US$42bn by 2019, while India’s is expected to reach more than US$10bn.
Other governments in the region have been actively encouraging participation of global resources in pharmaceutical research and development, spurring industry development in the region. The governments of Singapore, India, Korea, China and Malaysia have been investing heavily in their biotechnology, medical technology and manufacturing capability and support infrastructures resulting in massive investment from the global healthcare industry.
Malaysia is now the world’s 20th largest exporter and a very attractive location for production sites. Long-term stability coupled with low operational and wages costs has attracted significant investment from the life science and ICT industries.
It has a vibrant medical device industry with total exports exceeding RM8bn, or US$2.5bn, and the healthcare and biotechnology industries are earmarked to be key drivers of economic activity, with medical tourism forecasted to grow at CAGR of 20%.
Malaysia’s National Biotechnology Corporation has dedicated funds for investing in the sector and will collaborate with other agencies and ministries to attract more investment and joint ventures among local and foreign biotechnology companies. These initiatives, including Malaysia’s membership in the Pharmaceutical Inspection Convention and adoption of cGMPs sets the platform for world-wide acceptance of its exported pharmaceutical and medical products.
With drug makers seeking to reduce risk and development costs through partnerships with Clinical Research Organisations the sector has seen sustained increases in activity in the region.
In Korea, the National Enterprise for Clinical Trial (KoNECT) recently partnered with a global CRO to strengthen its infrastructure and capability to capitalise on opportunities in clinical research, a move which highlights one of the key issues impacting the region.
Marginal anticipated growth in European and US markets are accelerating strategies to secure footholds in the region’s still developing markets. Amid such rapid regional growth chronic skills shortages, high turnover in management positions and wages inflation are becoming significant impediments to businesses.
In view of this, getting the talent strategy right is one of the most complex and urgent challenges employers are facing in the Asia-Pacific marketplace.