Market Overviews

India’s healthcare industry has very strong long-term opportunities for investment. Although the level of care provided throughout the country varies widely the situation is improving largely through the private sector. As more large private hospitals and lab chains are emerging, the standard of care in the market is rising. The slow development of infrastructure such as water, power facilities, and transportation networks stunts private investment and is a risk that must be considered. As the insurance sector expands and a growing middle class is expected to reach 150m, many multinational companies are realizing the strong investment potentials within India’s healthcare industry.

China is undergoing a boom in laboratory infrastructure resulting from a sustained increase in government research budgets, investment by multinational pharma companies, and government healthcare funding initiatives. The annual growth rate of the pharmaceutical market remains consistently strong at approximately 20%. China is a highly localized and fragmented market, but the major local markets are very attractive. Due to this fragmentation, distribution is complex requiring localized strategy for comprehensive coverage. Qualified care giving staff is a significant problem, as is general access to modern healthcare. While pressure on the healthcare system may limit future growth, China’s growing middle class is expected to reach 700 million by 2020, which drastically increases the potential of many to afford healthcare.

India’s life sciences industry has many areas of strong growth. With approximately 45,000 labs in India within a highly fragmented structure, many opportunities exist. In the past five years the research environment has undergone a major transformation as a result of a change in government policy. In December 2008, Prime Minister Singh reiterated his priority to increase science and technology funding to 2% of GDP.Within a small base, research is booming. Clinical and research markets alone are growing 15-20%. Challenges to investment include lack of qualified labor due primarily to structural issues limiting incentives. This issue will be resolved over time but the lack of trained professionals needs to be considered as a risk to investment.

Vietnam’s healthcare industry has changed drastically over the past five years. Many companies are finding now the perfect time to invest in the second fastest growing economy in the world. Vietnam’s pharmaceutical industry is on a remarkable growth trajectory. The combination of increased government coverage, a growing middle class paying out of pocket, and major investment by global pharma companies have contributed to significant increases in drug expenditures. While healthcare infrastructure is weak, it is improving with plans for expanded government spending in 2009.

Asia is an immense opportunity growing in strategic importance. Foreign Direct Investment (FDI) inflows in Asia have been growing at 16%. Asia’s share of world FDI increased from 13% to 22%. Asia represents 35% of world GDP, containing 52% of the world’s population. Asia’s GDP per capita will double this decade. The region encompasses the entire gamut, from highly competitive countries to the most challenged, drawing an extremely heterogeneous picture with respect to the levels of growth and development achieved in the region. Nine Asia Pacific countries are among the top 30 in the Global Competitive Index rankings, led by Singapore (7th), Japan (8th), Korea (11th), and Hong Kong (12th).