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2009 is Healthy for Asia
Date:1/13/2009

Diverse impacts in the healthcare industry creates growth opportunities for healthcare and life science companies in the region

SINGAPORE, Jan. 13 /PRNewswire/ -- The credit crisis and the global economy meltdown has contributed to a significant shift in the Healthcare industry in 2009. Healthcare in Asia Pacific will not be affected as severely as the developed countries.

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Dr. Louis Payet, Senior Consultant of the Healthcare Practice, Asia Pacific at Frost & Sullivan says that Asia will also benefit from this crisis as healthcare companies in the US and EU come under significant cost pressure.

"Healthcare Indices, while declining, have still outperformed the broader market. This implies that investors are still expecting positive activities within the industry in this region," says Dr. Payet.

He further adds that as countries like Japan and Singapore are already in recessions and most other regional economies are slowing, the healthcare market is still experiencing positive growth.

He also added that the governments are also responding to the crisis by trying to stimulate economic activity through alleviation of lack of liquidity and then injecting further stimulated growth via interest rate cuts and increased government spending.

Dr. Payet on a separate note cautions that the symptoms of the downturn should not be taken lightly. While the cost of debt may fall in 2009 it is anticipated that accessing debt will continue to be challenging.

"Pharmaceutical and medtech companies should be better positioned to deal with this situation than other healthcare groups. These companies typically have stronger cash flows and a lower reliance on debt funding. This creates opportunities for expansion and acquisition," comments Dr. Payet.

Are healthcare companies going to suffer their losses as the consumer discretionary spending decline?

According to Dr. Payet, the healthcare industry is perceived more as a defensive in comparison to other industries. More often products are viewed as essential goods that should be less affected by cyclical economic events.

Mr Simranjit Singh, Associate Director of the Healthcare Practice, Asia Pacific at Frost & Sullivan estimates the Asian Healthcare market in 2008 to be valued at about US $240 billion with the largest contributor being the Pharmaceuticals at 66.2 percent followed by the Medical Devices at 21.2 percent, Biotechnology at 6.7 percent, Clinical Diagnostics & Healthcare IT at 2.1 percent & Medical Imaging at 1.5 percent. In 2009, the Asian Healthcare Market is expected to grow by 5 to 10 percent.

"Due to the greater healthcare costs pressures, 2009 will also see the paradigm shift in healthcare spend in Asia from being treatment centric to move towards the 3 P's of healthcare - Predictive, Personalised & Preventative healthcare," comments Mr Singh.

Mr Singh further elaborates that the financial crisis presents an array of opportunities to key players in the healthcare industry especially Pharma & Medical technology companies. In a recent interview the CEO of Merck, Mr Richard Clark, highlighted that one of the key goals of Merck in 2009 was to look at distressed biotech companies that would be able boost Merck's revenue and beef up its pipeline.

Several Medtech companies like Philips Medical & GE Healthcare are looking for growth opportunities in emerging markets and they have taken bold steps with acquisitions or JVs with niche Medtech players in China & India such as Meditronics, Alpha X-ray & Shinva.

2009 represents an opportunity for Asia to takeover the mantle of leadership from the US & Europe to become the key driver of innovation and profitability for Healthcare companies.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

    Contact:
    Jasminder Kaur
    Corporate Communications - Healthcare, Asia Pacific
    DID: +65 6890 0937
    Mobile: +65 9062 7051
    Email: jkaur@frost.com


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SOURCE Frost & Sullivan
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