• Health, pharmaceuticals, and medical devices opportunities in Asia are expansive and predicted to continue growing
• The Asian Pharmaceuticals market could surpass USD 300 billion in 2030 while the medical device market is estimated to reach USD 225 billion
• Each country has different rules and regulations while some provide incentives to foreign investors

There is no shortage of opportunities related to health, pharmaceuticals, and medical devices in Asia. Some countries lack the knowledge and technology required to produce instruments and medicines in demand locally. Other markets are looking to tap into areas such as medical tourism. Asian Insiders Managing Partner Jari Hietala explains what makes the health, pharmaceuticals, and medical devices sectors attractive to foreign investors.

The New Year usually brings with it resolutions related to health and wellness. These will be fads for most individuals. Something that falls by the wayside after a few weeks or, in some cases, days. Thankfully, this New Year trend does not apply to the health, pharmaceuticals, and medical devices sectors in Asia. Each is predicted to record impressive short-term growth as well as boasting strong long-term potential.

For instance, the Asian Pharmaceuticals market is expected to record revenues of more than USD 230 billion in 2024. Current growth projections would see this total surpassing USD 300 billion by the decade’s end.

It is a similar story in the medical devices sector, where Asia is the fastest-growing region globally. The sales value of medical devices here is estimated to reach USD 225 billion in 2030, up from USD 153 billion in 2023.

Another interesting health trend is medical tourism. Countries known as holiday destinations are tapping into various health and wellness activities. Currently, foreign providers and service companies are sought after to maintain market share and attract new patients.   

Stepping up pharmaceutical capabilities

Asian countries are exploring how the production of pharmaceutical products can be ramped up as they look to support various health-related initiatives. It should be noted that opportunities are not simply limited to large overseas players. Small- and mid-sized firms can also find success in select locations.

India is among the region’s most intriguing countries for foreign investment. Not only do policies support overseas investors, but the domestic and export markets continue to expand. The former is predicted to surpass USD 57 billion next year and upwards of USD 130 billion by 2030.

On the other side of the equation, exports of Indian-produced pharmaceuticals surpassed USD 24 billion in the most recent financial year, accounting for nearly six percent of the country’s total exports.

There are two options for foreign direct investment (FDI). The first, done under the automatic route that doesn’t require government approval, is to establish a subsidiary, build new facilities, and begin production. It is also possible to buy or lease an existing facility, although only 74 percent FDI is permitted under the automatic route, meaning the government must sign off on the project.

Medical devices witness growth

Several countries in Asia are emphasising medical device production in an attempt to improve domestic healthcare and potentially take advantage of global demand. Malaysia is an interesting example of this.

The sector was included in the New Industrial Master Plan 2030 (NIMP) which focuses on strengthening domestic production across various industries. Additionally, the government is directing funds to modernise public healthcare facilities. Both have created opportunities for overseas companies who may also benefit from tax incentives or other support initiatives.

Manufacturing higher value-added and complex medical products is a priority for the country as it looks to move up the value chain. Elsewhere, Malaysia is a global leader in medical gloves production, predominately latex and nitrile, and catheter production.

In Indonesia, the medical device sector market value is expected to rise from USD 3.5 billion in 2021 to USD 6.5 billion in 2026. The country has long been reliant on imports but has focused on ways to boost local manufacturing in recent years.

A major cause of this is the national health insurance scheme that currently covers more than 90 percent of the population. There is now an increasing demand for higher quality care and services which require greater access to advanced medical equipment.

Several options are available to foreign firms looking to enter the market, including manufacturing locally and partnering with an original equipment manufacturer (OEM).

Medical tourism: The next frontier?

There is no shortage of foreign investment opportunities in Asia’s health-related fields, but it is the rise of medical tourism that may be promising. Market size is forecasted to record a compound annual growth rate of nearly 15 percent over the next four years with the mid-term outlook equally bullish.

The opportunities related to medical tourism are diverse, both in terms of locations and potential contributors. ASEAN is the region a large number of investors look to, and for good reason. The ten countries account for a third of global medical tourist arrivals.

Thailand and Malaysia are seen as the regional leaders, although Singapore and Indonesia should not be overlooked. Each one has pros and cons for foreign investors to consider. Further afield, Japan is looking to restart efforts to expand its medical tourism sector while South Korea remains focused on cosmetic procedures.

Interest in this sector is driven primarily by healthcare providers. Major medical organisations from overseas are teaming up with local players in arrangements that offer benefits to both parties. One example is the strategic partnership between China’s Jinxin Fertility Group and Morula Indonesia.

Similarly, demand for innovative medical products and therapies unavailable in these countries is rising. With competition for patients increasing, facilities must stay competitive not only through quality of care but also available technology.

Finally, overseas hospitality firms, insurance companies, and tour operators are now active in supporting Asia’s medical tourism sector. Foreign firms with knowledge of multiple markets can serve as a key link for medical tourists and the country in which they are receiving treatment.  

Accessing the health, pharmaceuticals, and medical devices sectors in Asia

There are many investment opportunities in the health, pharmaceuticals, and medical devices sectors across Asia. Accessing these requires a detailed understanding of the market you are entering. Each country has different rules and regulations as well as opportunities and incentives. You will want to be informed of all these before making any decision.

Having a local partner can be the difference between a successful entry and one bogged down by unforeseen problems. They have a thorough understanding of the market in addition to the current state of play. For example, Asian Insiders’ robust network of partners can provide you with invaluable market research, connect you to key partners, and guide you through all the necessary processes.

To learn more about opportunities in Asia’s health, pharmaceuticals, and medical devices sectors and assess your readiness to enter the market, schedule a no-obligation call with Jari Hietala, Managing Partner: jari.Hietala (at)asianinsiders.com