Southeast Asia's medical market will almost double by 2019

Medical manufacturing is one of the key growth areas in countries belonging to the Association of Southeast Asian Nations (ASEAN), according to an article posted today on the ASEANBriefing website. A rapidly expanding middle class is largely responsible for a projected near doubling of the medical device market in these countries, from $4.6 billion in 2013 to $9 billion by 2019.

Three ASEAN countries—Malaysia, Indonesia, and Thailand—account for approximately 65% of the current medical device market among the 10 member countries, according to Matthew Zito, Benedict Lynn, and Emily Liu of business intelligence firm Dezan Shira & Associates, who authored the article. The other seven are Singapore, the Phillipines, Brunei, Vietnam, Laos, Myanmar, and Cambodia.

Medical device markets within the region have been charting double digit growth rates in recent years, and will likely continue to do so, write Zito, Lynn, and Liu. "With the increased demand for better healthcare, encouraged by governmental focus on healthcare as a priority sector for trade and service liberalization . . . the upside market potential for medical devices in the region is immense," note the authors.

The individual medical device markets across ASEAN's 10 member countries are in various stages of development. Those with the greatest presence in the medtech market can be broken down as follows:

On the regulatory front, ASEAN member countries have made significant strides toward developing a mature regulatory framework for medical devices, both individually and regionally, according to the article at ASEANBriefing. In particular, a regional medical device directive, which is set to take effect on Jan. 1, 2015, aims to harmonize regulations across the 10 countries via legally nonbinding stipulations. This initiative is in line with ASEAN's goal to liberalize trade and investment in the healthcare sector. The AMDD will mark a significant step toward promoting easier access for medical device companies to the regional market of more than 600 million people, write Zito, Lynn, and Liu.

ASEAN countries currently remain reliant on imports to satisfy demand for medical devices: for example, as much as 97% of devices consumed in Indonesia in 2013 were imported, mainly from the United States, Japan, and Europe. Nevertheless, momentum is building for local manufacturing to transition toward more advanced products, as foreign companies move into the region to take advantage of lower costs and rising demand, according to Zito, Lynn, and Liu.