Asia Pacific represents a challenging region for healthcare and pharmaceutical companies. Unlike the US or EU, which provide large, established homogeneous markets, Asian countries have their own diverse local laws and regulations. Many are influenced by geopolitical affairs as key policy drivers constantly shift the legal and regulatory landscape. Against this backdrop, respondents in our survey say that it is a real challenge to manage the often more restrictive foreign investment and product regulatory environment to manage complex supply chain and post entry marketing issues. Not to mention the need to manage compliance risks due to concerns over corruption in many parts of this region and keep up with evolving life sciences technology.
REGULATORY CHANGE: THE PULSE QUICKENS
Navigating Asia’s ever-changing regulatory environment while operating across markets is the top complexity facing healthcare executives and one that 76% say will receive considerable attention from corporate boardrooms in the year ahead (Figure 5). Waves of new laws and healthcare standards are being implemented and with these come various compliance costs and uncertainties. Failure to obey these new regimes could mean heavy penalties for corporations already struggling to operate in an environment of increasing competition and shrinking margins. Executives mention that while Asia Pacific poses vast market opportunities, launching a new drug or medical device is comparatively more complicated from a regulatory perspective than in Europe or the United States. For this reason, monitoring legislative updates and maintaining good relations with governments across the region will be a priority.
Parts of Asia Pacific are some of the most disaster-stricken in the world, and respondents recognize this vulnerability as a key complexity affecting most segments of the healthcare industry. With billions of people exposed to various natural disasters, infrastructure concerns constitute the secondgreatest challenge for healthcare corporations. Indeed, respondents say better and more reliable medical systems and response networks are required in the region’s emerging markets, as the number of destructive weather events and impact of intense natural disasters become a grave concern.
ENVIRONMENTAL CONCERNS
DIALING UP DIGITAL
Executives at healthcare corporations across Asia are adopting or developing an array of technologies and equipment to meet the region’s shifting demographics and increasing demand for medical services. However, many are finding it challenging to adapt, with driving such innovation internally a top complexity facing the industry. Respondents say that as healthcare becomes more digital, moving quickly to integrate new digital technology into existing infrastructure can give corporations a competitive edge.
To stay ahead in the transition to digital healthcare, corporations should embrace the latest revolutions in tech and also anticipate policy changes and the creation of new laws.”
Ben McLaughlin, Partner, Sydney and Head of Global Healthcare, Baker McKenzie
What else does Ben McLaughlin have to say?
The development of healthtech and demands for related backend support, while presenting challenges, also mean opportunities for players in the sector. We will likely see more businesses going from products to services, as we have seen for the TMT and other sectors.”
Isabella Liu, Partner, Hong Kong, and Head of Asia Pacific Healthcare, Baker McKenzie
TRENDS AND KEY COMPLEXITIES:
New laws and healthcare standards are being implemented across Asia, and regulatory concerns are among the top concerns for healthcare executives. Concerns over the ability to respond to natural disasters and extreme weather events is the second-greatest complexity. Digital technology and innovation can help executives unlock new potential within their organizations.
of respondents feel doing business in the healthcare industry is becoming more complex.
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48%
Figure 5: Which areas do you think will be a major focus for your industry in the next two years?
Healthcare companies also need to be proactive in managing compliance efforts, a process that includes managing distributors, agents and other service providers. While much of this will be based on having thorough internal compliance processes in place, a large part is also dependent on the due diligence of business partners, in particular understanding how business partners do business.”
Vivian Wu, Partner, Beijing, Baker McKenzie
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