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Uncovering the MedTech industry of East Asia

The Asian region’s healthcare industry has seen rapid growth over the years, with several countries becoming more known for its medically advanced institutions. The rise of the healthcare industry is largely attributed to the emergence of MedTech, a constantly evolving sector that utilises technology to advance the practice of medicine.

In Asia Pacific alone, the digital healthcare industry is projected to be valued at US$80.7 billion by 2025, making it one of the fastest-growing regions in the world, and its continued rise has been catalysed by Covid-19.

Over this period, more individuals were encouraged to stay at home, rendering them unable to step out and avail of healthcare services. Medical professionals capitalised on telemedicine to reach their patients and leveraged a range of digital technologies to monitor their health.

Apart from disruption to traditional healthcare delivery and management, research has shown that there are other key drivers of digital health acceleration in the region such as advances in digital health technology, cost pressure in healthcare systems, perception of the healthcare sector as a “safe haven” for investment amid economic downturn and requirement to provide personalised patient care.

Deirdre Glenn, Head of Life Sciences in Enterprise Ireland, stated that Covid-19 proved to be a double-edged sword for the MedTech SME sector. It posed a big challenge for non-digital medical devices and solutions and those needing face-to-face access to patients or clinicians.

Companies within the clinical trial space also experienced significant delays as many non-Covid-19 clinical trials were suspended. The summation of these various challenges eventually led to declining sales and a downturn in revenue for some companies.

Zooming into China, Japan and South Korea

According to Fitch Solutions,[1] three Asian markets in particular – China, Japan and South Korea – make up a sizable 15.6% of the global medical devices market. Baker McKenzie’s deal flow data also shows that digital health venture capital deals in Asia Pacific are largely centered on the major population centers of the three aforementioned markets, together with India.

The factors that propelled the rise of Asia Pacific’s digital healthcare industry still hold true in China, Japan and South Korea. However, additional factors such as ageing demographics, changing regulatory environments and increase in healthcare spending also helped spur the growth of the medical devices and digital health sectors in the three markets.

As a global leader in the Life Sciences sector, Ireland has a rich ecosystem in terms of specialised staff, managers, suppliers, advisers, and investors that allows sector companies to flourish. It is by far one of the best systems in an English-speaking area within the favourable European regulatory regime. The €45 billion annual exports of Ireland’s Life Sciences sector, across medical devices, pharma and bio, is a testament to their strong capabilities.

Enterprise Ireland currently supports 260+ Irish Life Sciences companies. In the Asia Pacific region, there are in excess of 170 instances of client engagement across 58 of these client companies. As the region delivers a strong promise for ambitious and innovative Irish Life Sciences companies, Enterprise Ireland recently organised the ‘Opportunities in Medical Devices & Digital Health – China, Japan & South Korea’ knowledge webinar where representatives from Aerogen, EKPAC Healthcare, Intralink, and Emergo by UL shared insights on how to grow in the medical devices and digital health sectors in these markets.

Understanding market requirements

The first step in business expansion is to understand the target market. This entails using available data and research to understand the market landscape, from regulations, current practices and challenges to industry organisations to potentially work with.

Talking to relevant industry stakeholders such as medical professionals and distributors provides companies an insider perspective on current market opportunities and challenges, allowing businesses to make an informed business approach.

Julie Xue, General Manager at EKPAC Healthcare, a procurement solution provider of advanced industrial technologies in Greater China, shared, “It’s crucial to work with a local partner on strategies, product registration, pricing, sales, and marketing when your knowledge and presence in the market is limited and you want to win out the competition.”

The Asia Pacific region is a diverse market, and China, Japan and South Korea each have their own set of regulations that businesses must comply to. Cybersecurity and data privacy are important, and regulators have started to set regulatory requirements to ensure health IoT devices are not only safe and effective but also secure.

In South Korea for example, the Ministry for Food and Drug Safety issued guidelines for medical device cybersecurity risk management based on US Food and Drug Administration’s guidance and recommendations. On the other hand, China’s National Medical Products Administration published draft guidelines for standalone medical device software including cybersecurity requirements.

Simon Strode, Business Development Manager at regulatory consulting firm Emergo by UL, said, “The Medical Device Regulatory landscape in Asia is constantly evolving. In order to bring products to the market faster while reducing regulatory and quality risks, companies need to have a clear regulatory strategy from the outset addressing issues like product classification, registration and required documentation.”

Building relationships and a network

Relationships are key in doing business in Asia, especially so in Japan and South Korea. By establishing rapport with relevant stakeholders, companies will have insider information and perspective to support business growth.

Ruslan Tursunov, Life Sciences Specialist at Intralink, a business development consultancy specialising in East Asia, shared, “Building trust and relationships are prioritised over a legal approach in Korea and Japan. By establishing a long-lasting relationship, you will have access to an honest customer/market feedback, insider information on upcoming tenders, and a good partner to even jointly develop your next generation products.”

Enacting localised responses in each market

Prior to entering the three markets, differences in language, relationships, product awareness and pricing already pose barriers to incoming foreign businesses. This is why a local presence and people on the ground are essential to managing the operations as they will help maneuver the business according to the cultural context as well as the current market environment. Furthermore, localised responses and solutions are crucial to a successful expansion, as the strategies used in other markets may not be as effective in the target market.

Irish aerosol medication delivery company Aerogen has operated in Asia for quite some time and is active in all three markets, having established local presence and worked with local partners to deliver their services in the region. Its Head of Asia Pacific, Tara Spain, said, “Some of our key learnings in the markets include setting a local presence on the ground early, making no assumptions on what you have done previously, and researching in advance for specifics like market access and environment.”

A complex but promising region

The Covid-19 pandemic prompted all sectors to place greater emphasis on healthcare and gave rise to rapid digitalisation, and there continues to be room for the digital health industry to further grow amid the current situation.

Doing business in Asia, especially in China, Japan and South Korea, is a complex process to undertake, mainly due to cultural differences. However, despite the region’s complexities, the wealth of opportunities it presents to Irish Life Sciences companies is far too promising to overlook.

Enterprise Ireland has offices in all of these markets – China, Japan and South Korea – with Life Sciences Market Advisers and any Enterprise Ireland clients in the Medical Devices and Digital Health sectors wishing to explore market entry or expansion may contact them to seek assistance.

[1] Fitch Solutions – 2020 Medical Devices Report (China, Japan and South Korea reports)

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