Healthcare & Medical Technologies Thailand Market Study
FEBRUARY 2017
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EU Gateway to Thailand
Central Management Unit
Thailand Market Study
February 2017
Submitted to the European Commission on 10 February 2017
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Table of Contents
LIST OF TABLES ...... 6
LIST OF FIGURES ...... 7
LIST OF ABBREVIATIONS ...... 8
EXECUTIVE SUMMARY ...... 9
ASSISTIVE TECHNOLOGIES ...... 9 MEDICAL DEVICES ...... 9 TELEMEDICINE AND E-HEALTH ...... 11 NANOMEDICINE ...... 12 DENTAL PRODUCTS ...... 13
2. WHAT ARE THE CHARACTERISTICS OF THAILAND? ...... 15
2.1 ECONOMY ...... 15 2.2 POLITICAL SYSTEM ...... 16 2.3 WORKFORCE ...... 18 2.4 CIVIL SOCIETY ...... 18
3. MARKET OVERVIEW AND EU ENTRY OPPORTUNITIES ...... 20
3.1 MEDICAL SECTOR OVERVIEW ...... 20 3.1.1 Hospitals in Thailand ...... 21 3.1.2 Medical Insurance Coverage ...... 23 3.1.3 Challenges Facing the Hospital Sector in Thailand ...... 24 3.1.4 Healthcare Financing and Expenditure ...... 25 3.2 ASSISTIVE TECHNOLOGIES ...... 28 3.2.1 Market Overview ...... 28 3.2.2 EU Opportunities...... 33 3.3 MEDICAL EQUIPMENT...... 35 3.3.1 Market Overview ...... 35 3.3.2 EU Opportunities...... 53 3.4 TELEMEDICINE AND E-HEALTH...... 60 3.4.1 Market Overview ...... 60 3.4.2 EU Opportunities...... 73
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3.5 NANOTECHNOLOGY HEALTHCARE ...... 81 3.5.1 Market Overview ...... 81 3.5.2 EU Entry Opportunities ...... 90 3.6 DENTAL PRODUCTS ...... 91 3.6.1 Market Overview ...... 91 3.6.2 EU Opportunities...... 97
4. REGULATORY FRAMEWORK ...... 101
4.1 MEDICAL DEVICE CLASSIFICATIONS ...... 102 4.1.1 Medical Device Labelling ...... 103 4.1.2 Advertising ...... 103 4.2 IMPORT LICENSE REQUIREMENTS ...... 103 4.3 REGULATORY RISK ...... 104
BIBLIOGRAPHY ...... 105
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List of Tables
Table 1: Overview of Thailand’s Medical Sector ...... 21 Table 2: List of Supplying Markets for Carriages for Disabled Person Imported by Thailand; Carriages for Disabled Persons, Not Mechanically Propelled ...... 29 Table 3: List of Supplying Markets for Parts and Accessories for Carriages for Disabled Persons Imported by Thailand; Parts and Accessories for Carriages for Disabled Persons, n.e.s.(not elsewhere specified) ...... 29 Table 4: List of Importing Markets for Carriages for Disabled Persons Exported by Thailand; Carriages for Disabled Persons, Not Mechanically Propelled ...... 30 Table 5: Thailand's Imports of Major Medical Devices, 2015 ...... 39 Table 6: Analysis of Medical Device Sectors ...... 40 Table 7: Thailand's Exports of Major Medical Devices, 2015 Source: UN Comtrade ...... 43 Table 8: E-medical treatments for each of these diseases ...... 63 Table 9: List of Supplying Markets for a Product Imported by Thailand ...... 93 Table 10: List of Supplying Markets for a Product Imported by Thailand ...... 94 Table 11: Market for Dental Appliances and Instruments by Type in Thailand, 2009-2020 ...... 95 Table 12: List of Importing Companies in Thailand for a Product ...... 96
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List of Figures
Figure 1: Medical Insurance Coverage in Thailand ...... 24 Figure 2: General Government Expenditure on Health, 2008-2014 ...... 27 Figure 3: Projected Medical Device Market, 2014-2019 ...... 36 Figure 4: Thailand’s Medical Device Import Sources ...... 41 Figure 5: Country of Origin for Instruments and Appliances Used in Medical, Surgery, Dental or Veterinary Sciences, 2015 ...... 42 Figure 6: Country of Destination for Instruments and Appliances Used in Medical, Surgery, Dental or Veterinary Sciences, 2015 ...... 44 Figure 7: Thailand's Super Clusters ...... 47 Figure 8: BOI Tax Incentives ...... 49 Figure 9: Thailand's Medical Device Value Chain ...... 51 Figure 10: SWOT Analysis for Medical Device Exporters ...... 55 Figure 11: Telemedicine Concept in Thailand: Doctors for all Households (Consultation 24x7) ...... 61 Figure 12: Consulting Hierarchy of Telemedicine in Thailand ...... 62 Figure 13: Nanotechnology Roadmap for Thailand ...... 83 Figure 14: Roadmap for Agenda 1.1 (Nanosensors for Diagnosis and Screening) ...... 84 Figure 15: Roadmap for Agenda 1.2 (Vaccines and Nanomedicine) ...... 85
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List of Abbreviations
AMDD ASEAN Medical Device Directive BOI Board of Investment BMA Bangkok Metropolitan Administration CAGR Compound Annual Growth Rate CoE Centre of Excellence CSO Civil Society Organisation CSMBS Civil Servant Medical Benefit Scheme DICOM Digital Imaging and Communications in Medicine EHR Electronic Health Records EMR Electronic Medical Records FDA Food and Drug Administration GDP Gross Domestic Product GMP Good Manufacturing Practice GMS Greater Mekong Sub Region HISRO Health Insurance System Research Office HPH Health Promoting Hospitals JCI Joint Commission International OBEC Office of Basic Education Commission ONTC Office of National Telecommunications Commission OVEC Office of Vocational Education Commission MoPH Ministry of Public Health NECTEC National Electronics and Computer Technology Centre NANOTEC National Nanotechnology Centre NCPO National Council for Peace and Order NIA National Innovation Agency NSTDA National Science and Technology Development Agency PCU Primary Care Units PwD Persons with Disabilities STI National Science Technology and Innovation Policy Office SWN Small-World Networks THAIMED Thai Medical Device Technology Industry Association TCELS Thailand Centre of Excellence for Life Sciences TSP Thailand Science Park TVET Technical Vocational Education and Training UCS Universal Coverage Scheme
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Executive Summary
Assistive Technologies
The market for assistive technologies in Thailand shows great promise for foreign competitors. The reason for this is two-fold: a scarcity of local suppliers of high-tech assistive technologies, and local producers lacking the relevant knowledge and resources to implement the complex production processes required in this sector. East Asian imports account for the majority of assistive technologies available in Thailand, with, for example, China leading in the overall share of imported wheelchairs.
Government organisations play a dominant role in the provision and distribution of assistive technologies in Thailand. For instance, the National Health Security Office is responsible for providing assistive devices for all disability types, such as the provision of prostheses, hearing aids, magnifiers, white canes and wheelchairs. The local presence of foreign companies operating in the sector is mostly limited to manufacturing bases and subsidiaries of larger East Asian firms. There are currently no EU companies operating in this sector in Thailand, presenting ample market opportunities for prospective firms.
Medical Devices
Medical devices constitute a thriving industry in Thailand, with the country acclaimed as a major healthcare hub in Asia. Products are imported and exported in large numbers, and Thailand presents a fertile ground for investment in new projects to manufacture medical devices, equipment and disposables. Growth prospects for the Thai medical device market appear strong; the country is moving towards comprehensive healthcare for all its citizens and the country’s medical tourism sector is booming.
In 2015, Thailand’s market for medical equipment was valued at USD 1.28 billion. The market is predicted to grow at a compound annual growth rate (CAGR) of roughly 12% between 2014 and
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2019, which would result in a rise in the market value from USD 1.1 billion in 2014 to 1.9 billion USD in 2019.
The vast majority of medical devices in the country are imported, with products from the US accounting for around one-quarter of inbound shipments, while Japan, China and Germany also play a significant role. In 2015, imports of medical devices increased 10.8% and exports of medical devices increased 8.5%, reflecting steady growth in Thailand’s healthcare sector despite an economic downturn.
American products have the lead in the higher-end medical device market, clinical diagnostic laboratory equipment market and biotechnology segments. All of America’s top 10 manufacturers have a sales presence in Thailand, with a number also operating factories in the country. They face strong competition, however, from European and Japanese companies.
Major international manufacturers already have a presence in the Thai industry, attracted by the kingdom’s strategic location as a regional hub and strong domestic market. These include: 3M (US), Bausch & Lomb (US), Baxter (US), Boston Scientific (US), GE Medical Systems (US), Guidant (US), Johnson & Johnson (US), Medtronic (US), Tyco (US), Sempermed (US), Safeskin (US), Kawasumi Laboratories (US), Cardinal Health (US) and Pacific Healthcare (Thailand).
Although the country has a substantial number of manufacturers, currently these tend to concentrate on a relatively small number of product categories. Progress is being achieved, however, towards upgrading local production of medical devices to reduce imports.
Market growth in the next few years will be driven by a demand for upgrades, an expansion of existing health care facilities and medical devices, as well as for the replacement of accessories. The following subsectors have been identified as those with the best prospects:
Cardiovascular devices
Clinical diagnostic devices
Neurological & surgical devices
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Orthopedic implant devices
Plastic surgery & dermatological devices
Rehabilitation equipment
Respiratory devices
Telemedicine and e-Health
While IT is pervasive in the Thai health sector, the promotion of e-health has lagged behind. There is no national e-health policy and applications of e-health remain fragmented. The market for e-health is small, with revenues in 2016 predicted to amount to EUR 36 million. Revenue is expected to show a CAGR of 18.1% over the period 2016-2020, resulting in a market volume of EUR 69 million in 2020.
The market's largest segment is the treatment of diabetes, with a market volume of EUR 2 million in 2016, followed by treatment of heart failure (EUR 1.6 million) and treatment of hypertension (EUR 0.5 million).
According to WHO Statistics, the telemedicine market in Thailand has witnessed strong growth due to increasing government expenditure in healthcare (5.6% of GDP in 2014). Thailand is home to one of the largest healthcare markets in Southeast Asia (2nd place in total expenditure on healthcare in 2015). There are currently more than 70 telemedicine investors in Thailand as of October 2016, with investments ranging from USD 3,000 to USD 50 million. The market is made up of IT companies from both Thailand as well as abroad, such as: GE Healthcare (US), IBM (US), B. Grimm (Thailand), Supreme Products Co., Ltd. (Thailand).
There is growing support for the installation and expansion of telemedical infrastructure on the part of the Thai government, presenting a good opportunity for foreign companies to enter the market. There are channels that European companies can consider which are tailored to the needs of customers in Thailand as well as its potential for development, such as:
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Tele-education: The delivery of continuing education programmes to rural healthcare professionals, for which the media could be audio, video and computer-based.
Telemonitoring: Home telemonitoring of Thai patients. An example of this could be the monitoring of diabetes patients. Cases of diabetes in Thailand are very prevalent (over 4 million in 2015), mainly in rural areas. Health companies can consider both telephones and telemonitoring using wireless technology to provide services for diabetes patients.
Telecardiology: Telecardiology is seen as a reliable and cost-effective means of risk reduction, when used for diagnostic purposes, particularly in comparison with long-term face-to-face monitoring. Since 2010, telecardiology has grown in popularity throughout the country, presenting a unique opportunity for newcomers, as more and more Thai people have become aware of the benefits of this method, with still only a few companies providing it in Thailand.
Other potential channels could include teleradiology and telepathology.
In providing e-health solutions to hospitals in Thailand, the formation of strategic alliances is a suitable entry channel for European companies. Strategic alliances would enable European companies to forge research and development arrangements, as well as distributions alliances, with Thai partners and agents. If the product is cloud-based, personnel requirements and operating costs will be low, but the company should expect the involvement of import agents and procedures for licensing and contracting.
Nanomedicine
Nanomedical technology in Thailand is currently at the early stages of its development. It is predicted that the market for nanomedicine is still many years from providing viable commercial opportunities for EU companies. However, the Southeast Asian region as a whole has been identified as having substantial growth potential. The National Science Technology and Innovation Policy and Plan includes Nanotechnology Roadmap 2 (2012-2016) and Nanotechnology Roadmap 3 (2017-2021). Nanotechnology Roadmap 2 has Health and Medicine as its primary research agenda – specifically the prevention, diagnosis and treatment
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of important diseases such as neurodegenerative and infectious disorders. Components to this include the development of sensors (for diagnosis and screening), vaccines, and medicine and medical materials.
The market for nanomedicine in Thailand remains in its infancy, which means that commercial opportunities for EU companies are limited as of now. The majority of EU institutions involved in nanotechnology in Thailand are in the field of research.
Dental Products
Thailand’s market for dental devices and materials is highly dependent on imports, which account for over 65% of available equipment. Local production is limited to consumables, toothpaste, waxes, artificial teeth and low-tech equipment, which are mainly exported to neighbouring countries.
The current growth potential for dental products is shaped by the improved access to health services gained by Thai citizens due to the Universal Coverage programme. After the implementation of this scheme, public dental clinics registered a large increase in their patient numbers.
According to analysis by the United States Commercial Service, public hospitals are the main end-users of dental equipment and supplies in Thailand. Major private hospitals also have dental departments, treating both local and foreign patients, who generally pay on an out-of- pocket basis as there is no private dental insurance coverage available (although some private dental clinics are contracted by the Social Security Office to provide services under the Universal Coverage Scheme). Private dental clinics depend on international patients for a significant share of their revenues. As a consequence, many private hospitals increasingly market themselves as specialised international health centres in order to attract more patients, particularly health tourists as well as expatriate workers and their families. Private dental clinics are usually operated by more than one dentist, with the owner making purchasing decisions.
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Although the market is small, the degree of penetration by international manufacturers is substantial, with products mainly supplied from the US, Germany and Japan.
Dental equipment and supplies are considered third-class or ‘General Medical Devices’ according to the Thai Food and Drug Administration, meaning they pose the lowest risk and so face the most lenient regulations (see Section 4 for further details on the risk classification system). These devices and accessories can be imported so long as they are freely marketed and sold in the manufacturing country. Accepted standards include those of the USFDA (US), CE Marking (EU), PAB (Japan) and TGA (Australia).
Dental equipment and accessories in Thailand are mainly divided into four sub-sectors: dental fillings, dentifrice/toothpaste, hand tools/hand pieces and dental chair units. US dental equipment and accessories lead the total import market with a share of about 34%, as they are considered to be of high quality as well as being competitively priced. US dental equipment is particularly well-received in Thailand due to the fact that many Thai dentists receive their specialised training in the US. In Thailand, the country where a dentist received his/her training is a good predictor of the country where they source their equipment from. As such, except for Germany, the competition from countries other than the US is very limited.
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2. What are the Characteristics of Thailand?
2.1 Economy
Over the last four decades, Thailand has made remarkable progress in social and economic development, moving from a low-income country to an upper-middle income country in less than a generation. In 2011, Thailand officially became an upper-middle income economy. The Thai economy is the second largest in Southeast Asia, after Indonesia, with a total GDP of USD 395 billion in 2015 and a per capita income of USD 5,732.1 Thailand is an established free- market export-driven economy that balances the promotion of FDI with domestic industry initiatives aimed at making Thai businesses into dynamic and competitive partners in the region. The service sector comprises more than 53% of total economic production and industry accounts for 40%. While agriculture – primarily rice cultivation – and fishing account for only the remaining 7%, they are responsible for employing a significant portion of the population. The unemployment rate was 0.7% in 2015.2 The country mainly exports manufactured goods (86% of total shipments), with electronics (14%), vehicles (13%), machinery and equipment (7.5%), and foodstuffs (7.5%) being the most important.3 State influence in the economy is represented mostly by state-owned enterprises dealing in energy and utilities, but also in the banking sector. After the 1997 Asian Financial Crisis, significant banking reforms that limit non- performing loans and speculation were adopted. Financial market reforms have aided the return of strong foreign investment and international trade with China, the US, Japan and Europe, which make up Thailand’s top export markets. Thailand has secured its place as being a manufacturing and services hub in Southeast Asia in high-tech sectors (particularly the biomedical, IT and automobile industries).
1 ADB (2015). http://www.adb.org/countries/thailand/economy 2 FocusEconomics (2015). http://www.focus-economics.com/countries/thailand 3 Trading Economics (2015). www.tradingeconomics.com/thailand/exports
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Since the 2009 Global Financial Crisis, GDP growth has been sporadic, with growth ranging from 6.5% in 2012 to 2.8% in 2015.4 Factors contributing to recent fluctuations include: cheaper manufacturing costs in regional economies, drought conditions affecting agricultural output, under-performing small and medium enterprises, and political conflict. The 2014 military coup and subsequent junta leadership has greatly impacted business confidence and foreign investment in recent years. In light of the slowdown, the state has played a larger role in generating GDP by increasing state consumption and investment as well as keeping interest rates low at 1.5%. These actions have kept GDP forecasts at 2.5% for 2016.5 The ability to reignite growth and the speed of economic recovery will depend on the extent to which Thailand can promote a more inclusive growth model. Future opportunities include: the expansion of trade through enhanced integration with the global economy, the promotion of growth by implementing transformative public investments to crowd-in private capital, the stimulation of domestic consumption, and improvements in the quality of public services across the country.
2.2 Political System
From the second half of the 20th century up until the present day, Thailand has officially been a constitutional democratic monarchy. The king serves as the head of state while the elected prime minister is head of the government’s executive branch, with an elected parliament serving as the legislative branch and independent judiciary. The Thai constitution serves as the overriding document defining rule of law. Political parties have primarily been divided along the lines of the more leftist “red shirts”, made up of mostly rural and low income people, and middleclass urban “yellow shirts.” Political participation has been very high, with each side voicing concerns over economic inclusion, equality and corruption. Aside from national defence, the military has the self-appointed role of defending the constitution. This has led to a precarious relationship between the military and the civilian government, breaking out in a total of 12 coups citing the need for the military to restore the constitution.
4 World Bank (2016). http://www.worldbank.org/en/country/thailand/overview 5 Ibid.
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The most recent military coup in 2014 ousted PM Yingluck Shinawatra over accusations of corruption and the misuse of power. The military established a junta called the National Council for Peace and Order (NCPO) to govern the nation while plans for future civilian elections are being negotiated. After dissolving the government and the senate, the NCPO vested executive and legislative powers in its leader, and ordered the judicial branch to operate under its directives. In addition, it partially repealed the 2007 constitution. From 2014 onwards, strict censorship and restrictions on freedom of speech and political activism have been imposed in the name of national unity. In August 2016, a public referendum approved a new constitution. The new constitution will bestow the military broad powers over future elected governments, including fast-track means to remove elected politicians deemed as corrupt or wayward. This will be accomplished primarily through a provision that would allow the military to sustain its outsized political role in a handpicked 250-member Senate, with six seats reserved for chiefs of the armed forces.6 The NCPO also established a military-dominated national legislature, which later unanimously elected General Prayut as the new prime minister of the country.7 This unwillingness to relinquish power to civilian control is an important distinguishing feature from coups of the past.
Thai people’s deference and respect for the monarchy, in particular King Bhumibol Adulyade, who passed away in October 2016, has played a large part in ensuring the country’s stability in the midst of frequent political change. On December 1st, his son, Maja Vajiralongkorn, was anointed, thereby ending decades of speculation and uncertainty over Thailand’s royal succession. The severity of Thailand’s lèse-majesté law prevented any open discussion of the new king’s suitability for the role, but privately the possibility of Vajiralongkorn being passed over for his more popular and dutiful sister remained a frequent topic of discussion. However, following the 2014 coup, the new military rulers appeared to work supportively with Vajiralongkorn to ensure his succession. While it is too early to determine what kind of king
6 The Diplomat (2016). http://thediplomat.com/2016/07/the-trouble-with-thailands-upcoming-referendum/ 7 Ibid.
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Vajiralongkorn will be, so much is clear that the cooperation between the government and the monarchy is paramount to ensuring political stability in Thailand.
2.3 Workforce
The Thai Ministry of Education has engaged in serious strategic scoping of future reforms in the higher education and Technical Vocational Education and Training (TVET) sectors, with an eye to producing a more capable workforce, able to transform the Thai economy into a knowledge- based economy. Three major, and growing, problems affecting the country’s workforce are: a decline in the size of the main workforce, an ageing population and a critical need for high- skilled technical workers. Performance-based funding in the sector, as well as increased collaboration between universities and the private sector, represent important steps towards solving these major issues (UNESCO, 2011). The gross enrolment ratio for tertiary education in Thailand (both sexes) was 51% in 2013.8 The evolution of tertiary education enrolment rates exhibits a constant positive trend over the past few decades (World Bank, 2016).
2.4 Civil Society
Traditionally, Thai civil society has been largely active and participatory at both the local (regional) and national levels. As mentioned before, political associations and loyalties to both the king and political parties result in a deep connection between the Thai people and wellbeing of the nation. Demonstrations, protests and rallies, as well as a substantial non-governmental organisation (NGO) network, are some of the tools utilised by Thai civil society to express opinions. A large number of international NGOs use Bangkok as their Southeast Asian regional headquarters.
However, recent political unrest has triggered a substantial rescinding of political rights and freedoms by the current military junta in the name of post-coup reform and stability.
8 Tertiary education includes universities as well as institutions such as colleges, technical training institutes, community colleges, research laboratories, etc.
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The government has increased anti-terrorism efforts as part of a regional trend to crackdown on recent Islamist-inspired terrorist attacks. Moreover, there is continuing engagement between the Thai military and rebels in the Muslim provinces bordering Malaysia. The threat of terrorism has given the government a pretext for stifling political dissent and expression. This has resulted in severe restrictions on opposition party formation and operation, as well as independent inquiry into political matters. Thai civil society will continue to be placed under stress in the near future, until democratic institutions are restored and able to function independently of military control.
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3. Market Overview and EU Entry Opportunities
3.1 Medical Sector Overview
Thailand is the second largest healthcare market in Southeast Asia after Indonesia, accounting for roughly 20% of the region’s medical expenditure. Over the period 2010-2020, the Thai healthcare market is expected to exhibit a Compound Annual Growth Rate (CAGR) of 8.7% and grow from EUR 12 billion to EUR 27 billion. Drivers of growth include: increases in government funding, private participation, medical tourism, increased income levels and an ageing population.
Thailand is one of the largest medical tourism markets in the world, with Thailand receiving millions of foreign patients each year.
The percentage of the population aged over 60 currently stands at around 15%, and this figure is expected to increase to 25% of the population by 2030. Healthcare services currently represent the vast majority of the Thai healthcare market, representing close to 75% of the total market value at EUR 17.4 billion. This is followed by pharmaceuticals at EUR 4.5 billion and Medical Devices at EUR 1.3 billion. Table 1 provides an overview of the public and private segments of the Thai healthcare sector.
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Public Sector Private Sector
Government health expenditure represents Private sector health expenditure 80% of total expenditure on healthcare represents roughly 20% of total services. expenditure on healthcare services
Most services are financed by universal Most services are financed from out of health insurance coverage. pocket expenses and private health insurance There are 1,043 public hospitals in Thailand. Private sector growths have been larger than public sector over the last years. The Ministry of Public Health is now reviewing the 885 hospitals under their Expansion is driven around construction of management. large hospitals mainly in Bangkok. There are 332 private hospitals. 44% are The Bangkok Metropolitan Administration has 9 hospitals under their management, located in Bangkok and 28% in and plan to construct more hospitals to surrounding provinces serve future demand within the Bangkok Bangkok Dusit Medical Services will area. increase its portfolio of hospitals from 35 to 50 by end 2015.
Table 1: Overview of Thailand’s Medical Sector
3.1.1 Hospitals in Thailand
Public hospitals in Thailand are run by the Ministry of Public Health (MoPH), while private hospitals are regulated by the Medical Registration Division under the MoPH. There are other hospitals that are managed by other government ministries (such as the Ministry of Defence), local governments, and public organisations such as the Red Cross. The hospital sector in Thailand registered strong growth up until 2008, predominantly due to the ‘30-Baht Scheme’ universal insurance coverage scheme, which significantly improved accessibility for poor patients. In 2001, the Government of Thailand introduced this scheme with the aim of ensuring
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equitable healthcare access for even its poorest citizens. For a flat user fee of THB 30 per consultation, or for free for those falling into exemption categories, every scheme participant may have access to registered health services. The exemption categories include: children less than 12 years of age, senior citizens aged 60 years and over, the very poor and volunteer health workers. The public sector accounted for over two-thirds of hospitals and beds. The private hospital sector contracted in 2009 due to the global financial crisis, but since then it has rebounded.9
There are 33 hospitals in the nation accredited and certified by the Joint Commission International (JCI). Government hospitals in Thailand are the main source of treatment for the general public, but the number of private hospitals has greatly increased in Thailand, going from 218 in 1986 to 491 hospitals in 1997 due to tax incentives offered by the government over the period 1992-1997 aimed at promoting private sector involvement in health services. Private hospitals faced economic hardships during the financial crisis of 1996-1997, and, consequently, only 298 private hospitals were left by 2004. This forced private hospitals to devise innovative marketing strategies and they began to target foreign patients. Due to competitive pricing, top-quality services and excellent hospitality, there was a surge in the number of foreign patients. In 2013, Thailand earned USD 4.3 billion in revenue from medical tourism, after an average growth rate of 15% a year over the past decade.
In terms of beds, public sector hospitals account for the majority share (70%) while the private sector (including both for-profit and not-for-profit hospitals) accounts for the remaining 30%. Apart from the type of ownership (public and private), the hospital sector in Thailand is segmented into four categories based on the position of the hospital and the class of patients it caters to. These are:
Premium market hospitals: These are private hospitals that provide high-end medical services catering to the affluent population. The target customers include medical travellers,
9 Phamax AG (2013). http://www.phamax.ch/Uploads/02082016040501AM.pdf
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expatriates and the high-income population. The Bumrungrad International, Bangkok and BNH hospitals are examples of these.
Upper mid-tier market: These are private multispecialty hospitals positioned for middle- income patients. Medical travellers, corporate customers and middle-income groups are catered to by this segment of the hospital sector. The Phyathai, Piyavej, Vejthani, Vibhavadi, Ramkamhaeng and Vichaiyut hospitals fall under this category.
Mid-tier market: These are private multispecialty hospitals with a provincial referral network which cater to corporate customers, particularly industrial workers. The hospitals in this segment are positioned for low to middle-income customers. The Paolo, Kasemrad and Chularat hospitals come under this category.
Not-for-profit hospitals: These are government-owned hospitals that cater to the low-to- middle income population and have a competitive pricing structure. Examples include the Siriraj, Ramathibodi and King Chulalongkorn Memorial hospitals.
3.1.2 Medical Insurance Coverage
Thailand operates a comprehensive medical insurance scheme which is divided into three categories: the Civil Servant Medical Benefit Scheme (CSMBS) which covers Government employees and their dependents – a total of around 7 million people; the Social Security Scheme (SSS) which covers private or temporary public employees, comprised of around 10 million workers; and finally the Universal Coverage Scheme (UCS) which provides free basic healthcare to the remaining 50 million Thai citizens that do not qualify for the CSMBS or the SSS.
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2% 14% Universal Coverage Scheme (UCS) 8% Civil Servant Medical Benefit Scheme (CSMBS)
Compulsory Social Security Scheme (SSS) 76% Private health Insurance
Figure 1: Medical Insurance Coverage in Thailand Source: ILO Social Protection Department
3.1.3 Challenges Facing the Hospital Sector in Thailand
Political unrest:
Thailand has witnessed many political coups in the past several years. This unstable political climate can adversely impact the hospital sector of Thailand. If political unrest continues in the future, medical tourists may lose confidence in Thailand’s security situation and begin to seek treatment in other countries.
Fiscal deficits:
A majority of the public hospitals continue to face financial deficits that have impacted their quality of service. The pressure on government hospitals to deliver quality healthcare services against a backdrop of fiscal deficit and rising demand, especially from patients under the
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Universal Coverage Scheme (UCS), which covers over three-quarters of the population (see Figure 1), will continue.
Another challenge that hospitals face is the surging geriatric population that is leading to an increase in the frequency of hospital visits and spending as well. The Health Insurance System Research Office (HISRO) estimates that healthcare spending for the elderly in Thailand is likely to increase from 34% to 37% of total spending in the next decade.
Shortage of healthcare professionals:
The booming medical tourism industry has resulted in an increased demand for qualified and multilingual healthcare professionals. Intense competition and spiralling demand (in both private and public hospitals) have resulted in a scarcity of quality healthcare professionals, resulting in increased staffing costs and thus denting profitability. Perennial problems like the brain drain of healthcare professionals compound the problem.
Risk of lawsuit:
In 2008, the government introduced the Act on Court Proceedings for Consumer Cases that empowered consumers and patients to sue healthcare service providers. Although most healthcare service providers are insured, they run the risk of incurring litigation costs due to growing customer awareness of their legal provisions.
3.1.4 Healthcare Financing and Expenditure
The majority of healthcare expenses in Thailand are financed by the government, which is in stark contrast to its neighbouring lower-middle income countries, where the private sector finances the bulk of healthcare spending. Amongst its peers, Thailand ranks highest in terms of public healthcare outflow (78% in 2014) followed by Malaysia (55%) and Vietnam (54%). In the coming years, as private hospitals continue to proliferate in Thailand, the participation of private players in Thailand will no doubt surge correspondingly, resulting in greater private healthcare spending.
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Thailand has been relentlessly striving to strengthen its healthcare infrastructure and improve its quality of life. The MoPH is responsible for the majority of financing in this domain. In 2014, 78% of Thailand’s total healthcare expenditure was from the public sector, while the private sector contributed 22%.10 Major sources of healthcare funding in the country include:
The MoPH
Other ministries
Public employee medical benefits
The Workmen’s Compensation Fund
State enterprise employee medical benefits
Private insurance
Foreign aid
Private households
Over the years, there has been a marked increase in government spending on healthcare, whereas the proportion of out-of-pocket spending has declined. Government spending on healthcare increased from THB 270 billion (EUR 7.1 billion.) in 2008 to approximately THB 390 billion (EUR 10.4 billion) in 2014 (see Figure 2). There has been a shift in the sources of healthcare financing, with the increase of government and private health insurance in Thailand. Healthcare financing increased at a CAGR of 6% from 2008 to 2014. Out-of-pocket health expenditure (as a percentage of total health expenditure) declined to 12% in 2014 from 15% in 2008.
10 World Health Organization (2014), Global Health Expenditure Database. http://apps.who.int/nha/database
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14
12
10
8 Government Expenditure on
Health (USD Billion) 6
4
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0 2008 2009 2010 2011 2012 2013 2014
Figure 2: General Government Expenditure on Health, 2008-2014 Source: World Health Organization, Global Health Expenditure Database.
Among Southeast Asian nations, Singapore ranks number one in terms of healthcare per capita expenditure, followed by Malaysia and then Thailand. Healthcare-related expenditure has been on the rise and comprised 13% of total government spending in 2014. Government health spending per capita (PPP) increased from USD 348 in 2008 to USD 467 in 2014, corresponding to an average increase of 5% per year. Expenses on pharmaceutical drugs are a significant part of overall healthcare spending. Total drug expenditure increased to 46% in 2009 from 35% in 1993. Thailand will need to rein in its rapidly increasing healthcare expenditure, especially on medical insurance schemes and device mechanisms, in order to curb the increased pressure on government hospitals struggling to deliver quality services. The challenge in the future will be to maintain both the quality and the effectiveness of healthcare while keeping expenditure under control.
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3.2 Assistive Technologies
3.2.1 Market Overview
The Thai Ministerial Regulations for the Provision of Assistive Technology, Media and Services for People with Disabilities defines the items that fall under the category of ‘Assistive Technologies’ as “tools, hardware, software or services for disabled people”. These technologies apply to tools designed exclusively for use by people with disabilities, as well as those that serve to facilitate usage by disabled persons, by way of relevant adaptations/modifications, of existing tools designed primarily for non-disabled individuals (Thai Ministerial Regulations for Provision of Assistive Technology, Media and Services in People with Disabilities, 2008). These technologies have the objectives of increasing, maintaining or developing abilities and potential for disabled persons, so that they are able to access information and activities in the same way as non-disabled individuals. In Thailand, low-tech assistive technologies are mostly made by local producers. High-tech products involving more complex production techniques are more expensive and thus they are fairly uncommon (Disabilities Thailand and Network of Disability Rights Advocates, 2016).
China and Taipei are the main exporters supplying assistive devices to the Thai market. China accounted for about 87% of total imports of carriages for disabled persons in Thailand in 2015, while Taipei supplied 9%. In the field of importing Parts and Accessories for Carriages for Disabled persons, Taipei ranked 1st with 72% of total import, whereas China accounted for 22% in 2015. The tables below present a list of supplying markets for carriages, parts and accessories for carriages for disabled persons imported by Thailand annually.
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Exporter Imported Imported Imported Imported Imported Value, 2011 Value, 2012 Value, 2013 Value, 2014 Value, 2015 (‘000 USD) (‘000 USD) (‘000 USD) (‘000 USD) (‘000 USD) World 2,456 3,091 2,959 3,043 3,457 China 2,145 2,566 2,597 2,439 2,995 Taiwan 81 59 189 200 299 South Korea 0 3 2 169 105 Hong Kong 0 0 0 0 23 Germany 54 68 10 84 9 US 70 173 44 112 6 Japan 89 127 9 13 5 Table 2: List of Supplying Markets for Carriages for Disabled Person Imported by Thailand; Carriages for Disabled Persons, Not Mechanically Propelled Source: International Trade Centre
Exporter Imported value, Imported value, Imported value, Imported value, Imported value, 2011 2012 2013 2014 2015 (‘000 US dollars) (‘000 US dollars) (‘000 US dollars) (‘000 US dollars) (‘000 US dollars) World 213 118 287 267 218 Taiwan 48 24 112 179 158 China 21 73 51 33 49 Japan 41 1 9 4 7 US 32 4 25 0 2 Table 3: List of Supplying Markets for Parts and Accessories for Carriages for Disabled Persons Imported by Thailand; Parts and Accessories for Carriages for Disabled Persons, n.e.s.(not elsewhere specified) Source: International Trade Centre
Assistive technologies are not an area of strength for Thai exporters; for example, the total export value of Carriages for disabled persons in Thailand in 2015 was only US$ 139,000. The main markets for Thai exports are Australia, the United States and New Zealand.
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Importer Exported Exported Value, Exported Value, Exported Value, Exported Value, Value, 2011 2012 2013 2014 2015 (‘000 USD) (‘000 USD) (‘000 USD) (‘000 USD) (‘000 USD) World 40 81 76 140 139 Australia 0 0 0 8 61 United States 35 64 59 76 49 of America New Zealand 0 0 0 0 27 Table 4: List of Importing Markets for Carriages for Disabled Persons Exported by Thailand; Carriages for Disabled Persons, Not Mechanically Propelled Source: International Trade Centre
Pricing and Distribution Chain
The procurement policy on equipment and assistive devices for disabled persons is mainly focused on price rather than quality. Distribution is concentrated in the Bangkok Metropolitan Region and does not cover rural areas. Persons with severe disabilities, who have limitations in personal mobility, have few choices available to them regarding equipment models and often face delays in delivery time due to:
The limited number of personal assistants who are able to respond to the demand for services from persons with severe disabilities.
High costs of assistive devices for persons with severe disabilities (e.g. patient lifts or electric wheelchairs).
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Legal Framework
PDEA BE 2550 (2007), amended in 2015, grants certified Civil Society Organisations (CSOs) and local administration the right to set up Disability Service Centres in order to enable persons with disabilities to have easy access to the benefits and services to which they are entitled by law.
Existing disability service centres mainly belong to local administrations, not CSOs. As of February 2016, from a total number of 815 centres, only 55 belong to CSOs.11 Financial support for the disability service centres is often inadequate and subject to significant delays.
The benefit packages for equipment and assistive devices differ across three health programmes:
Social Security Fund: only 29 types of equipment, limited to those with hearing and physical disabilities.
National Health Security Fund: all types of equipment for persons with disabilities are covered – 54 types are available and others are available to those who are in severe need.
Government Officer Treatment Welfare Fund: 80 types of equipment are available, but only for persons with visual, hearing and physical disabilities. However, those in the Government Officer Treatment Welfare Fund have an opportunity to receive certain pieces of expensive equipment, such as Cochlear Implants, not available from the other two funds.
Types of assistive technologies and related services are regulated in the Individuals with Disabilities Act Amendments PL 105–17. By following the regulations of the Act, students with disabilities could benefit via the Individualized Education Plan (IEP), which indicates types of disabilities and the rights to obtain assistive technologies (Lersilp, Putthinoi, and Chakpitak, 2016).
Therapists play an important role in providing assistive technology. In particular, therapists participate in needs evaluation, decision-making and implementing intervention. In this role,
11 Information from Meeting Report: Sub-Committee on Persons with Disabilities Affairs of National Legislative Assembly prepared by the DEP on 15 February 2016.
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perspectives and opinions are given on the impact of assistive technologies on the recipients’ activities of daily living, education, play, leisure and social participation (Case-Smith, 2005).
Under the Ministerial Regulations of BE 2537 (1994), issued under the authority of the Ministry of Public Health, the provision of assistive devices is part of the medical rehabilitation service. Registered persons with disabilities have the right to have assistive devices supplied and maintained free-of-charge. The two core policies of Sirindhon National Medical Rehabilitation Centre (SNMRC), the central agency in charge of implementing this regulation, are:
To give full support to Persons with Disabilities (PwD) in the supply, repair and maintenance of assistive devices, and
To support the production of assistive devices within the country by both governmental and non-governmental organisations using appropriate technology, in order to decrease imports.
In addition, the Thai government also provides support to agencies that produce assistive device equipment and accessible technologies for PwD in taking into account all of their special needs according to existing laws, national plans, strategies and guidelines to promote independent living.
The Department of Land Transport issued the 2009 Regulation on Criteria, Procedures and Terms of Payment for equipment to assist persons whose disabilities were due to traffic accidents, which includes prostheses, wheelchairs, canes and walkers as well as other equipment deemed necessary. These expenses will be paid out from the Fund for Traffic Safety set up to assist persons with disabilities in a sum not exceeding THB 200,000 (EUR 5,300) per person.
Thailand has taken measures to produce local and assistive technologies accessible for persons with disabilities. Some of these measures are:
Collaboration between the National Electronics and Computer Technology Centre (NECTEC), the Office of National Telecommunications Commission (ONTC), Sirindhorn National Medical Rehabilitation Centre with schools of architecture at universities to carry out innovative assistive technologies research;
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The development and dissemination of the following four standards by NECTEC, in collaboration with the Thai Industrial Standards Institute and ONTC: (1) Web Accessibility; (2) digital Talking Book or Daisy Talking Book; (3) accessible ICT equipment; and (4) Office equipment and supplies. ONTC has developed standards for accessible telecommunication products, mobile and fixed-line phones, and the internet for persons with disabilities and older persons.
To enable persons with disabilities to fully access educational services without restrictions, the Office of Basic Education Commission (OBEC), Office of Vocational Education Commission (OVEC), Office of Higher Education Commission, and Bangkok Metropolitan Administration (BMA) have made science, mathematics and other educational materials accessible via assistive technologies.
3.2.2 EU Opportunities
Key Players
Assistive Technology Centre (ASTEC) – set up by the National Electronics and Computer Technology Centre (NECTEC)
ASTEC serves people with disabilities and the elderly through research and development, technology transfer and appropriate use of IT solutions to help them live more comfortably and independently. The major programmes of ASTEC include; web accessibility, talking devices, talking books in DAISY format, speech training/therapy, PC peripheral devices for physically disabled persons including cerebral palsy and autism, and electric wheelchairs. Novel designs for tables, track balls, single switches, key guards, including bowl with spoon, have been created, patented and manufactured for people with disabilities.
National Health Security Office
The National Health Security Office is responsible for providing assistive devices for all disability types, such as provision of prostheses, hearing aids, magnifiers, white canes, and wheelchairs. National Health Security Office supports disability groups to conduct trainings on caring for persons
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with disabilities, to establish rehabilitation programmes, and to develop a model centre called “Half Way Centres”. In addition, the National Health Security Office, in collaboration with Sirindhorn National Medical Rehabilitation Centre, has established eleven assistive device manufacture and repair centres, and comprehensive healthcare centres in 22 community hospitals.
Competitors
In addition to the fact that assistive devices in Thailand are mainly provided by organisations belonging to the government (as above), EU companies currently have no presence in this sector in Thailand. Competitors include:
Karma Medical Products Co., LTD (Taiwan)
Founded in 1987, Karma was the first company to introduce aluminium-frame wheelchairs and has since then grown to become one of Asia’s largest, most innovative wheelchair providers.
In 1997, Karma Medical established a contract-manufacturing base in Korat, Thailand, to meet the growing global demand of Karma products. One year later, Karma aluminium alloy wheelchairs began to dominate the Thai market, commanding a market share of 80%, making them the market leader in the assistive technology sector in Thailand. The main products of Karma Medical in Thailand include: manual wheelchairs (e.g. tilt-in-space series with weight redistribution, stable positioning, and ultimate pressure relief), power wheelchairs (indoor and outdoor versions with multiple adjustments for best fit) and accessories (quick release attendant controller, adjustable headrest, contour adjustable headset).
Matsunaga Manufactory (Japan)
Matsunaga was founded as a wheelchair manufacturer in 1974 and holds the largest market share of premium quality wheelchairs in Japan.
Matsunaga established a local subsidiary in Thailand in 2014. The variety of their products includes: wheelchairs (compact wheelchairs, tilt/recline wheelchairs, sports/active wheelchairs and paediatric wheelchairs); walkers (folded-up walkers, U-shaped walkers); stretchers; bathroom safety products.
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3.3 Medical Equipment
Medical equipment is defined as any instrument, apparatus, device or material used in diagnosing, treating and/or preventing human or animal diseases, excluding the use of pharmacological, immunological or metabolic means of doing so. Typically, the term is used interchangeably with “medical device”, which is usually defined as any article, instrument, apparatus or machine that is used in preventing, diagnosing or treating illness or disease, or for detecting, measuring, restoring, correcting or modifying the structure or function of the body for health purposes. This also excludes pharmacological, immunological or metabolic means.
3.3.1 Market Overview
In 2015, Thailand’s market for medical equipment was valued at USD 1.2 billion. The BMI Medical Device Industry Report 2016 predicts that the market will grow at a compound annual growth rate (CAGR) of roughly 12% between 2014 and 2019. This will result in a rise in market value from USD 1.2 billion in 2015 to USD 1.9 billion in 2019 (see Figure 3). Forecasted growth rates over this period differ significantly by product type; for example, growth in diagnostic imaging over this period is predicted to be 17.3%, but growth in patient aids is expected to be just 5.4%.
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In 2015, imports of medical devices increased by 10.8% and exports of medical device increased by 8.5%, reflecting steady growth in Thailand’s healthcare sector despite an economic downturn.
2
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1,6
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USD Billion 1
0,8
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Figure 3: Projected Medical Device Market, 2014-2019 Source: BMI There are three main driving factors behind the increasing demand for medical equipment in Thailand. The first is the country’s universal healthcare system, which has substantially reduced Thailand’s population of uninsured people in both urban and rural areas. Public hospitals continue to be the main end-users of medical equipment accessories (BMI, 2016). However, despite this, growth in the local market is fuelled mostly by medical care facility upgrades and replacement of older medical devices with high-end products at specialised private hospitals.
The degree of coverage for the use of medical devices varies greatly across the three public health insurance schemes. The Civil Servant Medical Benefit Scheme (CSMBS) covers almost all medical devices through a fixed-rate fee-for-service payment scheme, whereas the Universal
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Coverage Scheme (UCS) and Social Security Scheme (SSS) include use of medical devices as part of their basic healthcare packages and provide support based on prepaid capitation.
Leading private hospitals have been investing in order to reinforce their position in the market. Bumrungrad International Hospital continues to focus on core overseas markets such as the Middle East, United States, and North and Central Asia. Bumrungrad International Hospital plans to increase its profile by opening more referral offices in Myanmar, Indonesia and Cambodia. Bangkok Dusit Medical Services (BDMS), Thailand's largest private healthcare group, has invested USD 122.7 million on new facilities at its Bangkok Hospital. BDMS has added 300 beds to be reserved for overseas patients, of which 100 will be dedicated to customers from the Middle East and Myanmar.
The second main driver of growth is Thailand’s ageing population. The percentage of the population aged over 60 currently stands at around 15%, and this figure is expected to increase to 25% of the population by 2030. This will likely boost the demand for medical services and medical devices.
Thirdly, continued growth in medical tourism has significant potential as a driver of growth in the medical equipment sector. Thailand is now recognised as one of the foremost destinations in the world for low-cost and, increasingly, high quality treatment with a growing number of hospitals gaining international accreditation. Of the 26.5 million people who visited Thailand in 2013, around 2 million came for medical reasons. In 2013, Thailand earned USD 4.3 billion in revenue from medical tourism, after average growth of 15% a year in the sector over the past decade.
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The most popular treatments undertaken by foreign patients include general check-ups, dental care, hip replacement, laser eye surgery, kidney transplants and heart surgeries. “The Thai medical device sector has seen robust and consistent growth owing to Private hospitals trying to attract foreign national health insurance schemes, a patients play a significant role in driving the medical tourism policy and strategic demand for medical equipment (BMI, 2016). government plan to develop Thailand as a It is predicted that Thailand's medical tourism Medical Hub of ASEAN. These factors sector will continue to grow as competition create great opportunities for investment, within the industry intensifies. Pricing and R&D and the expansion of medical device synergising the country's medical tourism production in Thailand.” offerings with the broader tourism sector's – Mr. Preecha products will be crucial to furthering its Bhandtivej, President of the Thai Medical international reputation. This will have a Device Technology Association significant impact on medical device sales, as medical tourism is a key source of healthcare spending in Thailand.
Investments in medical tourism are concentrated in popular tourist areas – Bangkok, Chiang Mai, Phuket, Surat Thani, Pattaya and Hua Hin.
In general, there are large regional discrepancies in the prevalence of different varieties of medical equipment. For example, investment in high-cost medical equipment is concentrated in the larger specialised or tertiary care regional hospitals which utilise the Ministry of Public Health’s (MoPH) new capital investment budget, while private hospital investment in high-cost medical equipment is decided by the hospital’s executive team.
Imports dominate the medical equipment market, constitution almost 90% of the supply (BMI, 2016). Thailand is the top importer of medical devices in the Greater Mekong Subregion (GMS) (Cambodia, Laos, Myanmar, Thailand and Vietnam). Thailand imports twice as much as its GMS neighbours combined (Kasikorn, 2015).
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Looking forward, imports are anticipated to continue playing a leading role in the Thai medical device market. Imports increased by 11.4% (USD 285 million) in the three-month period leading up to May 2016, and grew by 9.7% (USD 1.0 billion) in the 12-month period leading up to May 2016. Table 5 shows the import value of major categories of medical devices, along with the average year-on-year (YOY) growth rate over the period 2011-2015.
It is worth noting that predicted growth in imports is dependent, to a significant extent, on the political situation in Thailand. For instance, political unrest and street protests in many parts of Bangkok in May 2014 are believed to have contributed to a fall in foreign patient numbers over this period (Thanachart Securities, 2015). As medical tourism is a key driver of the high-tech medical devices market, political stability is a priority for the health of this sector.
Description Imports (EUR Million) Average YOY Growth, 2011-2015 Instruments and appliances used in medical, surgical, dental or 521 6% veterinary sciences Apparatus based on the use of x-rays, and alpha, beta or 143 14% gamma radiation Diagnostic or laboratory reagents on a backing, prepared 212 8% diagnostic or laboratory reagents (regardless of whether on a backing) Oscilloscopes, spectrum analysers, and other instruments and 162 4% apparatus for measuring or checking electrical quantities (excluding instruments and apparatus for measuring or detecting x-rays, or alpha, beta, gamma, cosmic or other ionising radiation)
Table 5: Thailand's Imports of Major Medical Devices, 2015 Source: Thai Ministry of Commerce
In total, there are around 500 medical device importers in Thailand, mainly located in the Greater Bangkok Region. In addition, there are several large international companies operating in the country with a wide range of product portfolios, such as Pacific Healthcare (Singapore), DKSH (Switzerland), Berli Jucker (Thailand) and 3M (US). Table 6 provides a brief market overview of three key sectors of the medical equipment industry.
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Sector No. of Local Key Players Common Manufacturers Brands In vitro reagents High-tech Close to zero Global pharmaceutical companies, Johnson & who conduct R&D in both the Johnson, diagnosis and treatment of Siemens, Wako, diseases. Roche Semi-high-tech Very few; mainly International brands from the US, original equipment Germany, Japan and China. manufacturers (OEM) for international makers from the US and Japan. Medical High-tech Close to zero Global medical instrument Siemens, instruments companies, who are also high- Toshiba, Philips, tech electrical and electronics Hitachi makers. Japanese makers dominate the market for x-ray machines. Semi-high-tech Very few; mainly Numerous international brands OEMs for from the US, Germany, Japan and international China. US makers dominate the makers from the market for electromedical US, Japan and apparatus. Recently, Chinese China, makers have tried to expand their share in this market, focusing on semi-high-tech instruments, such as medical, surgical sterilisers, blood pressure monitors, etc. Disposable (consumable) items Numerous Local firms, as well as Chinese Medtronic, and US companies. Local and Baxter, Cardinal Chinese makers mainly serve mid- Health, Nipro, range to low-end customers, such Terumo as small clinics. US makers mainly serve high-end customers, such as private hospitals.
Table 6: Analysis of Medical Device Sectors Source: Compiled by team.
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US device-makers account for approximately 24% of the industry as a whole in terms of market share, followed by China, Japan and then Germany (BMI, 2016). Japan, the US and Germany are key suppliers of in vitro reagents and high-tech medical instruments such as x-ray machines, while China dominates the market for disposable items and basic medical instruments such as spectacle lenses (Kasikorn, 2015).
In recent years, there has been increased interest in this sector from Japan, Malaysia and Singapore in particular, which may serve as a nudge to local service providers who will need to work harder in order to maintain their competitive edge in the market. Recently, there has been an increase in medical device company mergers and acquisitions, aimed at broadening companies’ customer bases and gaining access to potential markets.
+Figure 4: Thailand’s Medical Device Import Sources Source: Kasikorn Figure 5 shows the country of origin for instruments and appliances used in medical, surgery, dental or veterinary sciences in 2015. The largest supplier was the US (27%), followed by Japan (15%) and then Germany (11%).
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31% 27% U.S.A Japan Germany 3% China 15% 5% Ireland
8% Switzerland 11% Other
Figure 5: Country of Origin for Instruments and Appliances Used in Medical, Surgery, Dental or Veterinary Sciences, 2015 Source: International Trade Centre
In terms of medical equipment exports, Thailand is ASEAN’s top exporter of spectacle lenses, surgical gloves and dressing packages. In 2015, exports of medical devices increased by 8.5%, reflecting steady growth in Thailand’s healthcare sector.12 Disposable items represent almost half of exports. Many of Thailand’s medical device exporters are international players investing in Thailand who export back to their home countries, which include the US, Japan and France. Leading exporters of disposable items include Kawasumi (Japan), Cardinal Health (US) and Nikkiso (Japan), while exporters of spectacles include Hoya (Japan), Essilor Manufacturing (France) and Vision-Ease Lens (US).
12 Export.gov
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Table 7 shows the export value of a selection of major medical devices, along with the average YOY growth rate between 2011 and 2015.
Description Export (EUR Million) Average YOY Growth, 2011-2015 Instruments and appliances used in medical, surgical, dental 469 2% or veterinary sciences Apparatus based on the use of x-rays, and alpha, beta or 13 13% gamma radiation Diagnostic or laboratory reagents on a backing, prepared 3 -26% diagnostic or laboratory reagents (regardless of whether on a backing)
Oscilloscopes, spectrum analysers, and other instruments 109 -1% and apparatus for measuring or checking electrical quantities (excluding instruments and apparatus for measuring or detecting x-rays, or alpha, beta, gamma, cosmic or other ionising radiation)
Table 7: Thailand's Exports of Major Medical Devices, 2015 Source: UN Comtrade
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Figure 6 shows the most popular destinations for Thai exports of instruments and appliances used in medical, surgery, dental or veterinary sciences in 2015. The most common export destination was Japan (37%), followed by the US (21%).
30 37 Japan United States of America 3 4 Germany 4 21 France Singapore Other
Figure 6: Country of Destination for Instruments and Appliances Used in Medical, Surgery, Dental or Veterinary Sciences, 2015 Source: International Trade Centre
Thailand’s comparative advantage in the medical device industry can be attributed to the following main factors.
Attractive investment incentives: Thailand’s Board of Investment (BOI) collaborates with the Revenue Department of the Ministry of Finance to provide investment incentives for top priority activities. One such scheme is the establishment of super clusters (see Box 1), which include R&D in medical devices. The BOI encourages investments in medical device manufacturing by providing corporate income tax breaks, import duty exemption and other non-tax incentives, including permission to own land.
Potential production base for the ASEAN market: As Thailand grew to become an ASEAN medical hub, its demand for medical devices increased rapidly. Relocating medical device production bases to Thailand allows makers to attain a greater understanding of the
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specific characteristics and needs of end-users in high-growth ASEAN emerging markets. ASEAN members have signed a formal agreement to harmonise medical device regulations – the ASEAN Medical Device Directive (AMDD) (see Box 2). In the future, implementation of medical device standards according to AMMD will allow medical device-makers that meet technical standards in Thailand to sell their medical devices in other ASEAN countries without being subject to retesting. This will certainly strengthen the position of Thailand as a production hub for the ASEAN region.
▪ Experienced and skilled labour: Thailand has long been a significant production base for the electrical and electronics industry, with a well-trained workforce in that area.
▪ Well-established infrastructure: With established infrastructure, including industrial parks, utilities and logistics systems, Thailand is able to serve as a production base for export-oriented activities in general, including that of medical devices.
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Box 1: Super Clusters Thailand plans to offer the greatest tax incentives to industries located in “super clusters”, to be implemented in the 8 provinces (see Figure 7). The medical devices sector is one of the top priority super cluster activities.
What Is a Cluster?
A cluster is a concentration of interconnected businesses and related institutions that operate within the same geographic area. The aim of promoting business clusters is to boost the level of support and cooperation in all facets of business, i.e. both vertical and horizontal integration, in order to strengthen the industrial value chain.
Incentives for Super Cluster Activities:
Exemption from corporate income taxes for the first 8 years and 50% reduction for the next 5 years
Ministry of Finance will consider extra corporate income tax exemptions for 10-15 years for top priority super cluster sectors that are deemed important for the country’s future
Exemption from import taxes on machinery
Exemption from personal income taxes for Thai and international experts
Permanent residence may be granted to international experts
Foreigners may be allowed to own land that is used to operate approved businesses
Existing Clusters:
Automotive, electrical appliances, electronics and telecommunication equipment, eco- friendly petrochemicals and digital-based industries
Planned Clusters
Robotics, automation, aerospace, medical devices and food
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Figure 7: Thailand's Super Clusters Projects that manufacture high-risk or high-tech medical devices (e.g. x-ray machines, MRI machines, CRT scan machines and implants), and commercial medical devices arising from
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public sector research or collaborative public-private sector research are granted an eight-year corporate income tax exemption, an exemption on import duty on machinery and raw or essential materials used in manufacturing export products, as well as non-tax incentives.
Manufacturers of other medical devices (except for medical devices made of fabrics or fibre) are granted a five-year corporate income tax holiday, exemptions of import duty on machinery and raw or essential materials used in manufacturing export products, as well as non-tax incentives (see Figure 8 for a breakdown of the incentive classification system).
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A2: Activities in infrastructure for the A1: Knowledge-based activities, country’s development and activities focusing on R&D to enhance the using advanced technology to create country’s competitiveness: value added, with no or very few -8-year CIT exemption without cap, existing investments in Thailand, e.g. exemption of import duty on high-tech medical devices: machinery/raw materials and non-tax -8-year CIT exemption, exemption of incentives import duty on machinery/raw materials and non-tax incentives
A3: High-tech activities which are A4: Activities using less advanced important to the country’s technology than A1-A3 but which add development, with a few investments value to domestic resources and already existing in Thailand, e.g. other strengthen the supply chain; includes medical devices (except for medical medical devices made of fabrics, e.g. devices made of fabrics or fibre): gauzes: -5-year CIT exemption, exemption of -3-year CIT exemption, exemption of import duty on machinery/raw materials import duty on machinery/raw materials and non-tax incentives and non-tax incentives
Figure 8: BOI Tax Incentives Source: Board of Investment of Thailand
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Box 2: ASEAN Medical Device Directive (AMDD) The AMDD is an attempt by ASEAN to create harmonised device registration systems across 10 countries in the region. Although the AMDD would not result in the creation of a single market, the directive would make it significantly easier for a manufacturer that registers a device for sale in one member country to then apply for registration in another ASEAN member country.
Governments of all 10 ASEAN countries have signed on to implement the AMDD, but some countries (Singapore and Malaysia in particular) are further ahead in terms of actual implementation of policies and practices based on the AMDD than others. In 2015, member countries identified the subsequent steps, chiefly aimed at transposing the AMDD into national legislation consistent across all 10 member countries.
The next step includes developing a Work Plan on Implementation of AMDD, with Singapore’s Health Sciences Authority taking the lead in that initiative. The scope of the work plan will include developing common nomenclature, post-market surveillance guidelines and device grouping guidance. However, a timeframe for the work plan has not been published.
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Pricing and Structure of Distribution Chain
There are approximately 160 local manufacturers of medical devices in Thailand, which are mostly small or medium-sized (SMEs), with some which are family-owned. About 85% are small producers with less than USD 1.4 million in registered capital, 21% are medium-sized producers (between USD 1.4-14 million in registered capital) and only about 3% are large producers (Canvassco, 2014). These mostly concern small companies producing lower-end medical devices, such as disposable test kits and syringes, as well as latex products, including surgical gloves and catheters. Over 80% of domestic production is exported, a trend which is expected to continue in the near future (Export.gov, 2016).
Figure 9 provides a graphical illustration of the Thai medical device market value chain, which is explained in further detail below:
Figure 9: Thailand's Medical Device Value Chain Source: Kasikorn
1. Medical Device Makers in Thailand
Local medical device manufacturers, as discussed above.
2. Importers and Distributors of Medical Devices
Many importers are SME’s importers & distributors; large companies are subsidiaries or authorised distributors of international brands.
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There are three types of importers and distributors:
Subsidiaries of international brands. These handle only their own brands’ products, and include: Omron Healthcare (Thailand), Olympus (Thailand), Teromo (Thailand), Nipro Sales (Thailand), etc.
Authorised distributors. These are mostly Thai companies and a few joint-venture companies with a specific range of products, such as high-tech medical devices, dental medical devices, invitro reagents, etc.
SMEs’ importers and distributors. These handle a wide range of products, mostly disposable items or low-tech medical devices such as wheelchairs, walking aids, etc.
3. Hospitals and Clinics
Usually, hospitals and medical service providers are major end-users of medical devices. Hospitals are large-scale purchasers which dominate the market, whereas clinics are small- scale purchasers. As of 2013, there were 327 hospitals and more than 1,050 public hospitals in Thailand. In addition, there were 18,000 clinics in Thailand, including about 78% that are in up- country areas and 22% that are in Bangkok.
Public hospitals: Key customers in the medical device market, making large-scale purchases. They receive subsidies from the government and charge lower prices for their medical services, but have strict buying procedures to ensure that they follow government regulations.
Private hospitals: They have high purchasing power, as they can charge premium prices for their services, and as such they demand high-tech and premium quality medical devices to maintain their competitive edge.
Clinics: There are a large number of clinics, but clinics have low purchasing power as they are small in size. Clinics are willing to try new products to keep the cost of medical devices low.
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4. Pharmacies and Retail:
Pharmacies and retail represent a distribution channel of medical devices which provide directly to individual end-users, handling mostly disposable items and special items such as eyeglasses and contact lenses, and wheelchair and walking aids.
Pharmacies: There are about 13,000 pharmacies nationwide, with a few pharmacy chains such as Boots and Watson. Pharmacies sell mostly disposable items such as gauze, bandages, condoms, etc.
Specialised retail stores: These include optical retail stores selling contact lenses and eyeglasses, which are mostly local SMEs, with a few chains such as Top Charoen and Hor Waen. Other specialised retail stores handle items such as wheelchairs and walking aids; these are mostly located near big hospitals.
3.3.2 EU Opportunities
Entry Channels
Thailand’s domestic medical device “The Royal Thai Government has manufacturers generally only make basic medical placed a greater emphasis on the products such as syringes and gloves; thus, the medical device sector. Recently, the country is dependent on foreign imports for Royal Thai Government announced a complex or high-end medical devices. This strategic plan to promote investment, provides significant import opportunities for research and development for medical European medical device manufacturers. devices in order to increase local Possible opportunities exist in sectors such as production and reduce reliance on artificial blood vessels, disposable diagnostic test imports.” – Mr. Preecha Bhandtivej, kits, respiratory systems, rehabilitation President of Thai Medical Device equipment, orthopaedic and implant devices, and Technology Association neurosurgical devices and accessories (Today’s Medical Developments, September 2, 2010).
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The US Government recommends working with local agents/distributors. Local agents provide immediate access to an established marketing network and in-depth knowledge of regulations. A critical role of local representatives is to provide after-sales service support to customers, and to develop and maintain strong personal relationships with customers. In Asia, relationships are key in business and greatly influence customers’ procurement decisions. An agent's role includes all marketing of products, as well as the handling of all product registration with the Thai Food and Drug Administration (FDA), which is required for any imports (Export.gov, 2016).
Clinics are less brand-loyal and willing to try new products to keep costs under control, thus making them easier to access for foreign companies than public and private hospitals.
Export.gov (2016) identifies a range of medical devices as having the best growth opportunities, including surgical procedure equipment, diagnosis equipment, and devices for lung and heart disease treatment. Examples of these include: respiratory devices, orthopaedic implant devices, heart valves and neurosurgical devices. The dermatological device market is also recommended, as standalone skincare and dermatological clinics have become very popular in Thailand in recent years.
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Stengths Weaknesses o Increasing demand for medical o Lack of production technology devices o Gateway to ASEAN
Opportunities Threats o Strong investment incentives o Intense competitive enviroment o AMDD
Figure 10: SWOT Analysis for Medical Device Exporters Source: Compiled by team
Medical device-makers can either set up subsidiaries in Thailand or use local distributors to distribute medical devices to hospitals, medical service providers and end-users. Setting up a subsidiary avoids principal-agent problems and generally provides superior after-sales care, which local distributors do not have the ability to provide. On the other hand, by partnering with local distributors, the firm can gain local insight on customer preferences and buying behaviour. Furthermore, local distributors have good knowledge on how to enter the market and distribute products, and have already developed extensive distribution networks across the country which can be utilised by European manufacturers.
Main Barriers
While Thailand exhibits a significant need for foreign manufactured medical devices and supplies in order to cope with a rapidly growing demand, the sector is, nevertheless, strictly controlled by the nation’s FDA. The quality and safety of medical products is of very high importance in Thailand. Therefore, companies wishing to import medical device equipment into
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Thailand must meet the stringent requirements imposed by the Medical Devices Control Division of the FDA, which is under the MoPH (BMI, 2016) (see Chapter 4 for further details on the Thai regulatory framework).
Key Players
Thai Medical Device Technology Industry Association (THAIMED)
THAIMED was established in 1989 as a non-profit organisation, and, as of 2016, has 70 members. The membership consists of local and multinational enterprises in the medical technology and supporting industries. All of the top 10 US companies in the medical devices industry are members, and there are more than 30 members from Europe
THAIMED’s main objective is to improve member companies’ communication with hospitals and the government in Thailand. In addition, THAIMED also offers the government and the private sector advice on issues affecting medical products and their supply. THAIMED promotes business development in other ways as well. If a manufacturer overseas, e.g. from Europe, is looking for a distributor in Thailand, then THAIMED can connect the two parties.
National Science and Technology Development Agency (NSTDA)
NSTDA acts as a bridge between academic research and the private sector. Operating under the NSTDA umbrella, the National Centre for Genetic Engineering and Biotechnology (BIOTECH) functions as a premier research institute and human resource development centre, with a vision to make Thailand into a knowledge-based society through the promotion of science and technology.
Thailand Science Park (TSP)
TSP is the first technology and innovation hub of its kind in Thailand. It provides one-stop services for innovation and R&D in the private sector, which range from technology transfer through an ecosystem of more than 3,000 researchers in technology centres, companies and universities to financial assistance and business incubation services.
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National Innovation Agency (NIA)
The NIA can grant innovation coupons for approved projects to support 90% of R&D expenses incurred by innovation service providers (in cooperation with the Federation of Thai Industries). Financial support of 25%- 75% can be granted to prototype or pilot-scale projects, and interest- free loans for up to 3 years are available to assist in the start-up of commercial operations of innovation projects.
Thailand Centre of Excellence for Life Sciences (TCELS)
TCELS is a single platform that supports the establishment of life science-based businesses and investment in Thailand. TCELS connect companies with local university research facilities and business partners through a matching database and business forum. Some of the areas covered are: biopharmaceuticals, cosmetics, medical robotics and devices, and cell and gene products (BOI, 2016).
Competitors
American products have the lead in the higher-end medical device market, clinical diagnostic laboratory equipment market, and in the biotechnology segments. All of America’s top 10 medical device manufacturers have a sales presence in Thailand, with a number also operating factories in the country. They face strong competition, however, from European and Japan companies (Export.gov, 2016).
Major international manufacturers already have a “Thailand will continue to be one of presence in the Thai industry, attracted by the our top choices of investment location. kingdom’s strategic location as a regional hub We have been enjoying the product and a strong domestic market. These include: 3M distribution advantages from our (US), Bausch & Lomb (US), Baxter (US), Boston centrally located position in Thailand. Scientific (US), GE Medical Systems (US), This advantage will be even more Guidant (US), Johnson & Johnson (US), significant with the potential new Medtronic (US), Tyco (US), Sempermed (US), investment in Thailand.” – Mr. Lim, Manager at the Kendall Gammatron plant, Medtronic
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Safeskin (US), and Kawasumi Laboratories (US), Cardinal Health (US) and Pacific Healthcare (Thailand)13.
European companies active in Thailand
Carl Zeiss S.E.Asia (Germany)
Carl Zeiss S.E.Asia was established in 1990 with its regional HQ in Singapore and branch offices in Malaysia and Thailand. Zeiss is a supplier of medical devices in the field of medical technology. It supplies technologies and application-oriented solutions for ophthalmology and microsurgery. Zeiss provides packages of solutions for diagnosis and devices for optical coherence tomography (OCT), perimetry and optical biometry, as well as slit lamps. For the treatment of eye diseases, Zeiss offers ophthalmologic surgical microscopes, implants (intraocular lenses) and consumables such as ophthalmic viscosurgical devices (OVDs). Within the field of microsurgery, Zeiss creates visualisation solutions, especially surgical microscopes for minimally invasive surgeries. The medical technology portfolio is rounded off by technologies such as intraoperative radiotherapy.
Molnlycke Health Care (Thailand)
Molnlycke Health Care began operations in Thailand in 1990 as Thai Klinipro Co., Ltd. and changed its name in 2002 to Molnlycke Health Care (Thailand), Ltd. Molnlycke is a manufacturer of single-use surgical and wound-care products, and services for the healthcare sector. Its products include: surgical gowns, and surgical drapes and sets, as well as optical systems, industrial measurements and medical devices.
Philips (Netherlands)
Philips is a diversified technology firm. Healthcare makes up 42% of its global sales revenue. Philips Thailand was established in 1952. Philips provides a wide range of medical equipment
13 http://www.todaysmedicaldevelopments.com/article/medical-device-design-manufacturing-thailand-090210-tmd/
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including: advanced molecular imaging, radiography and fluoroscopy, and hospital respiratory care.
Siemens Healthcare (Germany)
In 1995, Siemens Ltd. was established to pursue business opportunities in Thailand. Currently, Siemens has approximately 1,100 employees. Effective from August 2015 onwards, the Healthcare business division is now a separate legal entity and operates under the name ‘Siemens Healthcare Limited’. This move aligns with Siemens AG’s strategy to separately manage the Healthcare business in order to more efficiently respond to the changing trends and paradigm shifts taking place in the healthcare industry.
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3.4 Telemedicine and e-Health
Telemedicine is defined as the provision of healthcare services through information and communication technology when the doctor or health professional and the patient are far apart. The methods of transferring information involve text, sound, images or any other forms of communication used for prevention, diagnosis, treatment and follow-up on patients.
3.4.1 Market Overview
Since October 2001, Thailand has been in the process of applying a universal healthcare programme, which feeds a growing demand for higher quality public and private healthcare. However, the country is facing a shortage of doctors, especially at public hospitals in rural areas. According to the Private Hospital Association, it is estimated that 40,000 more doctors are needed to ensure quality healthcare. However, there are only 2,500 graduates every year. Therefore, there is a strong need to find cost-effective means for major hospitals to support remote healthcare sites. One potential solution is the use of telemedicine.
According to WHO statistics, the telemedicine market in Thailand has witnessed high growth, largely attributable to increased government expenditure in healthcare. There are currently more than 70 telemedicine investors in Thailand ranging from USD 3,000 to USD 50 million in worth (Smerger Statistics, 2016). The main participators in the market are big IT companies, from both within the country and abroad, such as GE Healthcare (US), IBM (US), B. Grimm (Thailand), and Supreme Products Co., Ltd. (Thailand).
A key policy of the Thai Ministry of Public Health since 2012 has been providing doctors for all households, illustrated in Figure 11, whereby people or patients are connected to family healthcare staff, family medical doctors and specialists using telecommunication tools. To ensure the validity of and maximise benefits from the concept, all health centre staff (not including doctors) per member of the population are mandated not to fall below the ratio of 1:1,250, and the number of family medical doctors per family healthcare staff should not be less
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than 1:12 (i.e. the number of medical doctors per member of the population should not be more than 1:15,000).
Figure 11: Telemedicine Concept in Thailand: Doctors for all Households (Consultation 24x7)14 Source: World Health Organization
Health promoting hospitals, emerged from the International Network of Health Promoting Hospitals and Health Services (HPH) and began in 1988, promotes quality management of hospitals. The responsibility for health promotion in health services is shared among individuals, community groups, health professionals, health service institutions and governments. HPH aims to improve the health gains of hospitals (and other health services) through strategies targeting patients, staff and the wider community. Health services need to embrace an expanded mandate which is sensitive to and respects cultural needs. This mandate should support the needs of individuals and communities for a healthier life. Figure 12 describes the use of health promoting hospitals as a first option for patients to access medical services from home. They
14 http://www.searo.who.int/entity/health_situation_trends/events/20_Thailand_Country_Experience.pdf
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can take voice calls from health promoting hospitals nearby and can make voice/video calls to community hospitals and general/regional hospitals.
Figure 12: Consulting Hierarchy of Telemedicine in Thailand Source: World Health Organization e-Health:
While IT is pervasive in the Thai health sector, e-health foundations have lagged behind. There is no national e-health policy and applications of e-health remain fragmented. The Thai market for e-health remains small; revenue in 2016 was predicted to amount to EUR 36 million. However, rapid growth is anticipated; revenues are expected to show a compound annual growth rate (CAGR) between the period 2016-2020 of 18.1%, resulting in a market volume of EUR 69 million in 2020.15
The market's largest segment is aimed at the treatment of diabetes, with a market volume of EUR 2 million in 2016, followed by the treatment of heart failure (EUR 1.6 million) and the treatment of hypertension (EUR 0.5 million), Table 8 provides example e-medical treatments for each of these diseases.
15 https://www.statista.com/outlook/312/126/ehealth/thailand#
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Diabetes Heart Failure Hypertension
Connected medical Connected medical Connected medical devices designed for devices for heart failure devices designed for diabetes patients to use at patients (e.g. cardiac hypertension patients to home (e.g. connected implants) use at home glucose meters) Heart function monitoring Blood pressure monitoring Diabetes apps that assist apps for data collection apps for data collection in self-management (e.g. and self-management of and self-management of diabetes diaries) heart conditions. blood pressure values
Service-oriented diabetes Telemedical services for apps which make heart failure patients recommendations based on collected data
Telemedical services for diabetes patients
Table 8: E-medical treatments for each of these diseases Source: Compiled by Team
Electronic healthcare plays a role in achieving both quality improvements as well as cost reductions for the Thai healthcare system. While most Thai hospitals have already implemented some degree of electronic medical record (EMR) and electronic health record (EHRs) capabilities, the most modern EMR and EHR solutions, as well as, most recently, cloud computing capabilities, have only been introduced in private hospitals in Bangkok, Phuket and Chiang Mai. These records can be categorised into administrative and clinical data, where administrative data is patient information used for reimbursement, administration and reports, while clinical data is for patient care (e.g. laboratory data, pharmacy data and provider’s notes).
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In the provision of EHRs, the most significant costs are as follows.
1. Hardware: Switches, cables and wireless internet connections. Many hardware costs associated with traditional EHRs can be eliminated with the introduction of a web-based system, which only requires a basic computer and internet connection.
2. Software: EHRs require the signing of a contract and the paying of a monthly subscription cost per provider, as well as the paying of early termination fees and data migration fees if the customer wants to switch providers.
3. Implementation support and training: Initial costs are to be expected for the implementation of EHRs and related staff training. For the average EHR, it is estimated that a single provider needs 134 hours to fully implement the EHR into the existing workflow. Although the learning curve can vary greatly across systems, the loss of productivity during a transition period factors into the overall cost of an EHR.
Cloud computing solutions are gaining traction in the Thai market, but Thai hospitals, overall, still operate independently and there is no vision as of yet for developing a single health cloud. Each hospital may have a cloud-based email and Customer Relationship Management (CRM) software that sits alongside a backend for patient data that is hosted onsite. Different hospital departments and centres have separate needs, different varieties of data and use diverse solutions with little or no interoperability between systems. This illustrates the extent to which healthcare in Thailand is fragmented – all hospitals are different, making standardisation difficult to consolidate with the need for customisation so as to fit the unique workflow of each individual hospital, department or clinic.
There are a number of reasons why e-health efforts have not moved more quickly in Thailand. Privacy has been a major concern; with fears that insurance companies might deny coverage to people they know are suffering from an illness, making the security of digital records absolutely vital.
Companies such as IBM, Dell and Microsoft are a few of the biggest international companies currently providing digitalisation services to private hospitals in Thailand, including Bumrungrad,
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Bangkok and Ramhkamhaeng hospitals, where the primary services focus on bill payment, human resources, recordkeeping and inventories.
Segmentation
The telemedicine market has been segmented on the basis of service type and usage in the market as stipulated below.
Service Types:
Telesurgery: Telesurgery, also called remote surgery, is performed by a surgeon at a location removed from the patient. Surgical tasks are performed directly by a robotic system controlled by the surgeon at the remote site. Thailand is among the few Asian countries to harbour development of telesurgery services.
Telemonitoring: The use of audio, video and other telecommunication and electronic information processing technologies to monitor patient status from a distance. Telemonitoring services in Thailand are mostly applied to senior care in rural areas.
Teleconsultation: the process of providing remote consultation via teleconferencing systems.
Usage Market:
Telecardiology: A modern medical practice, which uses the power of telecommunication to perform the remote diagnosis and treatment of heart disease, such as coronary heart disease – chronic and acute – as well as arrhythmias, congestive cardiac failure and sudden cardiac arrest.
Teleradiology: The ability to obtain medical imagery (e.g. x-rays, MRIs, ultrasounds) in one location and transmit them over a distance, so that they can be viewed and interpreted for diagnostic or consultative purposes by a radiologist.
Telepathology: The practice of medical diagnosis facilitated by the digital transmission of pathological data.
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Main Barriers
Newcomers to the Thai healthcare system must deal with reimbursement costs and especially credentialing costs, i.e. a considerable amount of time and resources must go into starting or enabling the growth of the practice of their services, as credentialing is essential to receiving payments from the client base. The challenge when entering the telemedicine market in Thailand is to convince private clinics on the ample returns on investments in telemedicine – namely, cost savings, efficiency increases and quality improvements. Private clinics in Thailand face problems in the following areas:
Evaluating costs (with regard to the technology used, local pricing and incentives, and also challenges from the demand side; for instance, buyers often do not have a clear understanding of the nature of telemedical services, which can limit their demand)
Sustainability (problems with maintaining cost-effectiveness)
The quality of improvements (private clinics find it hard to improve their services)
Moreover, entrants will find the market saturated, in large part because the technology is relatively mature – there have been relatively few major improvements in telemedical services in recent years. In addition, according to WHO e-Health applications surveyed, which included the category of telemedicine, the main barriers to implementing telemedicine in Thailand include the following.
Perceived costs are too high
Underdeveloped Infrastructure
Lack of policy framework (lack of legal policies or guidelines on privacy and confidentiality in the use of clinical information and referrals in the context of telemedicine)
Lack of demand by health professionals
Lack of nationally adopted standards (e.g. DICOM, HL7). The Digital Imaging and Communications in Medicine (DICOM) stands for distributing and viewing any kind of medical image regardless of the origin (that is, the related peripheral acquisition equipment
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of a specific vendor). The DICOM allows the transmission of images and related information. Health Level Seven (HL7) is a standard series of predefined logical formats for packaging healthcare data into messages to be transmitted between computer systems.
The information needed for the development of telemedical services in Thailand includes information on:
Clinical possibilities (information about clinical use)
Cost (information about the costs and cost-effectiveness of telemedical solutions)
Evaluation (research publications evaluating the effects of telemedicine on the quality of services);
Infrastructure (information about the infrastructure necessary to implement telemedical solutions);
Labour (information on the impact of telemedicine on the use of human resources in the healthcare sector);
Legal aspects (information regarding the legal and ethical aspects of telemedicine)
Perception (information on patients’ perceptions of, or satisfaction with, telemedicine.)
Barriers to entry the market for e-health differ somewhat from that for telemedicine. In Thailand, where the vast majority of primary care is provided by public hospitals, the primary gatekeepers are the hospitals, who serve as healthcare providers, and the government, who serves as the regulator and funder of healthcare services (J. Sunkpho, 2014). Hospital management are concerned about the effects of cloud computing on regulatory compliance and data protection, and regulators are concerned about the effects of cloud computing on their ability to safeguard privacy and public health.
Healthcare providers and regulators are not always focused on moving in the same direction, and better alignment of hospital and regulatory incentives is key to facilitating cloud adoption. Hospital managers may view cloud and ICT as tools for invoicing, claims and finances, while government policy may focus on investments in hospital ICT as a means to improve the speed
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of care and increase patient revenues. Hospital managers, regulators and funders must see cloud and ICT as investments with the purpose of improving access to and the quality of care – that is, as investments in tools to enable better patient outcomes.
The National Health Security Office (NHSO), whose primary responsibility it is to provide quality health services to the community, could play a vital role in mobilising funding for such an important endeavour such as getting into contact with new investors who could take part in telemedicine market in Thailand.
As a consequence of the financial crisis in Thailand in 1997, financial support for telemedicine, which has been offered primarily by the government, had been limited up until 2007. The MoPH currently finances the development of a nationwide health IT system, and the NHSO has committed to support data transfer between hospitals and the office for reimbursement. Individual hospitals pay for telemedicine and standardisation through their respective institutions. Private-sector institutions do not play a large role in financing telemedicine in Thailand.
Technologies Available in e-Health:
Speech technology:
Text-to-speech (TTS) synthesis has shown itself to be a mature technology applicable for practical use.16 TTS for the Thai language is considerably more complicated than that for other well-known languages due to certain unique features of the Thai language. Vaja, a bilingual Thai/English TTS developed by Speech and Audio Technology Lab (SPT) (Thailand) at the National Electronics and Computer Technology Centre (NECTEC), is the result of a highly successful research project and has been integrated into a variety of applications and services. Since 2011, more than 70 state hospitals have used the Thai-owned Vaja to call patient names alongside patient registration numbers as part of their queuing systems. Vaja has been applied
16 Worldwide AI (2014). http://www.aaai.org/ojs/index.php/aimagazine/article/viewFile/2522/2430
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to voice information services in some telemedicine call centres, such as a diabetes self-care service at Chulalongkorn hospital. It has also been used in a multilingual speech translation mobile application, developed under an international collaboration called U-STAR. In the area of assistive technology, Vaja has been used as an interface for people with visual disabilities to access information in online newspapers since 2010.
Cloud technology:
VMware, a cloud solutions company, is working alongside the Ministry of Public Health (MoPH) to enable a digitalised healthcare system for the local population.17 With more than 10,000 health IT units across Thailand's 76 provinces, the ministry is seeking to consolidate health IT infrastructure, and enable the prompt exchange of information between the MoPH and individual units located across the nation. The MoPH deployed VMware vSphere and Horizon to improve the coordination of healthcare services, allowing more affordable care for patients, providers and facilitators. This strategy supports the Thai government's overall vision for a ‘digital Thailand’ which promotes the use of digital technology to create better economic opportunities for the nation.
By using VMware vSphere, the MoPH is able to consolidate its servers and applications in its data centre, reducing the time and effort that IT administrators need to manually restore servers. Through this improved coordination, the MoPH can track, manage and deliver IT services more easily whilst reducing costs. The MoPH also adopted VMware Horizon to virtualise its desktop infrastructure. Users and hospital employees are now able to provide 24/7 healthcare services and manage queries through desktop applications from almost any mobile device. This improves communication between end-users and employees. Storing data on virtualised servers also minimises the risks associated with dealing with a patient's personal information.
17 CIO-Asia (2016). http://www.cio-asia.com/tech/data-centre/thailands-ministry-of-public-health-leverages-virtualisation-to-deliver-better- healthcare-services/
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Cloud computing in the medical tourism industry:
The key purposes of cloud computing are reducing the costs and number of investments of any company that utilises a multi-user system in the basic structures of server, computer, network, etc., which is why information systems cloud computing is popular for administrative purposes in the medical and wellness tourism industries. For example, CMS-SMS (Clinic Management System of Smart Solution and Services) is a clinic management system that operates on a private cloud.18
CMS-SMS works on a visual machine system of VMware through the VMware and vSphere with the operating system LINUX Ubuntu 14.04. CMS-SMS is stored in one server while users are working. When a server has a problem or an auto-fail, CMS-SMS will be transferred to another server immediately with the VMware vMotion function, while the CMS-SMS is still running, so the users can continue working. Therefore, the CMS-SMS is a system with very high security.
CMS-SMS was designed by researchers, doctors and network service providers to support both clients and service providers. The CMS-SMS working scope consists of two parts:
1) Clients: Clients are people who have received medical services in cosmetic clinic businesses, which have recently increased in terms of client numbers, and these businesses bring high income to Thailand. Clients are able to access to the system to view several pieces of information, such as course details, promotions, product lists, doctor lists, doctor specialty lists, etc.
2) Service providers (hospitals, clinics), which consist of operation users, including sales, warehouse, purchasing, human resources and treatment departments. The scope of each department is as follows. The sales department handles client data, product information, course details, information on promotions and stock information, and also evaluates client expenses.
18 Putsadee Pornphol, Chantinee Naveevong and Suphamit Chittayasothorn (2015). http://www.ijimt.org/index.php?m=content&c=index&a=show&catid=70&id=957
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As for the treatment department, doctors are able to retrieve client appointment data that was sent from the sales department, in order to provide the correct treatment. Then, the doctors send the data to the system where clients are allowed to see the details of their treatment, and the system sends the data to the sales department in order for client expenses to be evaluated. As for the warehouse and purchasing departments, they are responsible for stock data and receiving products that were ordered by the purchasing department. The main purpose of CMS-SMS for operation users is submitting data to be processed for administration and decision-making.
The advantages of CMS-SMS are as follows:
Suitable for beauty clinic management since it is available for connecting online and real- time
It works via cloud computing, which makes it simple for clinic management, and also suitable for businesses with multiple points of sales and multiple branches
It runs on MySQL, and has a high capacity for data, with quick and accurate processing, allowing users to arrange data and use functions such as insert, update or delete via the internet at any time (it is also available for touch screen applications)
Social media used by Thai health professionals:
Social media in healthcare services gives patients the opportunity to find others with similar needs and share information about symptoms, treatments and conditions. Social media can assist patients and healthcare professionals in making healthcare decisions through shared experiences and collective learning. PatientsLikeMe, CureTogether and MedHelp19 are example websites that provide these services, allowing patients to monitor their symptoms and medication routines over a period.20 The four primary social media-related health services are:
19 MedHelp is the Consumer Health Division of the American digital health engagement firm Aptus Health. PatientsLikeMe and CureTogether are both online social businesses operated and founded in the US. 20 Suttisak Jantavongso (2016). http://ibimapublishing.com/articles/JEHM/2016/510007/510007.pdf
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emotional support and information sharing, questions and answers with physicians, quantified self-tracking, and clinical trial access. Of these, PatientsLikeMe provides medical conditions and services for emotional support and information sharing, and quantified self-tracking, as well as clinical trial access.
The use of social media for Thai health professionals is emphasised on Facebook and LINE applications. For example, the Deputy Minister of Public Health in 2013 encouraged the patients who live in the North Region of Thailand to consult their doctors using the LINE application. Advice via LINE messages are believed to be quick and accurate – able to point the patient the right direction and in a timely manner. LINE, Facebook, Twitter and WhatsApp are the four main social media applications that allow patients to seek a second opinion. Using these applications, image scans and reports from a hospital can be quickly uploaded and viewed by remote specialists.
Thai health professionals already use social media to network with patients and others. The social media applications or platforms are selected on the basis of health professionals’ familiarity with the application. One of the reasons behind the popular use of social media is that such applications are typically free. Other advantages include: the large number of existing users, the ability to send pictures, the ability to send notifications, ease of use, and the ability to discuss in groups.
Electronic medical record exchange system:
Thailand intends to develop an electronic medical record exchange system in a limited number of private and governmental hospitals. The system will follow the standard Clinical Document Architecture (CDA) format, which is based on the HL7 Reference Information Model standard.21 The “exchange” element of this system will take place among healthcare providers from different sectors within Thailand, as well as with the home institutions of some foreign tourists. The timeline for standards adoption can be described as follows:
21 National Bureau of Asian Research (2012). http://www.nbr.org/publications/strategic_asia/pdf/SA12_execbrief.pdf
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The CDA standard will facilitate a smooth transition to HL7, which will become the nationwide standard in the foreseeable future.
Level 2 CDA is relatively undemanding and easy to learn as it does not require much medical vocabulary coding. When all involved parties (i.e. hospital administrators, clinicians and IT professionals) feel comfortable using Level 2 CDA, they will then be introduced to the next step of Level 3 CDA, which requires more medical coding, such as that of SNOMED (Systematized Nomenclature of Medicine). There will be nationwide training programmes for all systems.
After the implementation of Level 3 CDA, the MoPH will facilitate the HL7 migration for interested hospitals.
3.4.2 EU Opportunities
Entry Channels
There is growing support for the installation and expansion of telemedical infrastructure on the part of the Thai government, presenting a good opportunity for foreign companies to enter the market. There are a host of channels that European companies can consider which are tailored to the needs of customers in Thailand as well as its potential for development, such as:
Tele-education: The delivery of continuing education programmes to rural healthcare professionals, for which the media could be audio, video and computer-based.
Telemonitoring: Home telemonitoring of Thai patients. An example of this could be the monitoring of diabetes patients. Cases of diabetes in Thailand are very prevalent (over 4 million in 2015), mainly in rural areas. Health companies can consider both telephones and telemonitoring using wireless technology to provide services for diabetes patients.
Telecardiology: Telecardiology is seen as a reliable and cost-effective means of risk reduction, when used for diagnostic purposes, particularly in comparison with long-term face-to-face monitoring. Since 2010, telecardiology has grown in popularity throughout the country, presenting a unique opportunity for newcomers, as more and more Thai people
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have become aware of the benefits of this method, with still only a few companies providing it in Thailand.
Other potential channels could include teleradiology and telepathology.
In providing e-health solutions to hospitals in Thailand, the formation of strategic alliances are a suitable entry channel for European companies. Strategic alliances would enable European companies to forge research and development arrangements, as well as distributions alliances, with Thai partners and agents. If the product is cloud-based, personnel requirements and operating costs will be low, but the company should expect the involvement of import agents and procedures for licensing and contracting.
The spread of smartphones and the demand for improved medical services presents an ideal opportunity for European medical device, healthcare, software and technology companies. In particular, the development of low-cost, high-quality smartphones is changing the way that patients and doctors communicate with one another. Medical device companies can take advantage of this growth potential and expand their operations in Asian markets which are eager for the low-cost healthcare services that smartphone technology can provide.
Increased access to smartphones and the internet are the basis for predictions that the mobile health market will enjoy a CAGR of more than 30% over the next four years. Allied Market Research values the global mobile health market at nearly USD 11 billion.22 With the number of mobile phone users in the Asia Pacific region expected to grow from 2.5 billion to more than 3 billion in the coming years, mobile health technology will become even more accessible.
Wearable technologies:
A notable aspect of the wearables trend is that the playing field for wearable medical devices in Asia is simultaneously becoming more crowded and more complicated. To compete effectively, European manufacturers can leverage technology to develop more specialised and
22 Pacific Bridge Medical (2016). http://www.pacificbridgemedical.com/publication/mobile-health-asia-making-smartphone-technology/
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personalised devices. We may see companies develop medical wearables made smarter by tailoring their features more specifically to different market segments, including, for example, the elderly or young diabetics. Manufacturers may also consider forming partnerships with large corporations, healthcare practices and retailers to expand their market reach. While the market for wearable medical devices is becoming increasingly competitive, it remains a fluid and growing field full of attractive opportunities for the foreseeable future.
Competitors in e-Health and Telemedicine
The Thai market for telemedicine and e-health is reflective of the overall landscape of Thailand’s foreign relations, where the US is Thailand’s biggest trading partner outside of Asia, followed by Germany. It is expected that Thailand’s medical tourism industry can provide opportunities for European companies to expand their services and technologies in Thailand. Currently, Siemens and Philips are the only two major providers of telemedicine and e-health solutions in the Thai market.
Siemens Healthcare (Germany)
In 1995, Siemens Ltd. was established to pursue business opportunities in Thailand. Currently, Siemens has approximately 1,100 employees. Effective from August 2015 onwards, the Healthcare business division is now a separate legal entity and operates under the name ‘Siemens Healthcare Limited’. This move aligns with Siemens AG’s strategy to separately manage the Healthcare business in order to more efficiently respond to the changing trends and paradigm shifts taking place in the healthcare industry.
Philips (Netherlands)
Philips and enterprise cloud-computing leaders Salesforce have strategically aligned to enable a new world of data sharing and device interoperability in hospitals. Leveraging the Salesforce1 platform, HealthSuite allows for the collection, integration and analysis of clinical and other data, including medical records, imaging and monitoring data, from multiple sources, including personal devices and technologies. HealthSuite is designed to be an open ecosystem for third-
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party app developers, with the potential to transform both the areas of professional healthcare delivery and continuous personal health management.
Competitors in Telemedicine
Large health IT foreign companies have stepped into the telemedicine market in Thailand, such as: AMD (US), GE Healthcare (US), IBM (US), McKesson (US), Philips Healthcare (Netherlands), Siemens Healthcare (Germany) and domestic companies such as B.Grimm (Thailand) and Supreme Products Co., Ltd. (Thailand).
Newcomers from Europe have to compete with telemedicine businesses from the US, Canada and Europe itself, as well as domestic telemedicine companies. US companies are market leaders in Thailand’s telemedicine sector. Intel and Dell are developing an Internet of Things (IoT) “smart city” to support older people in Thailand. The smart city is a three-year public- private partnership with the primary aim of supporting older people in their homes through IoT- powered applications including health monitoring (RPM – remote patient monitoring) of vital signs, fall detection, emergency notifications, environmental monitoring and safety tracking.
Canadian companies possess an advantage compared to newcomers from Europe as they began researching Thailand’s telemedicine market several years ago, along with the European companies that have already established their place in the Thai market, such as GE Healthcare (formerly headquartered in the UK, now in Chicago) and Siemens Healthcare. Finally, domestic companies have developed their technologies and telemedical services to the extent that they are now potential competitors in the market.
The following companies are already established in the Thai telemedicine market:
AMD Global Telemedicine, Inc. (US)
AMD is a telemedicine encounter management systems company (TEMS™) and the world’s foremost supplier of telemedical technology, devices and application software for both dynamic encounters (live telemedicine) and deferred consultations. AMD Global Telemedicine, Inc.’s offerings include the market’s preeminent diagnostic medical devices and also Consult™
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encounter management software, which is equipped with device management, case creation, work flow and archival functions. AMD has over 5,400 installations in 74 countries and delivers solution designs, turnkey installations and training for telemedicine programmes across the globe. AMD started their business in Thailand in 2009.
GE Healthcare (US)
GE has been present in Thailand since the early 1900s, when it was selling lightbulbs, and is one of the country’s largest foreign investors with investments of more than US$1 billion in the fields of infrastructure business, which most notably includes energy, aviation and healthcare. GE continues its efforts to drive Thailand as a global medical hub and has a vision to create an ‘Early Health’ model of care focused on earlier diagnosis, pre-symptomatic disease detection and disease prevention. The company’s equipment is used by medical schools that are, in turn, the foundation for producing future professionals to support the country’s healthcare industry. It has provided telemedical services in many Thai hospitals, such as Siriraj Hospital, King Chulalongkorn Memorial Hospital, Maharaj Nakorn Chiang Mai Hospital, Bangkok Khon Kaen Hospital, Bangkok Chiang Mai Hospital, Samitivej Chonburi Hospital and Suranaree University of Technology Hospital.
Supreme Products Co., Ltd. (Thailand)
Supreme Products Co., Ltd. is one of the largest distributors and service providers of medical devices in Thailand, with a special focus on the distribution of medical equipment in Thailand. With a total staff of around 500, they provide products and services in the following areas: outpatient departments, radiology departments, pharmacy, cardiology, oncology, operating theatres, ICU, inpatient departments, etc. e-Health Competitors:
IBM (US):
Bangkok Hospital Group launched a project to integrate and centralise its electronic medical records with IBM Power Systems in an effort to improve its services. The new system seeks to
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manage and connect their medical records together with other hospitals in the network, offering patients the option of ‘one-stop’ registration, along with quicker and more convenient services. In addition to improved efficiency in patient records and tracking, the group of hospitals will also upgrade its financial and business management system with IBM Cognos, which provides intelligent financial analytics capabilities. The software combines hospital data and statistical analysis to help executives make precise investment decisions that better meet the needs of patients.
IBM Watson (US)
As part of a five-year plan, Bumrungrad has implemented IBM Watson for Oncology, trained by Memorial Sloan Kettering (MSK) – one of the world’s leading cancer centres. Bumrungrad plans to use IBM Watson for Oncology to help its doctors plan the most effective treatments for cancer patients based on each patient’s profile, medical evidence, published research and the extensive clinical expertise of MSK.
The Watson technology can analyse vast quantities of this information and present a summary of findings relevant to each patient case, including treatment options based on National Comprehensive Cancer Network (NCCN) guidelines.
Bumrungrad is the first medical institution outside of North America to embark on an IBM Watson for Oncology initiative. IBM Watson for Oncology is essentially a cognitive computing system designed to support the broader community of physicians working in oncology, as they consider treatment options for their patients. MSK’s clinicians and analysts are partnering with IBM to train Watson for Oncology to interpret cancer patients’ clinical information and identify individualized, evidence-based treatment options that leverage the specialists’ decades’ worth of experience and research.
Dell (US)
Bangkok’s Ramkhamhaeng Hospital is using Dell technology for their patients’ ‘guide cards’, which contain their data along with a barcode. Patients need to use the card at every step of
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their treatment. Staff and doctors use barcode scanners on the card throughout the procedure to ensure that the right records, the right file and the right medication go to the right patient.
When a doctor first sees a patient, he or she scans the ID card to make sure it matches the patient. After diagnosis, the doctor types the symptoms and prescription into the computer system. The prescription is sent electronically to the medicine-dispensing department.
For inpatients, staff feed the prescription into a medicine-dispenser robot, which arranges and dispenses the appropriate doses. Each dose is scanned by barcode before being administered to the patient to ensure correct medication and dosage.
The hospital has also introduced an EMR system to collect patients’ data in digital form. Currently, the hospital has about 2,000 patients. Another technology used in the hospital is a picture archiving and communication system (PACS). Electronic images and reports – x-rays, for example – are transmitted digitally via PACS. This speeds up the treatment process as doctors can read patients’ files and monitor their symptoms online from anywhere and at any time. All of the above-mentioned technologies used at Ramkhamhaeng and its affiliated hospitals require a data backup centre and servers, which are provided by Dell Corporation.
The two companies have been strategic partners for 10 years. Dell provides a data centre, servers, storage and data discovery systems for the hospital group.
CloudMed, Telstra (Australia)
CloudMed is a subsidiary of Australia's biggest telecommunications company, Telstra. It has installed its Arcus system into facilities owned by the Khon Kaen University Hospital. Arcus Hospital Information System (HIS) is a comprehensive hospital information system that handles patient administration and financial functions, and integrates these with an advanced clinical information system. It provides secure access to each patient’s EMR in real time at the point where clinical decisions are being made.
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Cisco (US)
Cisco and Siriraj Piyamaharajkarun Hospital (SiPH), one of the oldest public and teaching hospitals in Thailand, are collaborating to create a so-called ‘Hospital of the Future’. Cisco technologies and solutions will provide SiPH with innovations in the areas of wireless mobility, security, voice and video to develop a borderless hospital representing the next generation in patient care and hospital administration. At SiPH, the core network will be enabled by the Cisco Borderless Network Architecture, powered by the Cisco Nexus 7000 Series switches, Cisco Nexus 2000 Series fabric extenders, and Cisco Catalyst 2960 Series switches. The combination of Cisco Nexus switches and fabric extenders will deliver scalable, high-density server connectivity, while the Cisco Catalyst 2960 enables applications that utilise IP (Internet Protocol) telephony, wireless and video.
CSC (US)
CSC creates interconnected healthcare communities across Southeast Asia. In Thailand, CSC Enterprise Management, is used by healthcare enterprises at different stages of development. Based on an open, standards-based design, the system can be implemented across a network of hospitals, clinics and other institutions. It also supports advanced multilingual implementations, allowing the solution to scale across geographical boundaries. Ten hospitals across Malaysia and 42 clinics in in the Limpopo region of South Africa are already benefiting from Enterprise Management, while in Thailand, it is installed in three hospitals – Sikarin Hospital, Siriraj Hospital and Rutnin Eye Hospital.
Nutanix (US)
Nutanix provides computerisation solutions to hospitals, and recently supplied Songklanagarind Hospital, which houses 853 beds, 700 full-time physicians, and can serve up to 3,500 patients every day, with a large-scale Virtual Desktop Infrastructure (VDI) solution. It has accelerated the application of EHRs, as well as PACS deployment, and drives increased adoption of converged architecture. Nutanix aims to provide healthcare organisations with standardised, repeatable and cost-effective solutions for EHR applications, VMs (Virtual Machines) and PACS deployments, with predictable performance and scalability.
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3.5 Nanotechnology Healthcare
Nanomedicine is the application of nanotechnology to healthcare and utilises the properties developed by a material at its nanometric scale (10-9 m). Nanomedicine has the potential to enable early detection and “The nanotechnology we are currently prevention, and also to drastically improve seeing in Thailand is considered Phase 1 diagnosis, treatment and follow-up of many generation mostly dealing with nano- diseases. In fact, it has opened up the materials. Phase 2 which is about 4-5 years pathway to the regeneration of tissues and from now will focus on nano-electronics, and organs. Nanomedicine is a key enabling 15-20 years from now will focus on nano- instrument for personalised, targeted and medicine.” – Prof. Siririrug Songsivilai, regenerative medicine, and is capable of Executive Director of NANOTEC delivering the next level of drugs, treatments and implantable devices to clinicians and patients, with the potential for real breakthroughs in healthcare. Additionally, it is expected to provide more affordable healthcare.23
3.5.1 Market Overview
In the past few years, the global nanomedicine market has witnessed an increasing use of novel nanomaterials and the emergence of nanorobotics. The market has also seen a significant demand for personalised medicines due to the ability of nanomedicine to offer patients treatments customised according to their individual medical and genetic conditions.
23 http://www.etp-nanomedicine.eu/public/about-nanomedicine/what-is-nanomedicine
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The North American nanomedicine industry dominates the global market. However, because of the growing nanomedicine market in the Asia Pacific region, as well as the presence of a large number of patented nanomedicine Box 3: National Science Technology and Innovation products and the favourable Policy and Plan 2012-2021 regulatory framework in the region, the global market is 2. Enhancing expected to diversify in future. 1. Empowering society economic and local communities competitiveness and flexibility Nanotechnology in the Asia Pacific region is expected to grow at a 4. Developing and faster compound annual growth 3. Ensuring energy, enhancing science, rate (CAGR) owing to the resource and technology and enviromental security innovation (STI), as presence of extensive unmet well as human capital healthcare needs, research collaborations and also increases 5. Promoting and supporting the in nanomedicine research funding, development of STI particular in the emerging infrastructure and enabling factors economies of China, India and others in the wider region. China is expected to surpass the US in terms of nanotechnology funding in the near future, which is indicative of the vast growth opportunities offered by this region.
Nanotechnology in Thailand is currently at a very early stage in its development. The National Science and Technology and Innovation Policy and Plan 2012-2021, which addresses the direction of the National Science Technology and Innovation Policy Office (STI) over the stated ten-year period, will encompass the Nanotechnology Roadmap 2 (2012-2016) and the Nanotechnology Roadmap 3 (2017-2021).
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Figure 13: Nanotechnology Roadmap for Thailand Nanotechnology Roadmap 2 has Health and Medicine as its primary research agenda – specifically the prevention, diagnosis and treatment of such important diseases as neurodegenerative and infectious disorders. Components to this include the development of sensors (for diagnosis and screening), vaccines, and medicine and medical materials. While there are eight R&D agendas, health and medicine is the largest in terms of budget, encompassing just under one-third of the total budget (USD 190 million).
Figure 14 graphically illustrates the roadmap for Agenda 1.1 – “the prevention, diagnosis and treatment of important diseases” – including the R&D agenda, alongside the project outcomes and technologies involved. The area of R&D for Agenda 1.1 will be nanosensors for diagnosis and screening, and the total budget for this project will be EUR 13.3 million. The key outcomes of the project as well as the technology involved are presented below. Agenda 1.2 pertains to vaccines and nanomedicine, as shown in Figure 15. The total budget for Agenda 1.2 is EUR 26.5 million.
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Figure 14: Roadmap for Agenda 1.1 (Nanosensors for Diagnosis and Screening)
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Figure 15: Roadmap for Agenda 1.2 (Vaccines and Nanomedicine) Despite Thailand still being in the early stages of nanomedicine development, there are several factors that suggest there is potential for significant future growth in the market.
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Strategic location
Thailand’s strategic location at the heart of Asia makes it ideal for businesses seeking to capture the huge Asian market. The fast growing Southeast Asian region, to which Thailand belongs, is home to more than 580 million consumers. In addition, Thailand’s trade relations and expanding free trade agreements with strong economies such as China, India, Australia and New Zealand, gives it access to an enormous and growing market.24
Strong infrastructure
Thailand has developed the country’s infrastructure to high standards, thereby supporting the growth of key economic sectors and leading to the development of comprehensive industrial clusters, which aid the formation of high-tech industries. Modern industrial estates, transportation systems, communication facilities and logistics systems help Thailand to achieve cost-effective business operations.
Thailand Science Park (TSP) is perhaps the foremost infrastructure project aimed at supporting R&D and technology-intensive business. The first science and technology park was established in 2002 with the aim of promoting innovation development and R&D activities in the private sector. TSP is situated close to the Asian Institute of Technology, Thammasat University and Sirindhorn International Institute of Technology, and houses the National Science and Technology Development Agency’s (NSTDA) four national research centres – the National Centre for Genetic Engineering and Biotechnology (BIOTEC), the National Metal and Material Technology Centre (MTEC), the National Electronics and Computer Technology Centre (NECTEC), and the National Nanotechnology Centre (NANOTEC). This proximity provides the opportunity for corporate tenants to gain access to highly skilled personnel, including 1,600 full- time NSTDA researchers.
24 http://www.nanotec.or.th/en/?page_id=1016
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Phase 1 of TSP is fully occupied by national research centres and over 60 corporate tenants. Around 30% of the corporate tenants are overseas companies from Japan, the US, Germany and France.
To meet rapidly expanding demand, the NSTDA in 2008 started the construction of TSP Phase II also known as Innovation Cluster II (INC II).
Investment incentives and privileges:
The Thai Board of Investment (BOI), a government agency under the Ministry of Industry whose purpose is to encourage and promote investment in Thailand, is working closely with TSP to assist investors from both home and abroad looking to setup operation in Thailand. BOI assistance initiatives include:
Enhancing competitiveness and facilitating investment through
o offering an attractive and competitive package of tax and non-tax incentives,
o imposing no foreign equity restrictions on manufacturing activities or on only some activities,
o providing assistance in the provision of visa and work permits to facilitate the entry and subsequent operation of foreign-owned businesses, and
o waiving restrictions on land ownership by foreign entities.
Giving business support services such as: comprehensive information and advice on establishing operations in Thailand; arranging site visits; identifying potential suppliers, subcontractors and joint-venture partners; providing useful contacts with key public and private organisations; and coordinating between the foreign business community and other public agencies.
Recently, BOI announced that it has revised its investment promotion scheme to also cover the production of nanomaterials or products from nanomaterials. The aim of this initiative is to encourage greater use of high-tech methods in Thailand’s nanomaterials manufacturing sector.
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This type of business will be categorised as a top priority business, deemed to bring wider benefits to the country and boost Thailand’s position as an attractive investment destination.
R&D
Science and technology (S&T) development was adopted as one of the indispensable key strategies for Thailand to make its economy and society more robust and competitive. Both the government and experts are focusing on science, technology and innovation development to make Thailand more competitive in global markets.
NANOTEC was established in 2003 by the NSTDA as one of four national research centres under its jurisdiction. With an annual budget of USD 11 million, NANOTEC is the key research funding agency for nanotechnology in Thailand. NANOTEC is investing in nanotechnology to provide Thai businesses with a means of differentiating their products and adding value, so that they can compete more effectively.
NANOTEC has the dual role of serving as a national R&D centre as well as a funding agency to support universities and other research institutes. It has established strong links with other institutes in Thailand, with more than 400 nanotechnology researchers, as well as with leading nanotechnology centres overseas.
Centres of Excellence (COE) in Nanotechnology
To make nanotechnology research in Thailand more dynamic, NANOTEC is also collaborating with eight leading Centres of Excellence (COEs) in nanotechnology established in key universities such as Chulalongkorn University, Mahidol University, Kasetsart University, Asian Institute of Technology, King Mongkut Institute of Technology Ladkrabang, Khon Kaen University, Chiang Mai University and Prince of Songkla University. Research output from these COEs has received worldwide recognition.
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Key Players
National Science and Technology and Innovation Policy Office (STI)
Responsibilities of the STI:
To develop standard measurements, indicators, databases and conduct policy research
To provide support and advice to other government agencies in formulating their own STI implementation plans
To coordinate and monitor the development of national S&T manpower
To monitor, evaluate and report the state national STI implementation to the committee and the cabinet
Competitors
GE Healthcare (US), Mallinckrodt plc (UK), Nanosphere Inc. (US), Pfizer Inc. (US), Merck & Co Inc. (US), Celgene Corporation (US), CombiMatrix Corporation (US) and Abbott Laboratories (US) are some of the major companies in the worldwide nanomedicine market.
Prime Nanotechnology (Thailand)
Prime Nanotechnology is a Thai nanotechnology-based start-up company specialising in nanomaterial synthesis. Prime Nanotechnology grew out of a research unit at the Faculty of Science, Chulalongkorn University, and focuses on the commercialisation of its patented nanomaterials.
The primary product of Prime Nanotechnology is silver nanoparticles, which are frequently used in numerous consumer products such as detergents, deodorants and skincare.
Crest Systems Group of Companies (Malaysia)
Crest was founded in 1999 in Malaysia. Crest specialises in complete microscopy and x-ray imaging solutions for a variety of customers, ranging from semiconductor and hard disk manufacturers to R&D communities. Among R&D communities, the Crest Systems Group of
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Companies offer microscopy imaging solutions for nanotechnology research, materials science research, and research in bioscience and bioengineering.
3.5.2 EU Entry Opportunities
The market for nanomedicine in Thailand remains in its infancy, which means that commercial opportunities for EU companies are still limited. The majority of EU institutions involved in nanotechnology in Thailand are in the field of research.
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3.6 Dental Products
Dental products include a variety of technologies that are used for diagnostic, preventive and regenerative purposes, as well as for the treatment of diseases of the oral hard tissue and for dental laboratory applications. Examples of such technologies are: CAD/CAM technologies, CAT scans, dental implants, intra-oral cameras, screening systems, and dental model equipment and materials.
3.6.1 Market Overview
The market for dental equipment is segmented based on the type of products, which include: general and diagnostic devices (systems and parts, dental implants, crowns and bridges, dental lasers, radiology equipment, dental biomaterial and dental chairs); treatment-based devices (orthodontics, endodontics, periodontics and prosthodontics); other dental devices (laboratory machines and accessories, hygiene maintenance and retail dental care essentials); and dental consumables. Dental lasers are expected to contribute towards future growth of the dental equipment market.
Globally, the market leaders in this sector are India, China, Japan, Australia, New Zealand and South Korea. Asian countries such as India, China, South Korea, Malaysia, Thailand and Singapore are likely to provide a growing market due to their increasing per capita income and emerging economies.25
Thailand’s market for dental devices and materials is highly dependent on imports, which account for over 65% of dental equipment. Local production is limited to consumables, toothpaste, waxes, artificial teeth and low-tech equipment, which are mainly exported to Thailand’s neighbouring countries.
25 http://www.infodent.com/magazine.php?id=65
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The recent increase in the growth potential of the dental market is due to the better access gained by Thai citizens to health services thanks to the Universal Coverage programme. After the implementation of this scheme, public dental clinics registered a large increase in the number of patients, who now only have to pay the equivalent of less than one dollar for basic treatments.
According to analysis by the United States Commercial Service, public hospitals are the main end-users of dental equipment and supplies in Thailand. Major private hospitals also have dental departments, treating both local and foreign patients, who generally pay on an out-of- pocket basis as there is no private dental insurance coverage available (although some private dental clinics are contracted by the Social Security Office to provide services under the Universal Coverage Scheme). Private dental clinics depend on international patients for a significant share of their revenues. As a consequence, many private hospitals increasingly market themselves as specialised international health centres in order to attract more patients, particularly health tourists as well as expatriate workers and their families. Private dental clinics are usually operated by more than one dentist, with the owner making purchasing decisions.
Although the market is small, the degree of penetration by international manufacturers is substantial, with products mainly supplied from the US, Germany and Japan.
Dental equipment and supplies are considered third-class or ‘General Medical Devices’ according to the Thai Food and Drug Administration, meaning they pose the lowest risk and so face the most lenient regulations (see Section 4 for further details on the risk classification system). These devices and accessories can be imported so long as they are freely marketed and sold in the manufacturing country. Accepted standards include those of the USFDA (US), CE Marking (EU), PAB (Japan), TGA (Australia) and SPAC (China).
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Dental products in Thailand are mainly supplied by companies from the US, Germany and Japan. To illustrate this point, Table 9 and Table 10 show the import sources and associated import value for dental drill engines, and instruments and appliances used in dental sciences imported into Thailand between 2011 and 2015.
Exporter Imported Value, Imported Value, Imported Value, Imported Value, Imported Value, 2011 2012 2013 2014 2015 (‘000 USD) (‘000 USD) (‘000 USD) (‘000 USD) (‘000 USD)
World 4,435 4,333 4,401 3,765 3,834
Japan 1,921 1,606 1,115 2,179 1,588
US 1,109 1,565 1,258 727 1,101
Germany 482 27 490 89 456
South Korea 448 834 962 444 403
Vietnam 0 0 0 171 140
Switzerland 53 22 31 38 66
China 111 68 53 31 27
Table 9: List of Supplying Markets for a Product Imported by Thailand Product: Dental drill engines, whether or not it is combined on a single base with other dental equipment Source: International Trade Centre
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Exporter Imported Imported Imported Imported Imported Value in 2011 Value in 2012 Value in 2013 Value in 2014 Value in 2015 (‘000 USD) (‘000 USD) (‘000 USD) (‘000 USD) (‘000 USD)
World 30,426 29,540 31,274 36,997 37,616
Germany 4,043 4,029 5,328 7,780 7,483
US 8,220 7,945 6,777 7,800 6,279
Mexico 0 993 2,530 4,085 6,045
Japan 5,121 4,796 4,269 4,737 5,846
Switzerland 3,213 2,814 2,912 3,157 2,713
South Korea 780 682 748 1,465 1,778
Italy 860 1,106 1,178 1,493 1,350
China 740 664 1,044 1206 1,260
Taiwan 1,134 842 1,447 1,400 967
Pakistan 871 934 888 1,011 941
Austria 1,052 1,367 894 976 877
France 1,368 978 1,075 942 798
Finland 291 149 106 215 461
Table 10: List of Supplying Markets for a Product Imported by Thailand Product: Instruments and appliances used in dental sciences, n.e.s. Source: International Trade Centre
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The total market size for dental appliances and instruments in Thailand, as well as the market size for dental drill engines are displayed in the table below.
Dental Appliances Other Dental Dental Drill Product and Instruments Appliances and Engines Instruments
2009 (USD Million) 1.9 11.1 9.2
2010 (USD Million) 2.3 13.5 11.3
2011 (USD Million) 2.5 16 13.5
2012 (USD Million) 2.6 17.9 15.3
2013 (USD Million) 2.5 19.4 16.9
2014 (USD Million) 2.3 20 17.7
2015 (USD Million) 2.3 20.9 18.6
2016 (million US dollars) 2.4 21.7 19.3
2017 (million US dollars) 2.5 22.9 20.4
2018 (million US dollars) 2.5 23.8 21.3
2019 (million US dollars) 2.5 24.5 22.1
2020 (million US dollars) 2.4 25 22.6
Table 11: Market for Dental Appliances and Instruments by Type in Thailand, 2009-2020 Source: International Trade Centre
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Pricing and Structure of Distribution Chain
When entering the Thai market, it can be an advantage to partner with local distributors or large international distributors as they provide immediate access to an established marketing network and have in-depth knowledge about local regulations. The hospitals purchasers rely to a great extent on their suppliers to update them with information on new equipment, which is another advantage in choosing an already established supplier. Competing on price will prove difficult, so new entrants to the Thai market should focus on product diversity and product differentiation.
There are many local firms distributing dental devices. The table below presents an example list of distributors dealing in dental drill engines in Thailand.
Company Name Number of Product or Number of City Service Categories Traded Employees Asiadent Limited Partnership 1 10 Bang Phlat B.K. Dental Products Co.,Ltd 4 18 Bang Na F.W.Dentogenesis Ltd. 1 40 Talat- Bangkhen F.W.Dentogenesis Ltd. 1 40 Lak Si HEXA CERAM 1 380 San Sai Siamdent 1 120 Huai Kwang Thai Dental Products (TDP) 1 30 Bangna Thai Dental Products Lp 2 15 Klong Toei Table 12: List of Importing Companies in Thailand for a Product Product: Dental drill engines, whether or not it is combined on a single base with other dental equipment Source: International Trade Centre
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Main Barriers
Before importing dental devices, companies are required to obtain a Certificate of Free Sale (or Certificate to Foreign Government) and complete registration for the device to be imported. Dental fillings and crowns need a quality management system certificate (GMP, ISO 13485).
3.6.2 EU Opportunities
Entry Channels
The Thai FDA accepts devices that meet the following jurisdictions' requirements, as demonstrated by a certificate of free sale: the United States (USFDA), European Union (CE Marking), Japan (PAB), Australia (TGA) and People's Republic of China (State Drug Administration).
Key Players and Competitors
Dental equipment and accessories in Thailand are mainly divided into four sub-sectors: dental fillings, dentifrice/toothpaste, hand tools/hand pieces and dental chair units. US dental equipment and accessories lead the total import market with a share of about 34%, as they are considered to be of high quality as well as being competitively priced. US dental equipment is particularly well-received in Thailand due to the fact that many Thai dentists receive their specialised training in the US. In Thailand, the country where a dentist received his/her training is a good predictor of the country where they source their equipment from. As such, except for Germany, the competition from countries other than the US is very limited.
Competitors
Dentsply International Inc. (US)
Dentsply International Inc. is a US-based Multinational Corporation specialising in the manufacturing and distribution of professional, high-quality dental product solutions in more than 120 countries. With over 12,000 employees based across the globe, Dentsply International
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has positioned itself as a global leader with a strong reputation. Dentsply (Thailand) Ltd. operates as a subsidiary of Dentsply International Inc.
J. Morita Corporation (Japan)
J. Morita Corporation is a Japanese company with its headquarters in Tokyo. Its business areas include: the marketing and sales of an entire range of dental systems, instruments, materials and equipment; the development of dentistry system software; the construction of dentistry systems; and support for business services such as opening and managing clinics. In 1989, the corporation established Siamdent Co., Ltd. in Thailand. With technical support from JMorita Manufacturing Corporation located in Kyoto and Manufacturing Corporation located in Saitama, Siamdent manufactures dental chair-mounted units under the BOI scheme of Thailand.
Straumann Holding AG (Switzerland)
Switzerland, Straumann is a global leader in dental implants, and restorative and regenerative dentistry. In collaboration with leading clinics, research institutes and universities, Straumann researches, develops and manufactures dental implants, instruments, prosthetics and tissue regeneration products for use in tooth replacement and restoration solutions or for the prevention of tooth loss. Straumann’s products and services are available in more than 70 countries through its broad network of distribution subsidiaries and partners. In Thailand, its distributor is DKSH (Thailand) Limited, located in Bangkok.
Asiadent (Thailand)
Established in 1994, Asiadent is a dental material retailer with a significant market share in Thailand, especially in the Bangkok region. From January 2002, Asiadent Limited Partnership became one of the leading denture manufacturers in Thailand. The company focuses on international markets such as Norway, Finland, Belgium and Germany. Products of the company include porcelain-fused-to-metal crown and bridge, full-metal crown and bridge, and telescopes.
Asiadent provides products from the following companies:
Heraeus Kulzer GmbH & Co. KG. (Germany)
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Al Dente Dentalprodukte (Germany)
Acurata (Germany)
Feguramed GmbH (Germany)
Georg Schick Dental GmbH (Germany)
ELA (Germany)
Galloni (Italy)
Alphadent NV (Belgium)
Buffalo Dental Manufacturing Co., Inc. (US)
Kalantidi Bros. (Greece)
Shiken Corporation (Japan)
European Companies Active in Thailand
ASAlaser (Italy)
ASAlaser (ASA) is an international company with its headquarters in Italy. Its products include hilterapia, MLS (Multiwave Locked System) laser therapy and magneto therapy.
In collaboration with the Thai local distributor Dental Siam and IMS, ASA participated in the second meeting of the TDA (The Dental Association of Thailand) Congress in May 2015 to give visibility to MLS therapy as an effective solution in treating temporomandibular disorders and craniofacial pain in Thailand. The Company has held many seminars and training with different hospitals in Thailand to improve skills and optimise the results achievable with laser therapy.
In addition, the company also has 2 official distributors in Thailand; Enraf Nonius and Integrated Medical Services Co.ltd
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Al dente Dentalprodukte (Germany)
Al dente Dentalprodukte is a German company focusing on the production of dental products, particularly sculpturing waxes, prefabricated wax parts, chemicals and the whole range of thermoforming technique. Their innovative designs and developments include:
Wax sprues developed in its technically most ideal shape (applied for utility patent at the German Patent and Trademark Office)
CAD/CAM Scanwax (applied for utility patent at the German Patent and Trademark Office)
Water-removable Die spacer/scan spacer (applied for utility patent at the German Patent and Trademark Office)
Laser Weld Joints for combined techniques (applied for utility patent at the German Patent and Trademark Office)
Diagnosticwax in Vita-shades, etc.
In the Thai market, the company has distributed its products through the distributor Asiadent, who also distributes dental products of many other manufacturers. Asiadent is located in Bangkok.
Galloni (Italy)
Aseg Galloni S.p.A. Company, established in Italy in 1948, was the first company in the world to produce electronic induction machines for melting and casting special metals, precious and non- precious alloys for the global jewellery and dental markets. The company also sells its dental products through distributors worldwide, and in Thailand, through Asiadent.
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4. Regulatory Framework
The Medical Device Control Division of Thailand’s Food and Drug Administration (FDA) is responsible for protecting consumer health by ensuring the quality, safety and efficacy of medical devices in Thailand. All devices are regulated under the Medical Device Acts BE 2531 and 2551, passed in 1988 and 2008, respectively.26
The Medical Device Control Division of the FDA is responsible for regulating, controlling and monitoring the use of medical devices in Thailand (Teerawattananon et al., 2003). By law, a device is licensed in the market if it achieves the performance intended by the manufacturer and meets standards for personal safety. Unlike pharmaceutical products, there is no requirement for clinical efficacy evaluation from randomised control trial before market approval. The Medical Device Control Division also controls post marketing, such as inspection of manufacturing factory and implementation of appropriate measures when the unsafe medical devices are reported (Asia Pacific Observatory on Health Systems and Policies, 2015).
According to the revised Medical Device Act BE 2551 (2008), the assessment of the social, economic and ethical impact of medical devices with a cost exceeding 100 million Baht (US$ 3.3 million) is mandatory before market authorisation (Teerawattananon et al., 2009). The Ministry of Public Health (MOPH) needs to designate health technology assessment (HTA) units in and outside the country to conduct these assessments, the costs of which shall be shouldered by the industry. There is neither a price ceiling nor a reference set for medical devices such as orthopaedic instruments or services provided such as computed tomography (CT) scanners. Price is determined entirely by market demand and supply. There is no reimbursement list for medical devices. Their distribution is controlled implicitly by the suppliers.
26 Pacific Bridge Medical (2013). http://www.pacificbridgemedical.com/publication/thailand-medical-device-update-2013/
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4.1 Medical Device Classifications
Foreign medical device companies wishing to sell their products in Thailand must first register them according to a risk-based classification system. In Thailand, Class I devices — called “licensed” devices — have the highest risk classification. They are more stringently controlled than Class II and Class III devices, which are referred to as “notification” and “general” devices. Classification requirements are as follows:
1. Class I “licensed” devices — these are the only products that require full registration and a Product License from the Thai FDA. Only seven medical devices are included in this category:
Condoms
Examination gloves
Surgical gloves
Sterile hypodermic disposable syringes
Sterile insulin disposable syringes
HIV test kits for diagnostic use
Contact lenses
2. Class II “notification” devices — these items require notification to the Thai FDA before they can be imported and put on the market. They include:
Physical therapy products
Alcohol detectors
Implanted silicone breast prostheses
Breast enhancements
HIV test kits for research and study
3. Class III “general” devices — these are any medical devices that do not fall into the “licensed” and “notification” categories, and cover nearly 90 percent of all applications. Once a
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general medical device has been validated, it must have an Import License before it can be imported to or sold in Thailand.
Documents required to import a Class III “general” medical device into Thailand include:
A Certificate of Free Sale and the Good Manufacturing Practice (GMP) Certificate from the country of manufacture
Two copies of the company’s Commercial Registration
A copy of the company’s establishment documents
4.1.1 Medical Device Labelling
All medical devices sold or marketed in Thailand must be labelled in Thai and include the name, category, and type of medical device, the name and location of the manufacturer or importer, the intended use, instructions for usage and storage, warnings and precautions, and the License number, if it is a Class I medical device.
4.1.2 Advertising
Before advertising medical devices, it is necessary to obtain a license from the FDA. Category 1 and some Category 2 medical devices can only be advertised to healthcare professionals (Baker & McKenzie, 2016).
4.2 Import License Requirements
Importing medical devices into Thailand requires registration with the Food and Drug Administration of Thailand and of the Ministry of Public Health. Medical devices are regulated by the Medical Device Control Division of the Thai FDA. To import medical devices into Thailand, an importer must have an import authorization and registration permit from the Thai FDA prior to shipment. Thailand prohibits the import of used/refurbished medical equipment. In addition, devices that cannot be marketed or sold in the country-of-origin will not receive permission to be registered in or imported into Thailand (Netherlands Embassy in Bangkok, 2016).
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If all required paperwork is properly completed and submitted in a timely manner, it takes the Thai FDA between 3 – 5 months to issue an Import License for a Class III “general” device. Once the FDA issues an Import License, the Thai Customs Office is notified to permit clearance of the Class III medical device when it arrives in Thailand.
Documents required to import a Class III “general” medical device into Thailand include:
A Certificate of Free Sale and the GMP Certificate from the country of manufacture. The Certificate of Free Sale must include the name of the manufacturer, assembler or packager and location; the name of the medial device with a list of classification information including model, type, size and product code; and documentation showing that the medical device is sold in the country of manufacture. The GMP certificate must include the name of the manufacturer, assembler or packager and location; the classification and type of medical device manufactured; and the period of validity for the GMP certificate. If the period of validity is not specified, the GMP certificate should not be more than two years old.
Two copies of the company’s Commercial Registration
A copy of the company’s establishment documents
4.3 Regulatory Risk
After complaints by patients about overcharging at private hospitals, the government has discussed imposing some controls on charges. The setting of benchmark prices for medicines may cause private hospitals to be more conscious about raising their prices and therefore also increase investor concerns about listed hospitals’ performance (Thanachart Securities, 2015).
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Bibliography
Asia Pacific Observatory on Health Systems and Policies. (2015). The Kingdom of Thailand Health Sector Review.
Baker & McKenzie. (2016). Promoting Medical Products Globally. Handbook of Pharma and MedTech Compliance, Thailand.
BMI. (2016). Thailand Medical Devices Report.
BOI. (2016). Thailand's Medical Hub.
Case-Smith, J. (2005). Occupational Therapy for Children. St. Louis: Elsevier Mosby.
Disabilities Thailand and Network of Disability Rights Advocates. (2016). Thailand CRPD Alternative Report for the UN Committee on the Rights of Persons with Disabilities.
Export.Gov. (2016). Retrieved from https://www.export.gov/apex/article2?id=Thailand-medical- devices
J. Sunkpho, P. K. (2014). Thailand New ICT Master Plan to Promote ICT Innovations and Services for e-Ageing.
Kasikorn. (2015). Medical Device Industry in Thailand; Opportunities for Japanese Manufacturers.
Lersilp, S., Putthinoi, S., & Chakpitak, N. (2016). Model of Providing Assistive Technologies in Special Education Schools.
Medical Devices Industry Overview in Thailand. (2010, September 2). Retrieved from Today's Medical Developments.
Netherlands Embassy in Bangkok. (2016). Life Sciences & Health in Thailand.
Pacific Bridge Medical. (2013). Thai Medical Device Update 2013. Retrieved from http://www.pacificbridgemedical.com/publication/thailand-medical-device-update-2013/
Thanachart Securities. (2015). Thailand Healthcare Sector End of the Re-rating.
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