11. Last Decade Current Decade Next Decade
Types of
Companies
Market
Dynamics
Main Focus
Revenue
MEDICAL DEVICES—BUSINESS OUTLOOK
$153.40 Billion $271.55 Billion $509.25 Billion
More emphasis on quality of treatment
and cure because treatment time was
never a constraint. Invasive procedures
were the golden standard.
Faster diagnosis and prompt therapy
along with patient safety using minimal
invasive technologies
Minimal invasive technologies becoming the
preferred choice; therefore, reducing therapy
duration and post-operative complications.
Consistently increasing number of chronic
cardiovascular diseases led to most
pertinent surgical intervention when
absolutely required.
Improved diagnostic imaging capabilities
coupled with advanced minimally invasive
technologies has led to increased
procedural volume and product uptake.
Advancement in minimally invasive
technology in the form of fully automated,
robot-assisted, minimally invasive cardiac
surgery and continuous diagnostic pre-
operative imaging
Presence of individual imaging, devices,
and pharmaceutical companies, for
example, Johnson and Johnson, GE
Healthcare, and Merck and Co.
Individual companies have started moving
towards intersection, for example, BD and
Novartis.
A definite intersection of applications and
product line between established
companies. For instance, a leading vendor
from the cardiac imaging industry
collaborating with participants from the
cardiac devices and consumables
industries.
Source: Frost & Sullivan
14. KEY CHARACTERISTICS OF THE MEDICAL DEVICE
SECTOR
14
Recognized for its growth potential and relationship with economic development. Certain
market drivers are inevitable
Industry Structure Predominantly SMEs, however large companies have a significant share of
the industry’s total revenue
Highly Regulated: Regulatory landscapes are changing, with increased levels of scrutiny
Reimbursement is Key: Adequate reimbursement is necessary for products to succeed in the
market
Rapid Pace of Advancement/Relatively Short Life Cycle: Average life cycle of about 18
months before an improved product becomes available
Ebb and Flow to Market Demand: Intense competition demands faster times-to-market.
Products can be overtaken by new products, or by events
15. WORLD MARKET GROWTH FOR MED DEVICES
245.7
275.1
303.8 309
328.4
346
366.6
390.5
419.7
454.6
0
50
100
150
200
250
300
350
400
450
500
Market
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
15Source: BMI Espicom Worldwide Medical Market Forecasts to 2018 ($Billion)
16. EMERGO POLL: WHAT ARE THE BIGGEST CHALLENGES YOU FACE?
(SORTED BY RESPONDENT LOCATION )
(SOURCE: EMERGO 2013)
16
17. EMERGING MARKETS TYPICALLY REPRESENT THREE
OPPORTUNITIES FOR MEDICAL DEVICE AND EQUIPMENT
MANUFACTURERS
Local Market
Opportunity
Source of
Innovation
Cost Effective
Manufacturing
Key Questions:
1. What are the specific local market opportunities?
2. What is the future demand for medical devices and
equipment versus today?
3. What are the demand drivers and how volatile are
they?
4. What are the key challenges?
Key Questions:
1. Which companies have established R&D centers
in emerging markets and why?
2. What are the benefits?
3. What are the key drivers of an increased focus
on R&D in emerging markets?
4. What trends exist, if any?
Key Questions:
1. What % of the top players’ manufacturing bases
are in emerging markets?
2. In which countries and why?
3. What are the key drivers shaping the continued
move to manufacturing in emerging countries?
4. What trends exist, if any?Source:
(1) BA Knowledge Repository.
18.
19. SOUTH EAST ASIA: ECONOMIC GROWTH
AND POSITIVE OUTLOOK
• 10 members are Brunei, Cambodia, Indonesia,
Laos, Malaysia, Myanmar, the Philippines,
Singapore, Thailand and Vietnam from US$4.6
billion in 2013 to US$9 billion by 2019.
• These six countries, commonly referred to as the
ASEAN6, make up for more than 95% of ASEAN
economy.
• The ASEAN6 countries’ GDP grew on average 4.55%
in the last 7 years, compared with the poor 0.10%
p.a. for the G6 (the US, Japan, Germany, the UK,
France and Italy).
• The region benefits from a bi-modal population.
While half of those living in ASEAN are under 30,
there are more than 55 million people over the age
of 60, a population larger than Korea and
equivalent to that in South Africa(source: United
Nations Population Fund)
• The implementation of new public health policies
and an ageing population, will further support the
sector’s growth in the mid-term
26. INDONESIA
•US $ 27.62 billion
•Growth 14.9 %
•2018 (F) US $ 61 billion and 2024 (F) US $ 80 billion
Market
•97.2 % of its medical devices
•Market growth steadily exceeding 15% annually during the last 10 years
•Market value of USD 1 billion by 2016, up from USD 593.8 in 2013.
Import
•51% of the healthcare facilities in Indonesia are government-owned
•More than 1.5 million Indonesians travelling abroad for medical treatment last year
•Under present regulations, pharmaceutical or medical device registration can take anywhere from 6 months to 3
years to complete
•The government will add more than 100,000 hospital beds and hundreds of hospitals by 2020.
Healthcare facilities
•Therapies and treatment equipment for cancer
•Clinical laboratory equipment for circulatory problems, infections and parasites, and respiratory problems
•Medical disposables such as syringes, catheters, stomach cups (made from silicone), etc
•Dental equipment for scaling and polishing, bleaching, orthodontics, etc
•Diagnostic equipment such as CT scan slices, x-ray, magnetic resonance imaging (MRI) and other surgical
equipment
•Dermatology equipment such as electrocardiography, acupuncture, skin laser beauty treatments for the skin
The most promising sub-
sectors for imported
medical and surgical devices
OECD Development Centre’s Medium Term Projection Framework,2014 / OECD Economic Outlook for Southeast Asia, China and India, 2014 / Worldbank / ASEAN Finance and Macro-economic Surveillance
Unit Database / ASEAN Merchandise Trade Statistics Database / ASEAN Foreign Direct Investment
Statistics Database / IMF Working Paper, Asia and Pacific Department, IMF, 2013 / Asia 2050, Realising the Asian Century, Asian Development Bank, 2011 / ADB Economic Research Department, 2013 / ASEAN’s
Demographic Dividend, ASEAN Briefing, 2013 / ASEAN Integration and the Private Sector, 2014 /
ASEAN 2030: Toward a Borderless Economic Community, ADB, 2012
32. INDONESIA - MEDICAL EQUIPMENT
2014 2015 2016 (est.) 2017 (est.)
Total Market Size 1,739 1,864 2,000 2,149
Total Local Production 1,200 1,320 1,452 1,598
Total Exports 165 182 201 221
Total Imports 704 726 749 772
Imports from the U.S. 111 114 118 122
Data Source: Indonesian Medical Device Producers Association (ASPAKI), Statistics Indonesia (Badan Pusat Statistik), and U.S. Department of Commerce TradeStats Express
Last Published: 6/27/2016 Unit: USD millions
33. FOREIGN MEDICAL DEVICES REGISTRATION
Incorporation
Limited Liability
Company
(PT PMA)
Izin Usaha
(Permanent
Business License)
from BKPM
Izin Penyalur Alat
Kesehatan / IPAK
(Medical Devices
Distributor
License)
Izin Edar
(Distribution of
Medical Devices
License) from
Ministry of Health
(MOH)
46. INDONESIAN HEALTH CARE : EXECUTIVE
SUMMARY
Indonesia’s spending on health care is one of the lowest in ASEAN. The country requires significant investment
to expand and upgrade its poor health care infrastructure
The recent introduction of Indonesian Government supported Universal Health Coverage (UHC) for all citizens
and residents provides opportunities for investors to develop the health care sector
The rising middle class is expected to drive demand for affordable health care
The rising middle class, with its rather unhealthy lifestyle, is expected to drive an increase in lifestyle-related
diseases.
Indonesia faces a shortage of hospitals, with rural areas being most severely underserved
Foreign investors are allowed to operate specialized hospitals in a market where only 23% of hospitals are
specialized
47. INDONESIAN HEALTH CARE : EXECUTIVE
SUMMARY
Building a new hospital from scratch is difficult, due to a lengthy and complicated licensing process. This
barrier to entry attracts investors to existing small hospitals that have the potential for improvements
Qualified doctors and nurses are in high demand, but the education system has yet to increase its capacity
The AEC could address the lack of qualified doctors, but new barriers are making it harder for foreign doctors to
practice in Indonesia
A high conversion rate of hospitals serving UHC and private patients can translate into higher profitability
through increased out-of-pocket spending and it can help shorten ramp-up time
The Indonesian Government is committed to supporting the UHC scheme
BPJS Health premiums are likely to increase
50. Local Content (TKDN)
Domestic Component
Domestic Component + Imported Component
%TKDN X 100%=
• The component consists of :
- Direct cost of material
- Direct cost of manpower
- Non-direct cost of factory overhead
• Determination of domestic component:
- Country of origin of material
- Ownership of the facilities and equipment
- Citizenhip of the manpower
• R&D cost can be assessed in TKDN, with term and condition:
- R&D cost was counted in production cost and and distributed to each product price
- R&D was conducted in Indonesia, and was proven with:
Certificate in Intellectual Property Right
Invoices of R&D cost (product/technology definition, design, prototype, system test
and integration, and production preparation)
51. Government’s
Procurement
(TKDN+BMP) ≥ 40%
TKDN ≥ 25%
(TKDN+BMP) < 40%
TKDN ≥ 15%
Mandatory to use
Domestic Product*)
Both Domestic and Imported
Product can participate in
the selection on the procurement
*) as long as the Domestic
Product can fulfill the
specification, amount, and
time required with normal
price
BMP : Award for company who invest in Indonesia and:
- empower SMEs through partnership,
- has certificate in HSE Management,
- do community development/CSR,
- provide after-sales service
55. You are driving a car.
On one big storm night.
You are passing a station.
56. There are three people who are waiting for the bus
One doctor who saved your life before.
One guy/lady who is someone you have been
dreaming to get married to.
One old lady who is dying.
57. You can only take one passenger,
which one you will choose?
Please explain your reason.