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Medical devices industry Overview in Thailand

Medical devices constitute a thriving industry in Thailand, with the country acclaimed as a major health care hub in Asia. The Thai medical devices market in 2010 is valued at US$795 million.

Olivier Languepin

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Medical device Hospital

Medical devices constitute a thriving industry in Thailand, with the country acclaimed as a major health care hub in Asia. Products are imported and exported in superabundance, and Thailand is fertile ground for investment in new projects to manufacture medical devices, equipment and disposables. As the Kingdom has nearly 1,400 public and private hospitals, is headed toward comprehensive health care for all citizens, and welcomes 2 million foreign patients visiting for a range of world-class services each year, clearly the Thai health care industry is on a growth track.

Medical device

Medical devices constitute a thriving industry in Thailand, with the country acclaimed as a major health care hub in Asia. The Thai medical devices market in 2010 is valued at US$795 million.

Even though the market is vibrant, it is also lopsided. Two-thirds of medical devices in the country are imported, with products from the United States accounting for 29% of inbound shipments, according to figures from the Thai Medical Device Technology Industry Association (ThaiMed).

In fact, Thailand needs to import about 10 billion baht in medical devices annually to meet local demand. 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, toward upgrading local production of medical devices to reduce imports.

This comes as Asia has leaped from being a backwater to a modern economy in recent decades. With an improved standard of living across the region, people are living longer. Many Asian countries now have graying populations, meaning that seniors represent the majority. The greater longevity and buying power creates demand for even more medical products.

While Japan and China are the biggest markets for medical devices in Asia, countries such as Thailand, Malaysia and Indonesia are the new hot spots for sales, investment and growth. Southeast Asia’s combined annual trade in the line is projected to soon top US$1.5 billion. Free trade agreements and movement toward universal health care in more countries only point to heightened sales. The Thai government itself continues to make significant strides in universal care for its citizens. In April 2009, the government augmented this special budget, with allocation for the program in 2010 set at 112.8 million baht.

Technological Progress and Investment Opportunity

The National Metal and Materials Technology Center (MTEC) is a key player in the Thai industry. MTEC, which is under the Ministry of Science and Technology, has hammered out a National Strategic Plan for Materials Technology through 2016. The plan aims to improve the quality of life among Thai people by strengthening medical care through domestic development of high-demand materials and equipment.

One measure by the center is the Medical Device Prototype Development Project for enhancing the capability of Thai manufacturers. R&D work carried out in the project will help local medical device suppliers launch new and more sophisticated products and at affordable prices, making life easier for care practitioners, patients and the elderly. This means there is plenty of opportunity for investment in the local medical device industry under the goal of reducing import dependence. And with the Thai and regional market growing, that lends further encouragement to new projects.

The Board of Investment (BOI) offers incentives to both Thai and foreign investors seeking to manufacture medical equipment in Thailand. These include exemption from import duties on machinery, tax breaks, and land ownership rights for foreign investors. The manufacture of medical equipment is considered as a priority activity of special importance and benefit to the country, which will received the maximum 8-year corporate income tax exemption, regardless of location.

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, Bausch & Lomb, Baxter, Boston Scientifc, Carl Zeiss, Diethelm, GE Medical Systems, Guidant, Johnson & Johnson, Medtronic, Philips, Roche Diagnostics, Siemens, Tyco, Sempermed Hoya, Molnlycke Healthcare, Safeskin, and Kawasumi laboratories.

The local industry’s extensive range of product categories can be seen in breakdown figures for January-October 2009 from the Ministry of Commerce. During the 10-month period, Thailand imported 8.47 billion baht worth of products in the category of instruments and appliances used in medical, surgical, dental and veterinary sciences. Exports of these items totaled 11.12 billion baht. For oscilloscopes, spectrum analyzers and other instruments used in checking electrical quantities, and apparatus used in measuring alpha, beta, gamma, X-ray, cosmic or other ionizing radiations, the period’s imports reached 4.51 billion baht and the exports were worth 2.36 billion baht.

Another major category in the industry is spectacle lenses, which totaled 3.81 billion baht in imports and a hefty 19.37 billion baht in exports for January-October 2009. Imports of diagnostic or laboratory reagents hit 3.63 billion baht and exports were just 186.3 million baht in the 10 months. Orthopedic appliances such as crutches, surgical belts, trusses, splints, artificial parts of the body and hearing aids reached 2.06 billion baht in imports and 483 million baht in exports.

The great quantity of medical devices both shipped in and produced locally also includes massage apparatus, psychological aptitude-testing equipment, artificial respiration apparatus, carriages for disabled persons and contact lenses. In November 2009, the government classified contact lenses as a medical device. The following month, test kits for HIV infection received the same treatment.

Public hospitals are still the major consumer in Thailand

Accounting for 60% of medical device purchases in Thailand in 2009, according to figures released by the U.S. Commercial Service. Even so, growth in the local market will be fueled mostly by medical care facility upgrades and replacement of older medical devices with high-end products largely at specialized private hospitals.

Significant investment opportunity exists in this sector, especially for artificial blood vessels, disposable diagnostic test kits, respiratory systems, rehabilitation equipment, orthopedic and implant devices, and neurosurgical devices and accessories.

Thailand, as a leader in Asia, plays a vital role in many regional and international organizations dedicated to promoting the advancement of medical devices in the area. The country hosts numerous conferences on the latest developments in medical research and products. In September 2010, the World Health Organization will be hosting in Bangkok the First Global Forum on Medical Devices. Thailand also takes part in groups such as the Asian Harmonization Working Party and the ASEAN Consultative Committee on Standards and Quality. Both of these strive to achieve conformity in medical device regulations and upgrade professional training in the region.

The local industry is regulated and monitored by the Medical Device Control Division of the Thai Food and Drug Administration, which is under the Ministry of Public Health. The division makes sure that suppliers are properly approved and licensed, and that products used by consumers meet quality and effectiveness standards.

Other agencies and organizations active in supporting the industry, besides the BOI and MTEC, include ThaiMed and the Medical Association of Thailand. Numerous university hospitals and research institutes also contribute to growth, including the Royal College of Surgeons of Thailand, Royal College of Physicians of Thailand, Royal College of Radiologists of Thailand, Radiology Society of Thailand, and Royal College of Orthopedic Surgeons of Thailand.

Source : BOI at  http://www.boi.go.th

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