Thailand is one of the world’s centers for medical services, with over 1,000 public hospitals and 400 private hospitals operating at international standards, offering the perfect climate for investment in healthcare, medical devices and pharmacy. It has world-class technology infrastructure, and offers the most advanced treatments by overseas-trained doctors and a multilingual staff to ensure that there are no communication barriers. Doctors are experts in their felds and nurses are registered and well trained.
Recognizing the available market and the ability to deliver medical treatment at a fraction of the cost as most countries, in 2004 Thailand’s government adopted a 5-year strategic plan to develop the country’s capacity into the “Center of Excellent Health of Asia”. This plan, advanced by the Ministry of Public Health, focuses on three main areas of healthcare: medical services, healthcare services, including spas & traditional massage, and Thai herbal products.
In the course of those fve years, opportunities have grown exponentially as Thailand has in fact become a medical hub in Asia, with state-of-the-art facilities. Today, nearly 2 million foreign patients visit Thailand each year for a range of healthcare services, including cutting edge procedures like stem cell treatment. And, the domestic drugs and medical market has grown to over US$1 billion. As the health care infrastructure expands and investment in high-technology equipment soars, the medical device sector and pharmaceutical sector are also experiencing significant investment potential. Beyond the excellent medical services, patients receive personal service befitting Thailand’s reputation for care with wait-times kept to a minimum.
Some of the leading hospitals catering to foreign medical-tourists assign patients a personal assistant who will walk them through the entire process from the front door, to their appointment with the doctor, to the onsite pharmacy to fill prescriptions, and to clearing all receipts for insurance reimbursement. Patients are kept informed of wait times and of what to expect throughout their stay.
One notable hospital boasts a staff of doctors that can speak a dozen major languages in addition to their 60 staffed interpreters. Other hospitals possess interpreters in over 2 dozen languages. Great efforts have been made to accommodate the increasing number of international patients. Expatriates, executives of international corporations and embassy staff can attest to the excellent health care treatment in Thailand and to its competitive rates. For example, elective surgeries in Thailand’s best private hospitals are often one-tenth the cost of the same surgeries in some western countries.
Popular treatments among foreign patients include general checkups, dental care, hip replacement, laser eye surgery, kidney transplants and heart surgeries.Thailand’s status as a destination for medical outsourcing is being driven by the quality, cost, and care that it offers. In addition, increasing costs and decreasing coverage of foreign health care systems provide added impetus for growth in Thailand’s medical services. For example, insured Americans are being given the option of having surgeries performed overseas, which adds to Thailand’s potential as the premier medical service destination.
At the same time, the legions of uninsured or those just seeking the best service and care available will continue to drive growth in Thailand’s medical industry. The sector’s annual growth rate has hovered around 14%, with major surgical procedures and standard medical care soaring.Thailand’s private hospitals employ leading technology and international standards. Many have the most advanced medical equipment, including the 1st MRI (3 Tesla) in Asia–which offers better diagnosis without injection of contrast media.
Moreover, speedy mobile services like helicopters and other aircraft are available and patients’ records can be obtained in an instant via the internet.Many private hospitals have established partnerships with 1st-class international medical schools and health care institutions both in Europe and in the United States. Additionally, they have been recognized and approved to the standards of the Hospital Accreditation (HACC) of Thailand such as ISO 9002, ISO 900:2000, ISO14001, ISO 18000 and Joint Commission International Accreditation. While Thailand excels in the medical care it delivers on a daily basis to patients from over 190 countries, the kingdom is also gaining recognition as a location for research and clinical trials of advanced medicine and for stem cell treatments. In 2008, the transplant of bone marrow blood stem cells for leukemia patients became authorized for use in Thailand.
As Thailand continues its ascent as the medical hub of the region, considerable opportunities in related fields are being created. For example, the medical device sector will continue to see healthy growth to meet the demands of healthcare facilities for new and upgraded medical machinery and devices. In 2008, within the medical device sector, oscilloscopes & spectrum analyzers enjoyed a 32% growth over the previous year. During the same period, diagnostic and laboratory reagents increased 20%, and apparatus based on the use of X-rays, alpha, beta or gamma radiation rose 17%.
Private hospitals consistently record healthy growth, which then leads to increased demand for imported drugs. Moreover, additional imported drugs were placed on the National List of Essential Medicines. With a robust chemicals industry and great biodiversity to support pharmaceutical manufacturing, Thailand imported US$1 billion in pharmaceutical products in 2008 – an increase of 18% over the previous year. The major sources of these imports were France, the United States, Germany, Switzerland and the United Kingdom. These countries accounted for more than 45% of the total pharmaceutical products imported into Thailand.
In 2008, the export value of medication was US$164 million – a rise of 9% over the previous year. Thailand’s primary export destinations are Vietnam, Myanmar, Cambodia, Malaysia, Hong Kong, and the Philippines, which together accounted for 70% of total pharmaceutical exports.
Thailand has taken on groundbreaking research. For example, researchers are experimenting with rice starch that is extracted from broken rice by pulling out proteins to get pure carbohydrate four, which can be used as fller in drug tablets helping them hold their shape and release drugs more effectively. Demand is high as the cost is roughly 20% of other fller materials. Thailand is also investing in research and development for tropical diseases such as dengue fever and malaria, among others, and invites investments into biotechnology research.
For example, BIOTECH-Novartis International Pharmaceutical Drug Discovery Partnership (A 3-year partnership) was initiated in 2005 with the goal of identifying potential uses of micro-organisms and natural compounds as sources for innovative medicine. The research partnership has recently been extended for another 3 years to May 2011. Safety and quality are the guiding principles, as local pharmaceutical manufacturers must comply with the International Pharmaceutical Inspection Convention and Pharmaceutical Inspection Cooperation Scheme (PIC/S) by 2008. International standards coupled with fervent pharmaceutical industry growth make Thai land an extraordinary investment location.
Opportunities for investment in the medical food sector also continue to grow with generous support from a new investment policy from the government, rich agricultural resources, investments in international quality standards and technology. As a result, it offers an excellent location for cost-effective manufacturing of medical food. Major suppliers of medical food in Thailand include, among others: Mead Johnson Nutrition, Abbott and Novartis. In fact, Thailand’s strategic position enables Mead Johnson’s Chonburi manufacturing and R&D center – its largest outside of the US – to serve as a hub for its Asia Pacific operations. The company serves domestic and global markets demands.
The Board of Investment of Thailand (BOI) grants attractive tax incentive to investors in the medical sector that include exemption from import duties on machinery throughout the period of promotion in all zones. In this regard, there are two categories of investment that include Priority for Medical Supplies, which receive an 8-year exemption regardless of investment zone, and the Active Ingredient category, which receive incentives, but is zone-based. Further, the manufacture of medicine and/or active ingredients in medicine that achieves GMP standards prescribed by PIC/S within 2 years of the date the project commences operations receives an exemption from corporate income tax for a period of 8 years for projects in Zone 3; 7 years for projects located in an industrial estate or a promoted industrial zone in Zone 2; 6 years for projects in Zone 2; and 5 years for projects in Zone 1.
Apart from attractive tax incentives, the BOI also provides non-tax incentives such as land ownership rights for foreign investors, permission to bring in foreign experts and technicians, and work permit and visa facilitation for expatriate employees.
In addition, the BOI has announced with Thailand Investment Year 2008-2009 package, the following eligible activities:
• Medical food – new BOI category
• Manufacture of medical supplies or medical equipment
• Manufacture of scientific equipment
If investors apply for promotion within the TIY, extra privileges applied to projects would include a 50% reduction of corporate income tax for 5 years; a double deduction of transportation, electricity and water supply costs for 10 years; and a 25% deduction from net profit for facility installation and construction costs in addition to normal capital depreciation.
This Thailand Investment Year package will be granted to all qualified projects located anywhere but Bangkok, with a condition that the applications must be submitted within December 2009.