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Opportunities in Thailand’s medical device market

December 1, 2020
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Why this is important to Wisconsin businesses: With just 1.6% of Wisconsin’s medical device exports going to Thailand, there is ample room for growth.

Thailand is one of the top medical device markets in the world, presenting significant opportunities for Wisconsin suppliers in this sector. Estimates from the U.S. International Trade Administration valued the market at $2.7 billion in 2018, and the market is projected to grow by 8-10% annually in the period from 2019 to 2021.

Devices worth around $2.1 billion, or nearly 80% of the total, were imported, making the country highly import-dependent. Local manufacturing is still mostly focused on single-use devices such as test kits, syringes, surgical gloves and catheters. According to data from Thailand’s Office of Industrial Economics, the U.S. is the biggest supplier of medical devices to Thailand, with nearly a 20% market share of total imports.

Thailand is Wisconsin’s largest export market in Southeast Asia, and 12th-largest globally, with total exports of $328.5 million in 2019; however, it accounts for only 1.6% of the state’s medical and scientific instrument exports, indicating growth potential.

Two main factors are driving the growth of the Thai market. The first is growing domestic health care spending, expected to reach $48 billion by 2026 (nearly double recent estimates of $25 billion). Driving this spending is a rapidly aging population, with the number of people over 60 expected to rise to 13.1 million (or 20% of the total population) by 2021, and rising prevalence of non-communicable diseases such as cardiovascular ailments and diabetes.

The second driver is Thailand’s position as an established medical tourism hub. Efforts to obtain international certifications for its health care services have made the country Asia’s top medical tourism destination. In 2019, Thailand ranked fifth in the world in inbound medical tourism earnings, at $589 million, according to research by the World Travel & Tourism Council. The country offers a variety of procedures to tourists, such as surgeries (cosmetic, orthopedic, bariatric, eye), dental procedures, infertility treatment, cardiac procedures and medical checkup programs, supported by world-class medical facilities. Around 50 of the country’s 370 private hospitals are accredited by the Joint Commission International global standard.

In response to growing demand, health care investments are rapidly rising in Thailand. In the first half of 2020, the country’s Bureau of Investment received applications for $400 million in medical-related investments, marking 123% growth compared to the same period last year. Hospitals in Thailand are also expanding. Thonburi Healthcare Group, the third-largest private hospital group in the country, plans to invest about $132 million in 2020.

To support the sector’s growth, Thailand will continue to source solutions and services outside the country, as domestic innovation is still in early stages. Currently, the top five product categories imported by Thailand are electromechanical medical devices, in vitro diagnostic devices, single-use devices, ophthalmic and optical devices, and hospital hardware.

There are also emerging opportunities for digital innovations, as the country has been increasingly using robotic surgery, artificial intelligence, 3D printing, implantable devices, telemedicine (including sensor-based remote health monitoring devices) and health information technology systems. This comes as Thailand 4.0—a 20-year master plan to transition Thailand into Industry 4.0—was launched in 2016, with the medical sector as one of the focus industries.

COVID-19 has accelerated the Thailand 4.0 push, with telemedicine being a key beneficiary. Another area is the deployment of robots among Thai hospitals to reduce the risk of COVID-19 infections by allowing front-liners to remotely communicate, conduct examinations and facilitate medicine deliveries to patients.

Medical devices must be registered with the Thai Food and Drug Administration (FDA) before they can be sold in the country. The Medical Device Control Division under the FDA is tasked with oversight of medical devices. A new notification on classification of medical devices took effect in December 2019, and exporters should familiarize themselves with the new regulation.

In terms of go-to-market strategy, it is recommended to partner with local agents or distributors to help manage issues related to regulations and marketing. For example, a good partner should be able to estimate suitable price points in order to win government contracts. Staying in touch with distributors through regular visits or other means is critical to building successful long-term relationships.

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