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    Healthcare

    Myanmar

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Overview

MYANMAR HAS THE LOWEST HEALTHCARE SPENDING (~2% OF GDP) IN SOUTHEAST ASIA

The healthcare infrastructure in Myanmar is still below global standards, with as much as ~70% of the population residing in rural areas. Yangon, Mandalay and the capital city of Naypyidaw are the three regions in the country that are able to provide adequate healthcare services for patients. Lack of investments along with foreign sanctions (such as barring international NGOs to provide health services) during the military regime limited the country’s public health system to shambles in the past decade.

Healthcare Expenditure (% of GDP) – 2014



Healthcare Expenditure (% of GDP) – 2014

Per Capita Total Healthcare Expenditure
(US$) – 2014

Per Capita Total Healthcare Expenditure (US$) – 2014

Source: Solidiance Research & Analysis, World Health Organisation (WHO),Ministry of Health (MOH).

Only after 2010, in which a democratic government came into power, that the country and all its systems embrace market liberalization and started to focus on healthcare. In 2010, Myanmar was identified as the only Asian developing country with a defense budget greater than healthcare and education put-together. Myanmar’s liberalized market has now compelled the government to announce a re-allocation of GDP spending with a greater focus on both healthcare and education. in 2012, a letter of intent was signed between the International Monetary Fund (IMF) and the Myanmar Government to increase the nation’s healthcare spending.

Between 2010 to 2014, healthcare expenditure made by the government increased from 12% to 40%. In January 2015, the government also proposed a plan in the parliament to increase healthcare budget allocation at an annual growth rate of 6% in coming years, reiterating their commitment to improve healthcare in Myanmar.

Myanmar Healthcare Expenditure Split
(USD million)

Myanmar Healthcare Expenditure Split (USD million)

Total Healthcare Expenditure in USD billion by Country (est. 2015)

Total Healthcare Expenditure in USD billion by Country (est. 2015)

Source: World Health Organization (WHO), Ministry of Health (MOH), Solidiance Research and Analysis, Asia Development Bank

As only three regions in Myanmar are able to provide adequate healthcare services for patients, Myanmar’s healthcare system is still faced with a number of challenges which result in an overall dismal healthcare offering & delivery. Myanmar has a shortage of doctors as most practicing doctors want to be located in or around big cities. The availability of doctors in tier-2 cities is extremely low and the doctors attending to the sick are mostly underpaid. Moreover, the quality of medicines in Myanmar is also an issue. Many drugs in Myanmar are unregulated or counterfeit.

Challenges faced by the healthcare system:

  • Under-resourced across the country
  • Underpaying jobs & corrupt practices
  • Mediocre education system
  • Poor spending power of people
  • Uneven distribution of population
  • Counterfeit medicines

Myanmar’s new insurance scheme:

In July 2015, the Myanmar government approved to sell “Health Insurance” to the public through Myanmar’s Insurance and 12 private insurance companies.

  • Cost of one health insurance unit is MMK 50,000, or approximately USD 45 – and a person can buy up to 5 units
  • The coverage of healthcare expenses for one unit of health insurance is mainly for hospitalization expenses, which is MMK 15,000 per day for five times in 30-day period of hospitalization (up to 150 days)
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Hospital

THERE ARE SIGNIFICANT NEEDS IN MYANMAR’S HEALTHCARE INFRASTRUCTURE THAT REQUIRE FOREIGN INVESTMENTS

Public tertiary care hospitals cater to specialized medical treatments and services in big cities like Yangon, Mandalay, Nay Pyi Taw, and Taunggyi, while government hospitals offer medical services to the Ministry employees only, with the public primary care hospitals catering to bulk of the population by working with local communities.

Yangon region has the highest number of hospitals in Myanmar (119 hospitals in total) compared to that in other regions – of that, 72 hospitals are owned by the public sector while 45 hospitals are privately owned.

Hospitals by level, est. 2015 (1,225 Hospitals)


Hospitals by level, est. 2015 (1,225 Hospitals)

Hospital Beds by sector, est. 2015 (73,140 Beds)


Hospital Beds by sector, est. 2015 (73,140 Beds)

Source: World Health Organization (WHO), Health System Review 2014 Report from Ministry of Health (MOH), Solidiance Research and Analysis

Private hospitals are concentrated in major cities, while public hospitals have a stronger geographic presence and are spread out across the country


Public hospitals account for ~86% of total hospitals, but are far behind regional quality standards, while private hospitals account for 14% of total hospitals and contribute to 7% of total beds in Myanmar.

In public hospitals, selected basic medicines and lab tests are being offered free of charge for poor and emergency patients since late 2014. There has been an ~10% increase in the number of private hospitals between 2011 and 2015.

Comparison between countries in terms of total number of hospitals, est. 2015

Comparison between countries in terms of total number of hospitals, est. 2015

Private and Public Hospitals Distribution across the country, est. 2015

Private and Public Hospitals Distribution across the country, est. 2015

Source: Central Statistical Organization, Ministry of Health (MOH), Myanmar Private Hospitals’ Association, Solidiance Research & Analysis

Most private hospitals in Mandalay and Nay Pyi Taw have less than 25 beds highlighting the need for more hospitals with larger capacity

Private Hospitals in Mandalay by No. of Beds, est. 2015

Private Hospitals in Mandalay by No. of Beds, est. 2015

Private Hospitals in Naypyidaw by No. of Beds, est. 2015

Private Hospitals in Naypyidaw by No. of Beds, est. 2015

List of hospitals with >=25 beds in Mandalay

List of hospitals with >=25 beds in Mandalay

List of hospitals with >=25 beds in Nay Pyi Taw

List of hospitals with >=25 beds in Nay Pyi Taw

Source: Solidiance Research & Analysis, Central Statistical Organization, Ministry of Health, Myanmar Private Hospitals’ Association.

Medium-priced private hospitals are unable to cater to the high demand of growing middle and upper middle class

High price private hospitals

~90 USD

per night
Myanmar Automotive Consulting
  • Known to be one of the more high-priced private hospitals in Myanmar, Punhlaing Hospital is the first to introduce foreign medical collaboration programs for patients.
  • Although considered to be too expensive for the common Myanmar citizen, the hospital provides an extensive range of primary to tertiary medical services with advanced medical treatment comparable to international standards.

Medium priced private hospitals

~50 USD

per night
Myanmar Automotive Consulting
  • Medium priced private hospitals such as SSC Hospital are enjoying growing demand among middle class and upper middle class due to its reasonable room rate as well as advanced medical equipment.
  • Despite growing demand, there is only less than 10 hospitals in this category, which is very insufficient to address demand for that segment.

Low cost private hospitals

~20 USD

per night
Myanmar Automotive Consulting
  • Middle class mostly prefer affordable low cost private hospitals such as Thukhakabar and Bahosi.
  • However, in case of complicated medical procedure such as bone surgery and stroke, patients have to transfer to medium priced private hospitals as they have more sophisticated equipment there

Public hospitals

Myanmar Automotive Consulting
  • Due to limited private rooms for in-patients and the limitation of medical equipment in public hospitals, majority of middle and upper middle class people prefer private hospitals.
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    Business Development Director Asia Pacific

    Allergan
    Allergan
Pharmaceutical

Yangon and Mandalay constitute to ~60% of Myanmar’s pharmaceutical sales

Myanmar’s pharmaceutical industry is estimated to be ~USD 495 million in 2012. The industry is dominated by Indian pharma companies which are estimated to have ~40% of the market share. Ranbaxy, Dr. Reddy’s & Sun are some prominent Indian companies having operations in Myanmar.

In March 2013, Myanmar announced a reorganization of its Food and Drug Administration (FDA) and to increase staffing from 16 to 600 to focus on :

  • Building additional capabilities in the area of drug registration (curtail issues of pharma black market, trademark enforcements)
  • Support Ministry of Health to update the National formulary (no significant upgrades since the past 20 years)
  • Updating the Essential Medicine List (EML) for Myanmar
  • An easier centralized tendering procedure (currently tendering in government hospitals is very poorly planned tenders at short notice, not well advertised)

Myanmar Pharmaceutical Industry

Pharmaceutical Industry

Source: Solidiance Research & Analysis

Local Pharmacy in Yangon

Local Pharmacy in Yangon

Myanmar Distribution Scenario of Pharmaceuticals

Pharma distribution is considered the key success factor in Myanmar. Yangon houses the largest pharma wholesale of the country. The market has two Tier 1 multinational distributors. Distribution of pharmaceuticals is considered as the main challenge in Myanmar.

In the absence of a strong tendering system, a strong distribution partner is alone considered as the most crucial factor for success in Myanmar. A good distributor should have strong relationships and access to its customers. It should be aware of floated tenders. In light of the corrupt business practices present in the country, this success factor also poses as a compliance risk to the multinationals. Mingalar Market of Yangon house 100s of distributors, wholesalers and dealers for medicines of varied sizes. Mingalar market has been historically considered the central point of pharma distribution across Myanmar.

In the organized distribution, there are only two Tier 1 distribution companies in Myanmar :

  • DKSH - from Switzerland (In Myanmar since 1998 - 7 owned warehouses across Myanmar)
  • Mega Life Science – from Thailand – In Myanmar since 1995

Mingalar market of Yangon is the largest pharma wholesale market of the country

 

Mingalar Market
Mingalar Market

Source: Solidiance Research & Analysis

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  • “Solidiance’s findings and recommendations have helped us to gain a better understanding and make strategic decisions on our business expansion plan in this specific Asian emerging country. I am therefore happy to recommend Solidiance as a reliable partner to any company requiring consulting capabilities in the Asian medical device areas.”

    Global Market and Competitive Intelligence Director

    Covidien
    Covidien
Medical Devices

Myanmar is experiencing emerging opportunities in medical diagnostic devices driven by political and economic reforms, as well as demographic changes

The medical device industry of Myanmar has witnessed a recent increase in demand, complimented by the market entry of prominent international medical device companies in recent years. Medical facilities in Myanmar have been looked down upon historically; one of the factors contributing to this impression has been a shortage / usage of outdated medical devices and equipment due to the neglected healthcare system.

However, demand for medical devices is steadily increasing since 2012 primarily because of:

  • Government announced increase in healthcare spending
  • Private Hospitals want to offer better healthcare facilities

GE Healthcare’s national distributor – SeaLion’s office in Yangon

GE Healthcare’s national distributor – SeaLion’s office in Yangon

Source: Solidiance Research & Analysis

Prominent International players in Myanmar’s Medical Devices Industry

Prominent International players in Myanmar’s Medical Devices Industry

Leading international medical devices players such as GE entered Myanmar in 2012-13 making it easier to import and service such sophisticated equipment such as CT scanners, X-rays, MRI and CT simulators.

Ministry of Health as well as some private hospitals are enquiring, replacing and upgrading their outdated equipment:

  • In 2012, GE won the tender to supply 22 CT scan machines and 4 CT simulators for training to the Ministry of Health
  • GE also supplied X-ray machines to prominent private hospitals such as Pun Hlaing
  • Toshiba has recently supplied X-ray machines to a few local clinics of Yangon
  • Philips introduced Myanmar’s first PET/CT imaging system in May 2013. This will be installed in Yangon General Hospital
  • Siemens had previously supplied CT scanners to prominent hospitals such as Asia Royal

Recent Entrants in Myanmar’s Medical Device Sector

Company GE Healthcare Toshiba
Year of Entry to Myanmar
  • Signed agreement in 2012
  • First American company to enter Myanmar after USA eased sanctions against Myanmar in 2012
  • Setup office in 2012
  • Claim to be serving the market from Thailand since past couple of years
Mode of Entry Entered Myanmar through a national distributor – SeaLion – for sales/support
  • Entered Myanmar directly – by banking on past experience gathered
  • Sales office in Yangon
Sales
  • Immediately on entering Myanmar, GE signed a US$ 2mn deal to supply X-ray machines to Pun Hlaing & Bahosi Hospital in Yangon
  • All machines are imported and average waiting time is 2-3 months
  • Delivered ~20 CT scanning machine, 9 X-Ray & 2 MRI machines till date
All machines are imported from Japan. Average waiting time is 1-3 months
Product Training Experts fly from Thailand to offer product training on product delivery Experts fly from Japan to offer product training on product delivery
After Sales Support & Troubleshooting
  • Local teams of SeaLion in Yangon & Mandalay attend complaints within 24 hrs
  • Email based trouble shooting from GE Healthcare, Thailand
  • Warranty : 1yr in most cases
  • Preventive Maintenance contracts : for annual servicing
  • Currently no local team to service complaints on the ground. For issues, fly engineers from Japan/Thailand
  • Warranty : 1yr in most cases

Source: Solidiance Research & Analysis

Myanmar’s DI and IVD equipment: in demand and rising

Diagnostic Imaging (DI) segment is expected to grow with the introduction of better quality devices and rising public health awareness. Basic DI equipment (e.g. x-ray, ultrasound) are available in public hospitals and private clinics, while advanced DI devices are found in specialized hospitals and large private hospitals in major cities. However, the middle to upper income group tend to go to the private hospitals due to the better quality of services and 24 hours service availability.

Myanmar's Share of Diagnostic Imaging Tests by Facilities in 2014

Myanmar's Share of Diagnostic Imaging Tests by Facilities in 2014

Source: Solidiance Interview & Analysis

Medical Tourism

In recent years, Myanmar has witnessed the surge in outbound medical tourism by rising affordability and increased internationalization

Although Myanmar patients has travelled abroad for medical treatment since late 90s, the outbound medical tourism has been experiencing significant growth after 2010 after post economic reforms which has resulted in growing income as well as increased internationalization.

Due to having more sophisticated medical technology abroad, patients in the upper middle class income group prefer to have medical treatment abroad for complicated and fatal diseases. Apart from medical check up, cancer, kidney and liver transplant, heart surgery and orthopedic problems such as hip replacements are key areas for getting medical treatment abroad.

Rising outbound medical tourism in Myanmar

Rising outbound medical tourism in Myanmar

Major medical tourism destinations

Major medical tourism destinations


Although Burmese patients travel as far as western countries like U.S and Europe, majority of the people go to Thailand, Singapore and India.

Thailand hospitals take up more than ~50% of the total outbound tourism market for Burmese patients.

Source: Solidiance Interviews & Analysis, Irrawady, International Medical Travel Journal, Myanmar Hospital Clinical Investment Summit

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  • “The systematic and detailed approach adopted by the Solidiance team has helped to provide an in-depth analysis for the specific businesses in the country we are interested to enter. Their findings and recommendations have helped us gain a better understanding and make strategic decisions on our business expansion plan in this specific emerging country. I am therefore happy to recommend Solidiance as a reliable partner to any company requiring research and consulting capabilities in the medical areas.”

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    Boston Scientific
    Boston Scientific Asia Pacific
About

About Solidiance

Solidiance is a corporate strategy advisory firm advising CEOs on make-or-break deals and defining market-specific business models for Fortune 500 companies and Asian conglomerates looking to leverage Myanmar's unprecedented growth. Our Myanmar experience includes market entry and growth strategy projects across various sectors with a particular focus on the healthcare system in the country.

Our full-time in house team of local Myanmar consultants has extensive experience and expertise in advising clients across the hospitals, pharmaceuticals and medical devices segments, equipped with the most up to date market insights and an extensive network of relevant healthcare sector contacts on the ground. Recent projects include advising a leading private hospital chain looking to establish a branch in Myanmar, a major European pharmaceutical firm exploring opportunities and market insights in the transplants and cardiovascular drugs segment in Myanmar as well as a key global medical device manufacturer aiming to accelerate its top line growth for diagnostic X-ray equipment (Analog, computed radiography, digital radiography) in Myanmar through new customer targets and channels. From understanding the Myanmar healthcare regulations, drugs / devices registration processes, FDA engagement, Myanmar government healthcare funding plans and current network of hospitals by regions and number of beds to estimating the market size with forecasts and impact / source of parallel imports, Burmese outbound medical tourism, competitive landscape, identifying the key decision makers and influencers along the distribution value chain or finding the right distribution partner for pharmaceutical drugs or devices in Myanmar, Solidiance offers flexible customized solutions to cater to the specific needs of our healthcare clients.

Solidiance has been working on healthcare projects since we established our presence in Myanmar in 2011. Our Yangon office is part of a network that extends across Asia with offices in China, India, Singapore, Thailand, Vietnam, Indonesia, Malaysia, Philippines, UAE and Lebanon.

For more information, contact us at info@solidiance.com

About

Myanmar Healthcare Consulting Team

Damien Duhamel

Damien Duhamel

Managing Partner Asia Pacific

 

Damien Duhamel is the co-Founder & Managing Partner of Solidiance and has worked on hundreds of growth strategy engagements with Fortune 500 clients. Based in ASEAN for the last 22 years, Damien is a recognized Innovation and Asia Competitive Strategy expert. His thought leadership has been featured on various media: AFP, Business Insider, BBC, Bloomberg, CNN, CNBC, New York Times, Wall Street Journal, and several Asian publications.  Damien speaks English, French, and Vietnamese.  He holds a Bachelors Degree in Business from the Victoria University, an MBA from the Chicago Booth School of Business and is completing a Master of Sustainability and Environmental Management at Harvard University.

 

MICKAEL FEIGE

MICKAEL FEIGE

Partner

 

Mickael Feige is a Partner based in Thailand and responsible for Bangkok and Yangon offices. He manages large projects for Fortune 500 in various sectors with a strong focus on healthcare. His expertise lies mostly in market entry, growth strategy, product launch, commercial problems diagnostics and commercial due diligence. In healthcare, Mickael advised several global companies in medical devices (dialysis, endoscopy, pain management, imaging systems) pharmaceuticals (oncology, diabetes) and private hospitals (M&A and market entry). Mickael speaks French and conversational Japanese. He holds a Masters Degree from a joint program between Lyon Political Science Institute and Senshu University. He holds an MBA from INSEAD.

 

Naithy Cyriac

Naithy Cyriac

MANAGER

 

Naithy is a Manager based in Solidiance's Yangon office with over 6 years of consulting experience across the pharmaceutical, hospitals and medical equipment sectors. She has adviced MNCs looking to establish their presence in Myanmar, evaluating opportunities in transplants and cardiovascular drugs, invitrodiagnostics and diagnostic imaging devices with an extensive knowledge of the healthcare regulations and registration processes in Myanmar. She has also presented at breakfast events in Bangkok and Singapore on the healthcare sector opportunities in Myanmar. Prior to joining Solidiance, Naithy was a Senior Associate at a Moody’s company, leading healthcare sector M&A and investment projects for private equity and asset management firms. Naithy graduated with an MBA specialization in Strategy & Organisation from the National University of Singapore and Cornell University and holds a Bachelors of Science degree from St. Stephen’s College, Delhi University.

 

Jack Fowler

JACK FOWLER

CONSULTANT

 

Jack is a consultant based in our Myanmar office. His corporate strategy advisory experience in the Myanmar healthcare sector ranges from pharmaceutical distributor search, new drugs registration in Myanmar to private hospital chain market entry support. Before joining Solidiance, Jack worked with an international research firm in Yangon providing services to both public-sector and corporate clients. Jack holds degrees from the University of Manchester and the London School of Economics and Political Science.

 

Shin Thant

Shin Thant

CONSULTANT

 

Shin Thant is a Consultant based in our Myanmar office in Yangon, offering strategic support for market analysis, entry and expansion to private hospitals, pharmaceuticals and radiography device firms looking at establishing their presence in Myanmar and tapping domestically into the significant Burmese outbound medical tourism market. Prior to joining Solidiance, he worked as an audit and advisory associate for KPMG. Shin Thant has obtained his advanced diploma in engineering and accounting and is also member of Association of Chartered Certified Accountants UK (ACCA).

 

Rajan

RAJAN

ANALYST

 

Rajan is an Analyst based in Solidiance's Myanmar office, supporting Fortune 500 and large Asian conglomerates with healthcare market entry and growth strategy analysis covering opportunities ranging from medical imaging equipment market share acceleration to channel development and market sizing for pharmaceuticals. Before joining Solidiance, Rajan worked as a Business Development Manager for one of the largest local firms, building relationships with B2B partners to support market share expansion in Myanmar . He earned his MBA from the University of Sunderland, UK and holds a Bachelors in Law degree from University of Mandalay.

 

Khine Yi

Khine Yi

ANALYST

 

Khine Yi is an Analyst based in Solidiance’s Myanmar office working extensively with clients looking at tapping into the nascent but rapidly growing healthcare sector in Myanmar and recently evaluated expansion opportunities and new customer targets for radiography equipment in Myanmar. Prior to joining Solidiance, Khine Yi has four years experience as a business development executive and project officer at Burmese trading and financial management firms. Khine holds an MBA from the university of Cardiff Metropolitan, UK and a Master in English from University of Pathein. Khine has a pre-intermediate understanding of Chinese Language.

 

Office

Solidiance Myanmar Office

Suite 602, 6th Floor, Danathiha Tower
#790 Bogyoke Aung San Road
Lanmadaw Township, Yangon, Myanmar
Ph: +95 979 700 6465
Email: Solidiance
Web: www.solidiance.com

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