International Markets – Nov 2017

International Markets

Australia

  • According to the Australian Health Policy Collaboration at Victoria University poorest 10 million Australians are far more likely to die of preventable illnesses while many of the country's most affluent are more likely to engage in risky drinking. The reports states that a huge proportion of the population is at high risk of dying early from chronic diseases and other often-preventable conditions (The Sydney Morning Herald)
  • According International Health Policy Survey by the Commonwealth Fund: Australia’s health system ranks best on efficiency and healthcare outcomes after UK. It noted that many Australians feel that healthcare should be more affordable and efficient due to high out-of-pocket costs and long hospital wait times
    • The Australian healthcare industry is heavily regulated and expensive to innovate therefore adopting digital services has been slow and fragmented
    • To address this issue the Council of Australian Governments recently endorsed the Australian Digital Health Agency’s Strategy
    • This agency aims to deliver coordinated health information through digital channels to tailor and improve the quality of Australian healthcare
    • It will work towards integrating existing digital health initiatives and unifying future investment in digital health infrastructure (Lexology)

China

  • According to McKinsey and Co, China's healthcare market is projected to grow at a CAGR of about 12% to reach USD 1 trillion by 2020 or up from USD 357 billion in 2011. China will take major steps to improve the local healthcare infrastructure. It has also set new rules to speed up approvals of medicines and medical devices easing the process of introducing new treatments to the market (PR Newswire)
  • Ping An Good Doctor, the largest online health care and medical platform in China by users to list on the Hong Kong stock exchange by H1 2018 aiming to raise about USD 1 billion. The company backed by Ping An Insurance could join the recent wave of mainland tech and internet companies that have debuted on the Hong Kong’s stock market. Of the 10 biggest initial public offerings in the city this year five have been by the technology and internet sectors compared with none last year (South China Morning Post)
  • Support for traditional medicine to get equal government support as western drugs. Traditional Chinese medicines may no longer be required to pass safety and efficacy trials in humans in China. Earlier China Food and Drug Administration (CFDA) announced draft regulations declaring that traditional medicines can eliminate costly and time-consuming trials if manufacturers prepare ingredients using essentially the same method as in classic Chinese formulations. The State Administration of Traditional Chinese Medicine and the CFDA will compose a list of the approved methods (Nature)

The U.K

  • The Government has allocated GBP 20 million to help public services "take advantage" of expertise in fields such as artificial intelligence (AI). The funding will be available from 2018 to 2021 and will be given to companies working on issues in areas like healthcare and education
    • Hospitals and schools can apply for funding and use it to pay AI companies and other firms for access to their staff and their resources
    • It will be used to fund private sector research and development on technologies that could help to solve public sector issues such as traffic jams, teacher availability and NHS patient experiences (Business Insider)
  • The UK government announced plans promising medical treatments and technologies to be fast-tracked through regulatory approval. The Accelerated Access Pathway (AAP) aims to speed up the time taken for around 5 new drugs or technologies each year to reach patients. Some could be available up to 4 years sooner than with the current system (Cancer Research UK)
  • The Chancellor’s Autumn Budget allots NHS trusts an extra GBP 350 million for entire winter contrary to the promised GBP 350 million a week. Philip Hammond, Member of Parliament pledged an extra GBP 2.8 billion in one-off funding for the health service to cope with immediate pressures up to 2020, the bulk GBP 1.6 billion will be delivered in 2018/19 and the rest the year after. The health service needs an extra GBP 4 billion in 2018/19 next year to prevent patient care from deteriorating (Independent)
  • Concordia, a Canadian drug company has overcharge the NHS by raising the price of liothyronine which is used to treat patients with an underactive thyroid by nearly 6,000% between 2007 and 2017 according to investigations by Competition and Markets Authority (CMA). Concordia could be fined up to 10% of its worldwide annual turnover. CMA is s a non-ministerial government department in the UK responsible for strengthening business competition and preventing and reducing anti-competitive activities (The Guardian)
  • The NHS is spending GBP 20 million to set up a security operations centre that will oversee and monitor its digital security that covers the whole health and care system of NHS. It will employ "ethical hackers" to look for weaknesses in health computer networks, not just react to breaches. Such hackers use the same tactics seen in cyber-attacks to help organizations spot weak points (BBC)
  • SBRI (Small Business Research Initiative) Healthcare, an NHS England funded program that supports innovative companies to solve healthcare problems noted the release of an independent review by David Connell (SBRI Expert Industry Representative) which examined how the UK government can maximize the impact of the SBRI as part of its Industrial Strategy. The SBRI Healthcare works with NHS to identify key challenges on specific areas recognized by NHS England and the 15 Academic Health Science Networks. The program aims to improve patient care, increase efficiency in the NHS and helping smaller companies grow.
    Key recommendations:

    • A New Central SBRI Fund which could grow to around GBP 250 million per annum over six years
    • The fund should be overseen by a small National SBRI Board
    • SBRI contracts financed through the central fund must be sufficient to take projects to a meaningful milestone (phase 1: GBP 50 to GBP 100,000, phase 2: GBP 250,000 to GBP 1 million)
    • Phase 3 selection of awards should be based on their operational scalability prospect
    • The National SBRI Board should ensure that the SBRI program funds are fully embedded within departments and operated in a systematic manner using best practice, innovation programme management processes
    • All SBRI programs receiving central funding should be required to provide details of awards, i.e. transparency, monitoring and evaluation is must (Cambridge Network)
  • Britain’s National Health Service continues to be one of the biggest users of fax machines in the world and spends GBP 79 million a year on second-class stamps rather than emailing people. This is an opportunity for a digital overhaul driven by mobile tech and connected devices (Telegraph)
  • SBRI (Small Business Research Initiative) Healthcare, an NHS England funded program that supports innovative companies to solve healthcare problems noted the release of an independent review by David Connell (SBRI Expert Industry Representative) which examined how the UK government can maximize the impact of the SBRI as part of its Industrial Strategy. The SBRI Healthcare works with NHS to identify key challenges on specific areas recognized by NHS England and the 15 Academic Health Science Networks. The program aims to improve patient care, increase efficiency in the NHS and helping smaller companies grow.
    Key recommendations:

    • According to The NHS Counter Fraud, fraud in England is costing the NHS more than GBP 1 billion a year
    • Patients who falsely claim exemption from the prescription charge have been estimated to cost the taxpayer more than GBP 200 million a year, with only GBP 23 million recouped in fines
    • Payroll fraud was estimated to cost GBP 90 million a year
    • Dentists were fraudulently claiming GBP 70 million for work that had not been done (The Times)

Japan

  • Rising health care cost and aging population has driven the government to reorganize the existing pricing system for drugs. Japan will start reducing its government-set prices in increments of originator drugs whose patents have expired. Key updates:
    • If generics have replaced more than 80% of the market for an originator drug, the price of that drug would drop to 250% of the generic at the 10-year mark, then to 200% after two more years, and to 150% four years later. The price would be on par with those of generics six years after the cut begins
    • If the substitution rate is less than 80%, the originator drug's price would fall to 150% of generics over a decade (Nikkei Asian Review)

Technology Briefs

  • According to IDC China, by 2021- 50% of the global gross domestic product will derive from the digital economy with the percentage in China to potentially hit 55%.
    • By 2020 more than 70% of China’s top 1,000 enterprises would explore and implement cross-industry expansion and co-operation with the help of information technology platforms and technology enablers, driving towards their business transformation, innovation and growth
    • By 2019, global capital expenditures for digital transformation will reach USD 1.7 trillion a 42% increase from 2017 and this will go up to USD 310 billion in China a 35% increase from 2017
    • Chinese enterprises would spend more than USD 30 billion in cloud services and cloud-enabling hardware, software and services
    • In China the adoption rate of blockchain services will be at 20% by 2021. By 2020 10% of its healthcare institutes could fully embrace blockchain networks in their operations (Telegraph)
  • China's healthcare sector turns to Artificial Intelligence to scale up operations in the mainland region with hopes that self-learning computer programmes expand customer base by intuitively responding to a rapidly growing market.
    • The use of Artificial Intelligence by Chinese companies is accelerated by the "Made in China 2025" slogan issued by China's State Council for industries to upgrade their units using advanced technology and adopt smart manufacturing practices
    • In 2015 Ping An Insurance Group, world’s second largest insurer by market cap launched a health care and mobile application 'Good Doctor' that provides free diagnosis of select health problems and a booking suite that helps users in procuring appointments with doctors. The company continues to invest in self-learning technology that can identify patterns in data to assist in medical diagnosis and treatment (Zee News)
  • According to Frost and Sullivan approximately one-third of the European hospitals interviewed allocate 11% to 20% of their overall annual budget to various healthcare IT solutions with 70% confirming an average increase of 15% to 20% growth in the budget during the past two to three years.
    • The United Kingdom, France, Germany, and Spain collectively spend over USD 6 billion on healthcare IT (HCIT) and the regional HCIT adoption stands at almost 80%
    • Healthcare data continuity, patient engagement and experience, healthcare cloud, population health management, Big Data and analytics and healthcare cybersecurity are areas that offer untapped growth opportunities
    • Players must shift focus from HCIT solutions that can capture data to solutions that can enable data sharing, clinical decision support and value propositions that target and understand specific customer needs
    • In spite of high electronic health record adoption levels only 15% to 20% of hospitals share data beyond their own organisation (PR Newswire)
  • According to Frost and Sullivan, 2018 will bridge the gap between artificial intelligence (AI) and humans with Man-machine collaboration leaving aside the man versus machine competition globally. Key observations are:
    • Non-traditional players such as Amazon, Apple, Google and IBM will have tangible implication in the healthcare ecosystem
    • Competing outside their conventional arena these organizations are pushing traditional healthcare companies to break their main business model and make healthcare more accessible, affordable and consumer-centric
    • 2018 will be a tipping point for mainstream adoption of popular digital health technology solutions such as AI, internet of medical things (IoMT), Big Data analytics and robotics across select healthcare use cases
    • Cloud based PaaS/SaaS platforms will be integral to any healthcare data monetization model. The transition of these technologies from ideation to actionable applications will drive growth opportunities globally (PR Newswire)
  • According to the Australian Institute of Health and Welfare AUD 14.2 billion was spent on the industry in 2011-12. The rate of growth in expenditure is currently higher than both population growth and expansion in the broader economy. Different data analytics approaches health care organisations are currently exploring include
    • Mind Australia deployed the QlikView BI platform last year to support18,000 people with mental health problems. The software optimizes reporting processes and enhances visibility across the organization
    • The federal government recently awarded the University of Queensland (UQ) a AUD 7 million grant for a 5-year big data research project that will enable scientists to examine huge genomic datasets collected across patients. The focus of the research will be psychiatric and neurological conditions (AtoBI)
  • In Africa telemedicine and artificial intelligence enables health tech platforms to emerge and allows doctors to treat patients in under-resourced areas remotely, efficiently and cheaply via mobile devices. Given increasing mobile penetration, low digitization costs and few policy barriers, African markets are poised to use AI to leapfrog traditional health care infrastructure and achieve economically viable universal health coverage.
    • The continent accounts for 25% of global disease cases but has only 2%-3% of the doctors in the world
    • Nigeria a country of 180 million people has only four MRI machines
    • Africa is getting more and more interconnected: smartphone penetration more than doubled between 2014 and 2016. By 2020 smartphone adoption on the continent is expected to pass 50%
    • In Uganda government health workers use MTRAC—an SMS-based technology connecting hospitals to the national drug chain to report on local medicine stocks using their mobile phone
    • LifeBank uses digital supply chain technology to deliver blood when and where it is needed in Lagos
    • Novartis partnered with Vodacom South Africa to connect community health workers to doctors through mobile technology
    • In Nigeria, General Electric has distributed cheap flip phone ultrasound scanners to diagnose more pregnant women (Newsweek)

Competitor Activities

  • London Health Sciences Centre, St. Joseph's Health Care London and other regional hospitals in southwestern Ontario will implement Agfa HealthCare Enterprise Imaging‘s single platform approach to create one of Canada's largest integrated digital imaging systems. The solution consolidates multiple picture archive and communication systems (PACS) providing secure access to patient medical images (PR Newswire)
  • Zebra Medical Vision, a leading deep learning imaging analytics company will have its current and future radiology algorithms enabled on the Google Cloud as part of its new AI1 offering to global health providers. Using millions of longitudinal high-quality imaging scans, Zebra-Med has been developing a deep learning engine that can automatically detect various medical findings in imaging scans. These findings are now integrated into the PACS system running on Google Cloud Platform, allowing radiologists to include them in their reading and reporting workflow (Business Wire)
  • Allscripts will deliver South Australia Health its anesthesia information management system (AIMS) at the Royal Adelaide Hospital. The solution will provide a complete and continuous patient record anywhere anesthesia care is provided in the new 800-bed, state-of-the-art flagship hospital in South Australia (Allscripts)
  • Allscripts partners with South Australia Health to deliver the Allscripts Sunrise product suite across the state of South Australia. In the long run, the partnership is will enable South Australia Health to continue to develop integrated models of care for its patient population (Allscripts)
  • Gippsland Health Alliance selects Allscripts to deliver an Electronic Medical Record (EMR) solution. The Gippsland Health Alliance is a consortium of publicly funded health services in the Gippsland region of Victoria, Australia. Allscripts Sunrise EMR clinical suite will replace paper-based medical records with a digital version. The implementation will include the hospital’s emergency department and surgical wards (Global Newswire)
  • GE Healthcare partners with a medical technology start-up UE LifeSciences. The aim is to commercialize UE Lifeciences’s handheld medical device for early detection of breast cancer. The device ‘iBreastExam’ (iBE) is a non-invasive and radiation-free mobile health device to identify breast abnormalities in women. The iBE will be GE’s global portfolio of breast health and affordable care products (The Hindu)
  • GE Healthcare collaborates with Golden Meditech Holdings Limited, a leading integrated healthcare enterprise in China. GE will provide an integrated and automated digital system and solutions to the Group's umbilical cord blood cryopreservation processes. These collaborations are aimed at providing efficient storage services to customers (PR Newswire)
  • Fujifilm invests a total of JPY 3.2 billion on its Contract Development & Manufacturing Organization (CDMO) sites in the U.S.A. and the U.K. to accelerate the expansion of its business for developing and manufacturing biopharmaceuticals under contract for other parties (Fujifilm)