Market Outlook
The healthcare ecosystem insights report covers a detailed analysis of the healthcare industry in the U.S., the U.K., China, Germany, France, Singapore, and Japan. The healthcare sector in the U.S. is projected to reach $5,605.5 billion in value by 2024, witnessing a CAGR of 6.6% during 2019–2024.
The growth of the industry in the seven nations can be attributed to the rising number of cases of chronic diseases, increasing adoption of healthcare insurance, spurring demand for in-vitro diagnostic (IVD) tests, booming geriatric population, soaring gross domestic product (GDP) and healthcare spending, government initiatives, enhancing healthcare infrastructure, and rapid digitization in the medical ecosystem.
The cardiovascular and circulatory diseases category, under the disease type segment, is expected to generate the highest (over 42.6%) revenue in Germany in 2024, witnessing a CAGR of 3.3% in the coming years. This is because cardiovascular disorders (CVDs) are the most-prevalent chronic illnesses in the country. Cancer is projected to be the second-largest category in the German market, with a 26.5% share, in 2024.
The state/local category, within the channel segment, held the third position in the Japanese market, accounting for an over 17.4% market share, in 2018. This was because fewer healthcare services are offered at the state/local level in the country.
Industry Dynamics
The healthcare industry growth in the seven countries is driven by the surge in the aging population, high demand for IVD tests, digitalization in the industry, and widescale adoption of healthcare insurance.
Aging has a direct connection with chronic diseases, such as CVDs, neurological conditions, and rheumatoid arthritis. The increasing life expectancy and declining mortality rates are the key contributors to the rising geriatric population across the world. According to the World Bank, the population of people aged 65 years and above grew from 30.4 million in 2012 to 34.2 million in 2017 in Japan and from 11.5 million in 2012 to 13.2 million in 2017 in France.
Furthermore, a 2019 study by the National Center for Chronic Disease Prevention and Health Promotion (NCCDPHP) on Japanese citizens aged 75 years and above revealed that over 65% of such people were living with at least three co-occurring diseases, such as peptic ulcers, coronary heart disease, and hypertension. Since older people are highly susceptible to such ailments, the burgeoning elderly population in these countries will fuel the demand for medication and other medical facilities in the coming years.
Moreover, the mounting demand for IVD tests will facilitate the healthcare industry growth in the coming years. The increasing usage of IVD tests can be owed to their rapid and reliable results, easy repeatability, to confirm the results, smooth data recording ability, multiple test performing capability, and ability to detect a wide range of substances in the body. For instance, China is creating a high demand for these tests due to the rising incidence of chronic illnesses among the aging population, many of which can be diagnosed and monitored through IVD products.
Additionally, the increasing adoption of health insurance policies is having a positive impact on the market growth, as health insurance reduces the financial burden on patients. Over the past few years, privately and publicly funded medical insurance plans have made healthcare affordable for patients. Moreover, numerous initiatives have been implemented by government organizations to boost the adoption of health insurance. For instance, in November 2015, the Government of Singapore implemented a national catastrophe insurance program, MediShield Life, which covers all the basic public hospital treatments for its citizens and permanent residents.
Apart from this, digital transformation also plays a vital role in the healthcare sector growth, as it has led to a reduction in the healthcare expenditure in several countries. Key players in the healthcare industry are actively engaging in the development of digital platforms that assist in providing better medical services. Cloud computing has transformed the industry by helping hospitals and office-based physicians in storing patient records on the cloud and offering people access to their medical records and test results 24/7.
Moreover, this technology is improving telemedicine, as it involves the usage of the telecommunication technology to remotely diagnose and treat patients and wearables that send automatic prompts to individuals about their pulse, weight, oxygen level, blood sugar, and other vital stats.
Restraints
The stringent regulations across the seven countries have become a major hindrance for the market growth. The strict regulations and lengthy approval process deprive patients of advanced treatments, as they make it difficult for drug and medical device manufacturers to launch new products. Several organizations are involved in the approval process for medical products.
For instance, the Pharmaceuticals and Medical Devices Agency (PMDA) ensures the safety levels in the development stage of every drug and medical device produced in Japan. Similarly, the Food and Drug Administration (FDA) in the U.S. and the Medicines and Healthcare products Regulatory Agency (MHRA) in the U.K. are responsible for ensuring safety and providing approvals to drugs and medical devices in the respective countries.
The approval of medical devices takes 3 to 7 years, whereas it takes nearly 12 years to introduce a drug in the healthcare industry from its developmental phase. This puts a strong financial burden on the manufacturers and also deprives patients of potentially better medications and treatments. Thus, the stringent legislations that delay the launch of new drugs and devices act as a restraint for the industry.
