Financial intelligence for Asia's healthcare markets
 
 
Remember me:

Analysis: Opportunities in the Philippines

In the third part of his series about operating healthcare companies across the APAC region, Marcus Pitt, managing partner of Fortuna Corpus Asia, focuses on the opportunities in the Philippines.

The hospital segment remains highly fragmented in the Philippines. One of the larger operators/ owners, Metro Pacific Investments (MPI) has been taking advantage of the current state of the market and has acquired more than 15 hospitals with a capacity of upwards of 3,000 beds. It has been reported since January last year that the company is considering an up to US$300 million IPO in the next couple of years, certainly CLSA and UBS have been mandated.

The Medical City is the main competitor of MPI, present both in inpatient and outpatient care segments through hospitals and clinics. One of the only operators to explore opportunities outside of the market, it has recently embarked on a partnership-investment in the Middle East with Kuwait based Sama Medical Services.

Other groups now entering the sector include Villar Property, which this year announced it will create a chain of clinics as a service offering with each of its residential offerings. Foreign firms have also been eyeing opportunities, for example, Spanish multinational Sanitas International, which has health centres and insurance operations, has earmarked several projects in the Philippines.

In the pharmaceutical sector – similar to markets such as Indonesia and Thailand – the Philippines enjoys high growth of around 12-14% a year, largely driven by growing middle class, increased spend in health and government policy.

It is generics that dominate the market, indeed they represent almost two-thirds of all drug products sold in the country. In recent years, the government introduced an essential drug list which lowed the price of generics and core OTC products dramatically. In addition, the government has also backed local production and attracted imports from markets such as India and Pakistan where production costs are comparatively lower.

The top ranking MNC manufacturers include Sanofi, Pfizer, Astra Z, GSK, MSD – for domestic companies, United Laboratories continues to lead the domestic market and has a significant regional presence. It is closely followed by Pascual Laboratories, GC International and Natrafarm.

In terms of supply chain, retailers have the largest share with an estimated 80%, hospitals at 10% and the remaining is made up of clinics, NGOs and government agencies. For some time now, Mercury Drugs has held a significant market share of the retail pharma space. Some say it controls more than 45% with steady competition coming from the Robinson Group, which acquired The Generics Pharmacy (TPG) in 2016. Together with Generika (which opened a further 150 stores last year) both make up a third of the market with the remaining coming from chains such as Watsons and other independent drug stores.

In addition to traditional retail models, Ayala Group (parent of Generika) – has recently invested in several online businesses. Earlier this year it took an undisclosed minority stake in Wellbridge Health, a start-up that owns online pharmacy MedGrocer. This follows the launch of FamilyDoc, a chain of clinics offering primary care services. Through this operation, a patient can see a FamilyDoc HCM, get laboratory tests and receive generic drugs all in the same clinic.

Retail groups are also cashing in on the growth of generics – creating house brands that compete on price and have the added vantage of offering their substitutes at point of sale. They compete on price with un-branded generics and although are currently a small segment, they are expected to growth significantly because of the priority pharmacy chains are giving on this segment – it is expected that growth and market share will outperform both un-branded and branded generics in the next few years.

Marcus Pitt is a board member, advisor and consultant for the healthcare and life-sciences industries across southeast Asia. He can be reached via email: marcus.pitt@fortunacorpusasia.com.

Posted on: 27/11/2017 UTC+08:00


News

Cancer-detection company Grail has raised US$300 million Series C funding led by healthcare focused investment firm Ally Bridge Group, Hillhouse Capital and 6 Dimensions Capital.
ASX-listed, but New Zealand-based medical device manufacturer Adherium has appointed David Allinson as chief financial officer. This follows the sudden resignation of Timothy Marcotte at the end of January after only four months in the post.
Following Abano’s transition to focus solely on the NZ$11 billion (US$7.6 billion) trans-Tasman dental market, the NZX-listed specialist medical investment firm has appointed Tracey Batten to the board.
Rhythm Biosciences, which is developing a screening test intended for the accurate and early detection of colorectal cancer, has appointed Glenn Gilbert as chief operating officer. For the past eight years Gilbert has held various roles at the ASX listed pharmaceutical and device maker Medical Developments International, most recently as head of sales and marketing.
Peking University Founder Group continues to develop its bond curve with the sale of US$310 million new three-year floating rate notes at three-month Libor plus 400bp as well as a US$65 million tap of its 6.25% 2020 2.5-year fixed-rate bonds. They originally priced in mid April.
Matthew Ratty has stepped down from the board of Australian healthcare group Admedus after being appointed chief executive of performance-based online and mobile marketing solutions provider Tech Mpire.
Aoxin Q&M Dental Group (AQMD), a spin off of Singapore’s Q&M Dental Group, plans to acquire a dental hospital called Youxin Dental Clinic, better known as XY Dental, in Jinzhou City, Liaoning, for Rmb19.6 million (US$3.1 million).
Healthscope, Australia’s second largest private healthcare operator, has rejected two takeover bids saying that it will not provide due diligence access to either the BGH Capital/AustralianSuper consortium or Brookfield Asset Management. Instead, Healthscope said that it will undertake a strategic review of its hospital property portfolio.



Analysis

Sara Jost, global healthcare industry lead at BlackBerry, explains that putting the systems and procedures in place to deliver a healthy and secure digital healthcare system will protect patient health information and support medical innovation.
Joseph Soon, global digital director at Bupa, explains why industry players must stay agile in the market and act fast to take every opportunity the digital age has to offer.
The Asia-Pacific (APAC) healthcare industry is undergoing rapid transformation with a dramatic shift in consumer behaviour and expectations, opening up growth opportunities across diagnostics, regenerative medicine, medical tourism and digital health.
Tan Chorh Chuan, executive director at the Office for Healthcare Transformation and chief health scientist at the Ministry of Health in Singapore, explains why population health improvement has to become a crucial area of focus.
What an earth happened to Ping An Good Doctor? It was expected to be one of the brightest IPOs of the year and at HK$8.8 billion (US$1.1 billion) certainly one of the biggest out of Asia Pacific.
From aspirin to bone broths, the consumer healthcare market in Asia combines East and West and the growing population has more money to spend on healthy lifestyles. Sumit Sharma, head of health & life sciences, Asia Pacific, at Oliver Wyman, looks at how to identify new sources of value.
Fabian Boegershausen, manager at corporate strategy consulting firm Solidiance, takes a look at rising healthcare costs in ASEAN and provides measurable solutions to overcome future challenges.
Bain & Company’s seventh Global Healthcare Private Equity and Corporate M&A Report shows that Asia Pacific deals last year surged to their highest levels since 2001.
my images

Podcasts

HealthInvestor Asia twitter feed