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The Medical Devices Sector in Israel and Singapore

Despite spending only 4% of its GDP on healthcare, Singapore is known for healthcare excellence, having ranked 4th in the world for its healthcare infrastructure, according to IMD’s World Competitiveness Yearbook. Given its small population size, healthcare expenditure in Singapore was approximately $11.7 billion in 2012, but expected to reach $22.3 billion by 2018. Per capita spending on healthcare is second only to Japan among Asian countries, reaching $1,800 in 2011, due to the mandatory national healthcare plan for Singaporeans.

The medical device market in Singapore is expected to expand due to the country’s growing reputation as a regional and international healthcare hub.  Demand for innovative medical technologies is high as Singapore strives to provide high quality healthcare delivery systems and facilities to its residents and the international patient market. Statistics by the Economic Development Board (EDB) Singapore revealed a growth of 11.8% of the medical technology cluster in 2012, valued at $4.3 billion. Foreign companies constitute 85% of the country’s medical device providers, with the U.S., Japan and Germany as top three medical equipment suppliers to Singapore.

Medical devices are required to be classified and registered according to a risk-based system with the regulatory body, Health Sciences Authority of Singapore (HSA). Generally, devices already registered with key international regulatory agencies can be registered in Singapore under an equivalent classification. All medical devices in Singapore must be registered, with only one exception: Class A non-sterile devices. Class A sterile devices take 30 working days to register. The process for Class B, Class C and Class D medical devices may take up to 60 to 220 working days and cost between US$1,131 to US$5,010.

HSA is likely to enact changes that tighten up the regulatory process in the future, particularly more regulatory controls for medical devices used in clinical trials. The new Health Products (Clinical Trials) Regulations legislation set to start in 2013 would apply to higher-risk devices, but exclude Class A and B medical devices and non-invasive, non-confirmatory, in-vitro diagnostic products. Foreign medical device companies should regularly check for updates to Singapore’s medical device registration, import and distribution requirements.

Conversely, in Indonesia, there is huge untapped potential due to a rapidly growing population approaching 250 million, a swelling middle class and an economy expected to join the trillion dollar club. Despite this, Indonesia’s healthcare standards are currently low. Indonesians’ healthcare expenditures are only $60 per capita, at an estimated total of US$24.9 billion in 2013.

The medical device industry grew 2.1%, valued at US$493.3 million in 2011, of which the bulk of the Indonesian medical device market is supplied by imports. A major challenge is the low quality of hospital services that limits the demand for high-valued medical devices. The lack of sophisticated medical treatments in Indonesia has led many affluent Indonesians to seek better healthcare services abroad, especially Singapore.

Indonesia’s medical device market is regulated by the National Agency of Drug and Food Control (NA-DFC). However, the Deputy of Therapeutic Products, Narcotics, Psychotropic and Addictive Substance Control is responsible for the pre-market evaluation on efficacy, safety and quality of medical devices, as well as drugs and other biological products. In December 2012, the Ministry of Health launched e-Regalkes or the Medical Device Registration and Household Health Supplies platform to improve the process of licensing medical devices in Indonesia. Foreign companies cannot register a drug or device in Indonesia without either a local Indonesian office or a local distributor.

However, there is reason to be optimistic. In late 2012, the Indonesian government announced plans for universal healthcare coverage in an effort to grow its healthcare industry. The new system, the Social Security Providers Law (called BPJS), will provide emergency, primary, and preventive care to an expected 100 million Indonesians. Such move will require Indonesia to improve its hospital network, and lead to demand for millions of dollars to be spent on pharmaceuticals, medical devices, and other hospital equipment.

With more than 700 companies and the highest number of patents in medical devices per capita, Israel has become a leading provider of innovative and advanced technological solutions in the healthcare arena. Clusters range from diagnostics, imaging, cardiovascular, oncology, orthopedics and many more. For medical technology companies seeking entry to regional markets, Singapore plays a key role in being Asia’s gateway. As a microcosm of Asia, Singapore provides an ideal base for Israeli companies to develop new technologies and product innovations, test-bed new solutions and systems for the regional and global market, as well as to nurture the growth of R&D and commercialisation activities.

Source: Pacific Bridge Medical, Singapore Economic Development Board (EDB)