Thailand: The World’s New Medical Destination, for Services and Investmentadmin
The economy of Thailand boasts a thriving, robust medical industry that both leads Southeast Asia and is renowned across the world. From the world’s leading medical tourism sector to growing sectors in pharmaceuticals, medical devices and implants, and academic research, the Thai medical sector presents a wealth of opportunities, for Thai and foreign patients, as well as entrepreneurs and investors looking for global growth opportunities in the medical field.
Relative to its Asian neighbours and compared to global leaders, Thailand already has a large healthcare sector that is a leading priority of the Thai government. Thailand ranks as first in the ASEAN group in public healthcare expenditures, with 14% of the Thai budget allocated to healthcare; this figure also rates comparably to South Korea and China and ahead of India. Although large western countries outpace all countries in the region (the U.S. at approximately 17%, the U.K. at 9%), Thailand is in the fore of Asian countries in dedication to healthcare.
From this leading position, Thailand is already poised to accelerate and become a true world hub in the medical industry. The government of Thailand and the Thai Board of Investment have recently opened an initiative to position Thailand in the forefront of the medical industry. This ten-year programme, entitled “Thailand, a Hub of Wellness and Medical Services,” began in 2016 and is scheduled though 2025 and is centred on four major areas of wellness, medical services, academics, and medical products. Thailand’s economy already claims several leading sectors, but this governmental commitment to expanding the Thai healthcare economy offers several areas of predicted economic growth in the coming years and decades.
Thailand has long been a destination for international patients, due to its high-quality medical facilities, well trained doctors and other medical professionals, and competitive prices; these factors taken together have made Thailand the leading destination for foreign patients and medical tourism. Foreign patients numbered 2.35 million in 2013, and the number of foreign patients has grown nearly 11% (CAGR) over the five years ending 2014. Thailand features over 1,000 public hospitals, 300 private hospitals, and 50,000 trained physicians catering to medical procedures in a variety of fields.
The Thai pharmaceutical sector is another strong contributor to Thailand’s economy and is growing at an unprecedented rate. Currently leading the ASEAN region, Thailand is expected to rank as the eighth-largest national pharmaceutical market in the Asia-Pacific region this year. Thai universities, medical schools, government, and pharmaceutical firms are busily engaged at all levels of the pharmaceutical industry, from research and development through initial testing, clinical trials, to production and marketing. The market has continued to grow in recent years and achieved 6.12% in annualised growth over the past five years.
Thailand is an active participant in the international pharmaceutical trade, both as an importer and exporter, creating a wealth of opportunities for international firms in the sector. The largest share of imports understandably come from U.S., Chinese, German, and Swiss firms. Thailand’s pharmaceutical exports are concentrated most in the region, with ASEAN markets the majority and Myanmar, Vietnam, and Cambodia the biggest markets in the region.
One exciting area within the field is that of bio-pharmaceuticals, or pharmaceutical products derived from biological processes (typically protein synthesis). Bio-pharmaceuticals have continued to grow and are expected to amount to nearly one-fifth of the total pharmaceutical market. Thailand’s National Science and Technology Development Agency (NSTDA) has found success with a discovery that permits larger-scale production of protein-based drugs, putting Thailand on the cutting edge of a rapidly expanding sector in the industry.
Vaccines provide another area of Thai innovation leading to new markets in goods and services. Thai researchers and government agencies are actively engaged in testing and developing new vaccines and delivering vaccines to Thai patients and selling them in the export market.
One important innovation emerging from Thailand’s medical sector is a 5-in-1 vaccine “cocktail” designed to treat five major infectious diseases: diptheria, tetanus, pertussis, hepatitis B, and meningitis; the cocktail has been successfully developed and is expected to hit the market this year.
Other important developments in vaccines are the government’s National Flu Pandemic Preparedness Plan, with H1N1 and H5N2 and other flu vaccines approved or currently being tested, and NSTDA research into a dengue vaccine. These vaccine programs are expected to be effective in limiting the contagiousness and lessening the symptoms of flu in Thailand, including among indigenous populations and in the border regions of the country.
Medical Devices and Implants
Medical devices and implants are an important sector within the industry, and another area where Thailand’s research and development sector has yielded important advantages for the nation’s healthcare industry. Chulalongkorn University, the oldest university in Thailand, has recently completed development of a design for a unipolar modular hip prosthesis that better fits the anatomical fit of many Asian patients; this promises to be a potentially exciting growth opportunity and important medical development.
The biotechnology and medical sectors are priorities for the Thai Board of Investment and receive significant incentives to encourage foreign investment and business partnerships. Biotechnology R&D and certain medical devices can be exempted from corporate income tax for up to eight years, and other medical devices can be exempted for three or five years. Additionally, firms in the biotechnology or medical fields are eligible for exempted duties on imported raw materials and components.
In addition to the BOI, the government of Thailand has several active programs to encourage research and development of new pharmaceuticals, devices, and other medical products and services. The NSTDA provides channels of communication between Thai research institutions and the private sector. The Thai government also has created the Thailand Science Park and Thailand Centre of Excellence for Life Sciences to promote research and development. The Thai National Innovation Agency supports up to 90% of R&D expenses by supported Thai companies and provides interest-free loans to certain start-ups.
Thailand’s research institutions and corporate firms are at the leading edge of the global biotechnology and pharmaceutical industries. Both for international patients and medical customers, as well as global firms looking for investment and partnership opportunities in Asia, Thailand presents an exciting array of thriving industries, investment opportunities, and world-class medical facilities.