Myanmar’s healthcare industry has significant growth potential, but succeeding in the market requires an approach that navigates the country’s underdeveloped healthcare infrastructure, talent gap and affordability challenges.
Zuellig Pharma Vice President Indochina/Taiwan/Thailand Yves Hermes said Zuellig Pharma is bringing this expertise to the market, after its entry in 2015.
“We have entered a number of markets in Asia while they were at a similar stage of development, meaning we have the knowledge and experience to help healthcare companies succeed in these types of environments.”
Growth opportunity
The country’s strong economic growth presents a big opportunity for the healthcare ecosystem. “Myanmar’s 8.4% GDP growth is the fastest in Asia and the newly elected democratic government has started to put measures in place to promote investment and development,” said Mr Hermes.
Government reforms to manage and further encourage economic development place emphasis on a higher standard of living and development for all people living in Myanmar. “This is good news for the country’s healthcare system,” said Mr Hermes. “The Government has identified ‘health as a hub for sustainable development’, and has made healthcare a top three priority.”
Over the last five years, healthcare spending in Myanmar has increased from 0.2% of GDP in 2011 to 1% as per the latest available figures. “While there has been growth, this is still well below other ASEAN markets where healthcare spending is between 3 – 4% of GDP. It is clear there is a big opportunity for further investment.”
Navigating a challenging environment
“Myanmar’s healthcare infrastructure is very underdeveloped, particularly in rural areas. Hospitals, clinics and other providers have varying levels of capability and some have significant gaps in terms of the facilities they are able to provide. Not all buildings will have constant water and electricity, for example, while many hospitals and clinics have basic or no cold chain facilities.”
Companies also need to manage a significant talent gap at the corporate level, and within the community of healthcare providers.
“Local employees need to learn how to manage the systems, standards and structures that multinational companies require, particularly in the areas of compliance and pharmacovigilance. This involves big investment in training and development and a talent retention strategy to ensure qualified employees do not accept lucrative offers from new market entrants.”
Affordability is the third challenge Mr Hermes highlights.
“Today, out of pocket spending makes up 80% of funding for healthcare services. This means many of the country’s poorer citizens, particularly those living in remote rural areas, cannot afford even the most basic care. Even with a growing consuming class – which is expected to increase from 2.5 million in 2010 to 19 million in 2030 – a significant portion of the population will struggle to afford drugs and other treatments.”
Making healthcare more accessible
Zuellig Pharma has experience working with healthcare companies, governments and providers to navigate these challenges.
“Our ultimate goal is to make healthcare more accessible and we believe there is a huge opportunity to do this in Myanmar. We have worked within ecosystems in other markets to develop healthcare infrastructure and introduce solutions that navigate affordability and access challenges. We will be able to use this experience and expertise to support the development of Myanmar’s healthcare system.”
Zuellig Pharma has recently entered into a strategic partnership with Pacific AA Group – the largest healthcare distributor in Myanmar.
“This partnership truly differentiates us. We are able to combine Pacific AA Group’s reach, local knowledge and relationships with our strong regional distribution, quality, compliance and commercial expertise to deliver better services to our clients and customers across the country.”
Pacific AA Group covers 19,000 customers from 15 depots across Myanmar.
“This gives us the reach we need in Myanmar and allows Zuellig Pharma to focus on developing our commercial capabilities in the country.”
Mr Hermes said that Zuellig Pharma is building a strong on-the-ground presence.
“This is led by our General Manager Frederik Meerhoff. Frederik is establishing a young, dynamic team, many who have been working in the pharma industry in Myanmar for a number of years. They are focused on delivering the best possible commercial solutions for our clients in the country and will be looking at how they can introduce innovative solutions that tackle key challenges of affordability and access.”