outlook of iran and azerbaijan healthcare markets
TRANSCRIPT
Outlook of Iran and Azerbaijan Healthcare Markets
Azerbaijan and Iran’s Healthcare Markets Poised for Growth
Uldouz Berenjforoush and Hilal CuraHealthcare
August 1, 2013
© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
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Today’s Presenter
7+ years of market intelligence and consulting experience in cross industries such as healthcare, chemical materials and food. Particular expertise in conducting growth consulting studies, developing competitive intelligence environment and analyzing business development opportunities in medical devices, medical technologies and healthcare delivery services segments.
Hilal Cura, Research AnalystFrost & Sullivan
Turkey
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Today’s Presenter
Uldouz obtained her B.A. from UC Berkeley double-majoring in Political Economy and Public Health, and her M.S. degree in Finance at Sabanci University. 3+ years of experience in research, conduced market insights highlighting the opportunities in the healthcare market. Currently she is working as a Research Analyst at Frost & Sullivan and is interested in finance, and healthcare sectors.
Uldouz Berenjforoush, Research AnalystFrost & Sullivan
Turkey
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Focus Points
An Outlook on Iran and Azerbaijan Healthcare Markets
• Top Growth Opportunities Across the Healthcare Segments• Healthcare Services, Medical Technologies and Life-sciences• Economic and Demographical Outlook • Healthcare Indicators and Disease Burden• Healthcare Spending and Healthcare Infrastructure• Medical Tourism
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Azerbaijan and Iran: Next Two Global Healthcare Hot Spots
• Iran with an aging population of 75 million, represents one of the biggest healthcare markets of the Middle East.
• Azerbaijan with an aging population of 9 million, a transitional-state, opening up rapidly and eager for growth.
• Natural resources-rich wealthy nations, with a growing GDP represent a new, fresh market especially in the healthcare sector.
• Focus on growth and development through healthcare reforms and privatization.
• Attractive healthcare consumption markets with unsaturated demand.
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Azerbaijan Healthcare Market Outlook
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Azerbaijan Offers New Healthcare Opportunities
Source: Frost & Sullivan analysis.
2 Healthcare reforms pave the way for development in the private healthcare market.
3Over 9 million, averaging 30 years of age and a modern life-style, Azerbaijan has seen an increasing number of circulatory diseases as well as hypertension cases
1 Oil-rich, growing Azerbaijan provides opportunities across the healthcare sector.
8
Healthcare Spending and Demographic Outlook
Sources: EIU; IMF; World Bank, Frost & Sullivan analysis.
Azerbaijan’s healthcare expenditure is expected to grow to 760 million USD in
2013, 24% more than 2010.
7.2% of Azerbaijan’s population is expected to be above the age of 65 by 2020.
2000 2010 2020
0–14 31.7 22.6 22.9
15–34 34.3 37.2 30.9
35–64 28.8 34.3 39
Above 65 5.2 5.9 7.2
10
30
50
70
90
110
Population by Age Group, Azerbaijan, 2000, 2010 and 2020
Po
pu
latio
n %
Source: US Census, Frost & Sullivan analysis.
Azerbaijan’s is expected to grow at a CAGR of 5% in the next 5 years.
2000 2011 2020 2000 2011 2020
Private
81.4 78.5 71.3
Public
8.6 21.5 28.7
% of GDP
4.7 5.2 6.7
5152535455565758595
12345678910
Total Healthcare Expenditure and as Per-centage of GDP, Azerbaijan, 2000-2020
Heal
thca
re E
xpen
ditu
re %
% o
f GD
P
9
Sources: Azerbaijan Statistics Department; Frost & Sullivan analysis.
2006 2010 2015 2006 2010 2015
Circulatory Diseases
350 364.4 428.40760882394
Respiratory Diseases
33.7 26.6 13.080876455372
8
Cancer
76.7 74.3 67.541260768641
5
25.00
125.00
225.00
325.00
425.00
5.00
25.00
45.00
65.00
85.00
Leading Causes of Deaths
Nu
mb
er o
f P
eo
ple
, p
er 1
00
,00
0
Socio-economic development and modern lifestyle has increased circulatory diseases. The prevalence of hypertension and diabetes is expected follow a rapid growth trend in the next years.
Health Indicators and Disease Burden
2000 2005 2011 2000 2005 2011
Male Life Expectancy
63.79 66.17 67.81
Female Life Expectancy
69.88 71.81 73.64
Infant Mortality Rate
56.7 47.9 38.5
59
63
67
71
75
51525354555
Azerbaijan Health Indicators , 2000, 2005 and 2011
Life
E
xp
ecta
ncy
In
fa
nt M
orta
lity R
ate
Sources: Azerbaijan Statistics Department; Frost & Sullivan analysis.
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Government Healthcare Budget
2007 2013
Total 226 852
50
150
250
350
450
550
650
750
850
Government Healthcare Budget, 2007 and 2013
He
alth
care
Bu
dg
et,
in m
illio
ns
US
D
The budget has increased ten folds in the past 10 years due to increased income
from oil.
2003 2011
Government ex-penditure
12.6 21.5
Private expendi-ture
87.4 78.5
10.0
30.0
50.0
70.0
90.0
Expenditure on health as a per-centage of total expenditure
Perc
enta
ge)
As a result of the reforms Universal Health Insurance coverage is expected to increase
to cover entire population.
Sources: World Bank; Frost & Sullivan analysis.Sources: World Bank; Frost & Sullivan analysis.
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Market Overview—Healthcare Infrastructure
2006 2011
Physicans 3.6 3.4
Beds 8.1 4.6
1
3
5
7
9
11
13
Number of beds and physicians, Azerbai-jan, 2006–2011
Nu
mb
er
(pe
r 1
00
0)
Source: Azerbaijan Ministry of Statistics, Frost & Sullivan analysis.
Between 2006 and 2012, the number of public hospital beds dropped due to the privatization and remodeling reforms to have up-to-date, modern technology available in all hospitals.
2006 20120
50
100
150
200
250
146 118
1976
Number of Hospitals Azerbaijan, 2006–2012
Out-patient clin-icsPublic Hospitals
2000 2009 20110
200
400
600
800
1000
1200
0
500
1000
1500
2000
2500
Number of scientists, Azerbaijan, 2000 - 2011
SpecialistsPractitionersTotal
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Private Healthcare Services Segment Breakdown
Top Growth Opportunities
Private Hospitals with the latest available equipment in the market.
Specialization and premium services, eg. ophthalmology, cardiology and oncology
Facilities Management that offers well-trained healthcare personnel.
At a Glance..
• Only 2% of hospitals are privately owned which represents unmet needs.
• Shortage of well-trained healthcare personnel, and expertise across services such as ophthalmology and cosmetic surgery.
• More financing freedom to the hospitals and the healthcare providers.
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Pharmaceuticals Segment Breakdown
Top Growth Opportunities
Lower cost with high quality
Anti-diabetics, and oncology segments will have the highest growth
High-volume Imports of European pharmaceuticals
At a Glance..
• More than 70% of OOP spent on pharmaceuticals.
• Over 60% of pharmaceuticals are imported from Turkey, Russian and European countries.
• Only one functioning production plant in Azerbaijan, Azerphann.
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Medical Devices Segment Breakdown
Top Growth Opportunities
Lower cost equipment and disposables
Private hospitals
Unmet local demand for ophthalmology, and oncology and cardiology devices.
At a Glance..
• Critical market demand for medical equipment, no domestic production
• Turkish firms provide lower-cost equipment.
• The Japanese Aloka and Shimadzu brands also popular.
• German Siemens dominating the hospitals.
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Iran Healthcare Market Outlook
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Iran Offers New Healthcare Opportunities
Source: Frost & Sullivan analysis.
2Iran’s healthcare out-of-pocket (OOP) expenditure is at 55%, which is very high compared to other neighboring countries.
3 Iran’s medical devices industry is greatly depended on the imports, which accounts for over 88% of the market.
1 Over 75 million, more than 50% are under the age of 35. A natural-resource rich nation.
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Healthcare Spending and Demographic Outlook
2000 2011 2020 2000 2011 2020
Private
58.36 60.27 48.9235151314198
Public
41.64 39.73 51.0764848685802
% of GDP
4.6 6 7.7135391193426
5152535455565758595
12345678910
Total Healthcare Expenditure and as Per-centage of GDP, Iran, 2000-2020
Hea
lthca
re E
xpen
ditu
re %
% o
f GD
P
Sources: EIU; IMF; World Bank, Frost & Sullivan analysis.
Driven by healthcare reform and increasing disease prevalence Iran’s healthcare
expenditure is expected to grow.
With young but aging population of 75 million, Iran presents a significant potential
in the healthcare market.
2011 2013 2020
0–14 23.37 23.8 17.268
15–24 19.99 19.8 10.71
25–54 44.81 45.3 49.848
55-65 6.05 6.1 6.788
5
25
45
65
85
Population by Age Group, Iran, 2011, 2013 and 2020
Po
pu
latio
n (
,00
0,0
00
)
Source: World Bank, Frost & Sullivan analysis.
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Sources: Iran Department of Health; Frost & Sullivan analysis.
The key health indicators of Iran improved within the healthcare reform period implemented after the war however, due to socio-economic development and an urban lifestyle the causes of deaths by
cardiovascular diseases and cancers are on the rise.
Health Indicators and Disease Burden
2000 2005 2011 2000 2005 2011
Male Life Expectancy
68.69 69.8 71.16
Female Life Expectancy
70.85 72.95 74.94
Infant Mortality Rate
44 33.7 25
656769717375
2.5
12.5
22.5
32.5
42.5
Iran Health Indicators , 2000, 2005 and 2011
Life
E
xp
ecta
ncy
In
fa
nt M
orta
lity R
ate
Sources: EIU; IMF; World Bank, Frost & Sullivan analysis.
38%
18%
14%
6%
6%
18%
Leading Causes of Deaths
Cardiovascular
Accidents
Cancer
Neonatal
Respiratory
Others
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Government Healthcare Budget
An upward trend in healthcare spending per person due to increasing universal
health insurance coverage.
2003 2007 2011
Government ex-penditure
40.6 41.4 39.7
Private expendi-ture
59.4 58.6 60.3
10.0
30.0
50.0
70.0
Expenditure on health as a percentage of total expenditure
Perc
enta
ge)
Government is dedicated to grow the healthcare expenditure by 4% each year.
2006 2009 2013 2006 2009 2013
US$ per head
131.6 220 421
% of GDP
4.15 4.2 4.3
2575
125175225275325375425475
4.07
4.12
4.18
4.23
4.27
4.32
Total Healthcare Spending and as Per-centage of GDP, Iran, 2006–2013
He
alt
hca
re E
xpe
nd
itu
re (
$ B
illi
on
)
Sources: EIU; IMF; World Bank, Frost & Sullivan analysis. Sources: EIU; IMF; World Bank, Frost & Sullivan analysis.
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Market Overview—Healthcare Infrastructure
2006 2012 2006 2012
Beds
1.38 1.7
0.1
0.3
0.5
0.7
0.9
1.1
1.3
1.5
1.7
0.1
0.3
0.5
0.7
0.9
1.1
1.3
1.5
1.7
Number of Hospitals Beds per 1000, Iran, 2006–2012
Num
ber (
per 1
000)
Source: World Bank, Frost & Sullivan analysis.
Between 2006 and 2012, the number of hospital beds have increased and we see an upward stable growth trend in the number of physicians per 1000 patients.
2006 20120.00
0.50
1.00
1.50
2.00
2.50
0.89 0.91
1.4 1.4
Number of Physicians and Nurses/Midwives per 1000, Iran,
2006–20102
Physicians Nurses and MidwivesSource: World Bank, Frost & Sullivan analysis.
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Pharmaceuticals Segment Breakdown
Market Revenue
$3.51 B
(2012)
Revenue at End of Forecast Period
$3.96 BCAGR: 8%
(2015)
Top Growth Opportunities
High-volume Imports of pharmaceuticals with higher quality
Oncology, multiple sclerosis, and blood disorders
Specialized high-tech medicine and biotechnology
At a Glance..
• Iran mainly produces generic medicine and lacks the more high-tech production capabilities.
• Shortage of specialized medicine has opened up the doors for high volumes of specialized medicine, more preferably European and American brands.
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Medical Devices Segment Breakdown
Market Revenue
$964 M
(2012)
Revenue at End of Forecast Period
$1.03 BCAGR: 7%
(2015)
Top Growth Opportunities
Transplants, and ophthalmology, devices
.
Diagnostic imaging apparatus
At a Glance..
• Depended on the imports, which accounts for over 88% of the market.
• 70.4% of imports are from the European Union, Germany, the Netherlands and UK dominating the market.
Consumables
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Medical Tourism
Top Growth Opportunities
A hub in the Muslim world
High-quality and low cost
Transplants, Ophthalmology, and orthopedic purposes
At a Glance..
• A flourishing market, In 2012, Iran hosted over 200,000 health tourists, twice as much as the numbers in 2011.
• Majority of the visits are for transplants, ophthalmology, orthopedics and dentistry purposes.
• Iran offers high-quality expertise
with low costs.
• Investments in infrastructure to better serve the visitors, for example for the Azerbaijani tourists, medical services are provided by the border.
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For Additional Information
Anna Zanchi Corporate CommunicationsHealthcare+39.02.4851 [email protected]
Hilal CuraResearch AnalystHealthcare0090 (212) 709 88 [email protected]
Nils FrenkelAccount [email protected]