Healthcare

Asia is fast emerging as a hub in the pharma industry and is supported by innovations such as stem cell research and biogenetic manufacturing. Singapore, one of the developed economies in Asia, is already a centre for high-end biotechnological research. There are a number of ethical and reputational aspects for the prospective and responsible investors which include organ donation etc.

The Asian healthcare industry has typical contrasts between developed countries like Singapore and Hong Kong and the emerging economies of India, China and Indonesia. There are glaring differences between countries in regions also. There is rapidly increasing national insurance coverage, affordability, and governments in these counties are spending hugely in overhauling their healthcare infrastructure. Along with these, there are a number of environmental, social and governance issues for consideration by investors in their investment decision-making process.

Companies such as Dr. Reddy’s and Fortis are the leaders in their sectors. While Dr. Reddy’s leads the field in the pharma sector, Fortis is well ahead in the healthcare rankings. Access to Medicines and Healthcare are the two biggest social issues faced by the sector. In contrast to Europe and the United States, in Asia, healthcare financing is mostly out-of-pocket and companies are under huge pressure to modify pricing in a significant manner.

The generic drug manufacturers as well as multinationals have been raising their prices over the past decade. In countries like India, companies are encouraged to move beyond their traditional profit centres and accept responsibilities because of the inadequacies of healthcare infrastructure.

Environmental issues like climate change and energy efficiency could be critical for company earnings because of factors such as carbon taxes, emissions and increased water pricing. Issues pertaining to governance continue to influence the pharma industry. This is especially so because of conflicting interests from different quarters and stakeholders.