The rise of PHP 25 billion Health Technology in the Philippines: Ken Research

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The Philippines Health Tech Market, which surged ahead with over 24.3% year-on-year growth in 2020, is poised to be a staggering PHP 55.0 Bn industry by 2025, as per findings released by Ken Research.

The Philippines Health Tech Market had a slow growth initially. The slow growth corresponded to poor internet penetration and a lack of technology awareness. Unorganized health tech infrastructure and a less tech-savvy population led to the accumulation of unharmonized healthcare data. The government faced a major difficulty when the healthcare challenges kept on increasing with the growing population. Increasing need and high government interest positively drove the Philippines’ health tech industry.

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1. Understanding the Health Insurance in the Philippines with Focus on Government Side

PhilHealth is the health insurance run by govt. and it extends to all citizens. It is a compulsory membership for employees in which half of monthly premium is contributed by employer and half by employee. Moreover, Health Maintenance Organization (HMO) which is a private providers of Healthcare Insurance, gives access to doctors within their network. Furthermore, Private Health Insurance offers a more comprehensive private healthcare network than HMO and is usually for a longer duration

2. Mercury Drug holds around ~60% of the E-Pharmacy market in the Philippines

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COVID 19 has accelerated and pushed the use of e-pharmacy platform in Philippines, as more and more people are now accustomed to the idea of using online services. Mercury Pharmacy has been operating offline since 1945. It started selling drugs online in year 2003. It is the leading player of the E-pharmacy market.  It operates on Omni channel model through Gamot Padala using which customer can schedule pickup of medicine from store through phone or internet.  Mercury Drug introduced its free Suki Card, a rewards system for its loyal customers that is fully transferable, without annual membership fees, enabling customers to earn points that can be used as rebates in their next purchases or to redeem exclusive Mercury Drug items.

3. Around 50% of the overall E-Pharmacy orders are placed from the Northern Region.

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The northern region is most populated and have most standalone or hospital-based pharmacies. Most E-Pharmacy work on the aggregator model therefore maximum operating models are designed in the capital city or near the city. Moreover, majority of the players import and distribute products or import drug and outsource production to local manufacturer are located in Northern region. This is driving the cost of medicines and therefore affect the delivery charges.

4. Government Regulation and Initiatives in Philippines which are helping the health tech market in Philippines to flourish.

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FDA issued regulation for implementation of E-Prescription on 17^th March 2020. This regulation allowed a medical prescription captured as a photo, or created as a pdf, jpeg, or other photo file format, sent through email or messaging application to be deemed equivalent to a written prescription. Additionally, DOH in partnership with National Privacy Commission (NPC) launched telemedicine services due to Corona Outbreak for NCR region in April 2020 and plans to expand it to other regions. It also partnered with private entities such as KonsultaMD and Medifi.  Moreover, DOH and NPC issued guidelines and defined regulations for telemedicine on 7^th April 2020. It was aimed to connect hospitals across country using the networks established by DOST.

Factors such as cheap product variants, additional availability of doctors, shifting from traditional to online health services will drive the Philippines Health Tech market in the near future both in terms of revenue and sales volume. Apart from domestic players, numerous other international players might enter the market and will contribute towards the growth of the Philippines health tech industry in future.

The ups and downs of PHP 25 billion Health Tech Industry in the Philippines: Ken Research

 The Philippines Health Tech Market, which surged ahead with over 24.3% year-on-year growth in 2020, is poised to be a staggering PHP 55,000.0 Mn industry by 2025, as per findings released by Ken Research.

Covid-19 impacted the Health Tech market positively by forcing the government to lift up the existing barriers in terms of laws and regulations. Additionally, health tech implementation is slowly and gradually resolving most challenges of healthcare accessibility in remote areas. The Philippines is witnessing faster internet penetration. As adoption increases, the scope for health tech solutions would also increase in the coming years. This market is expected to witness a growth of 30.5% in the next 3 years.

Click to Read Full Article: Philippines Health Tech Market

1. Online drug distribution has never been easy in Philippines

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As per the Food and Drug Administration of the Philippines, Advisory Number 2019-154, issued on 11th June 2019, online selling of medicines is not permitted as per the existing laws, rules and regulations. FDA only allows online ordering services if the seller has an existing FDA licensed pharmacy with physical address. Moreover, online ordering services are additional Services of a Pharmacy subject to approval of FDA.

2. Online consultation market has seen an exponential growth after the month of April (during lockdown)

Online consultation had a slow growth in the beginning but during the lockdown many users preferred using these platforms. Many physicians and other doctors’ groups started offering telemedicine service voluntarily in order to provide relieve hospitals from the burden of the Covid patients. A sudden increase was seen in the users for various platforms such as Medifi, Konsulta MD, Seeyoudoc and others. Moreover, in future, over 100 Mn Filipinos will soon have basic health services and reduced out-of-pocket expenditure with the impending rollout of the UHC Law promoting telehealth services.

3. Ayala Corporation has an eye on most Health Tech Start-ups.

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AC Health generated PHP 40 Mn in year 2020.  Although Ayala Corp. saw a drop of 17% in Q1, tele- communication and power subsidiaries remained steady even during ECQ. Moreover, the company is willing to invest in hospital of nearly 100 beds with in-house IT solution and Pharmacy. Focus will be on continuing to promote telemedicine as an alternative access point for healthcare services.

4. Around 30% doctors prefer using online services which provides a scope for appointment booking market to grow.

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Why was there an urgency to integrate Appointment Booking? Around 39 mins are wasted to reach the nearby healthcare facility in remote areas and an average waiting time at a doctor’s place is 2 hours. This was the reason doctors’ patients and doctors prefer online booking. Reduced waiting hours, user convenience, centralized information system will help the appointment booking platforms prosper in the future. Manila being the capital city, is expected to contribute the highest share in the revenue of the appointment booking industry. Moreover, shortage of the doctors is the major centered problem in Philippines and that can be addressed using online portals to booking appointments online

Philippines Government has become proactive in using technology. Service providers, government regulators and various civil society organizations in the Philippines have been pushing the adoption of telemedicine as a response to the COVID-19 crisis. Moreover, advent of Covid-19 has reasonably profited the Health Tech Market. Furthermore, the Home Healthcare market is expected to boom in the coming years. All these factors will increase in market share of the Philippines Health Tech Industry.