Healthcare Technology Featured Article

August 28, 2012

Want to Make Big Money? Embrace Middle Class in Emerging Healthcare Markets


Emerging markets in the healthcare world are suddenly hot ticket items in the investment community. Pharmaceuticals, medical technology and healthcare infrastructure are among the most sought-after opportunities in emerging markets, according to The Boston Company Asset Management in a statement.

The Boston company recently issued a white paper on these trends, Global Wealth Creation: The Impacts on Emerging Markets Health Care, which predicts which healthcare segments will benefit from continuing economic development in emerging markets.

For a long time, we’ve focused on healthcare for the middle class in this country. But the white paper noted that the expansion of the emerging markets’ middle class is allowing a growing portion of the population in these countries  to afford essential care now, while increasing government investment in public health care systems also is driving growth for health care services.

"While the rise in wealth is rapidly transforming health care in emerging markets, significant challenges remain," said Frank J. Goguen, senior research analyst and a co-author of the report, in the statement. "Investing in the sector requires a selective and fundamental approach to uncover quality companies that will capitalize on the secular growth trends inherent in emerging markets health care."

Even countries like China are coming around to our country’s way of dealing with healthcare. The report pointed to the rapid expansion of health insurance and the pharmaceuticals industry in China, but where we have efficient distribution of pharmaceuticals and a hospital system that usually provides excellent care, so is not the case in China.

The report also noted the projected growth of the pharmaceuticals industry in Russia and the overwhelming effects healthcare expenses have on rural poverty in India.

Russia’s pharmaceutical market shot from a 2005 valuation of $6.6 billion to almost $18.7 billion, climbing at a remarkable Compound Annual Growth Rate (CAGR) of 23 percent.

In Brazil, patients must contend with overcrowded hospital waiting rooms and under-trained operators of medical equipment, the report said. However, the company said that it sees growth in Brazilian private health insurance and increased public funding for medical facilities and training.

Frost and Sullivan reported today that “government investments, consolidation of the middle class, and high disease burden will fortify Brazil's position as a top-rung market in the global healthcare industry,” and create significant opportunities for local and multinational companies in healthcare sectors, and “will stoke double-digit growth rates by 2015.”

As in other countries, one of the biggest winners will be the pharmaceuticals and biotechnology sector, which is expected to be the sixth largest in the world in 2015, the research firm said.

"Success for these emerging countries ultimately will be measured by a rise in life expectancy, a decline in child mortality rates, and healthy economic growth," Goguen said.

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Edited by Allison Boccamazzo
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