Thailand’s internationally-admired performance in the pandemic of the COVID-19 virus has showcased the exceptional strengths of the country’s health care system and medical industry to further justify its drive towards becoming one of the world’s top medical hubs. A sophisticated healthcare system, universal healthcare coverage and robust public health consciousness have all contributed to Thailand’s success in containing the pandemic of COVID-19 virus and reporting one of the world’s lowest mortality rates from the disease.
Johns Hopkins University’s 2019 Global Health Security Index1 ranked Thailand as the world’s 6th best prepared country for confronting the pandemic, reflecting the country’s public health care system’s preparedness for coping with major public health emergencies such as the pandemic of the Covid-19 virus.
YouGov in partnership with the Institute of Global Health Innovation at Imperial College London released results from a survey2 in May which showed that Thais are the most likely to wear facemasks in public and use hand sanitizer as hygienic routines, across six countries in Association of Southeast Asian Nations (ASEAN).
This strong local medical environment, together with growing demand for health care locally and from abroad and the Thai government’s commitment to further develop the medical industry have enabled Thailand to be the most lucrative market for medical device manufacturing in Asia.
Placing Thailand’s health care and wellness service and its comprehensive medical industry among 13 key industries that represent the country’s new engines of growth over the next decade in line with the Thailand 4.0 policy, the Thai government has established a plan to develop the country’s medical sector as the global “Medical Hub”. This policy is a national strategy aiming of creating sustainable human development through the leverage of Thailand’s strengths in the manufacturing supply chain, the medical industry and biotechnology to build economic competitiveness over the long-term.
This position is reiterated in the Ministry of Public Health 2016-2025 plan for Thailand to become the world’s foremost destination for medical industry in four key areas of wellness, medical services, academic activities and medical products.
Cost advantage, high-quality medical services, attentive care of medical staff and unique wellness services have spurred demand for Thailand’s medical and wellness from abroad. The Ministry of Tourism & Sports is promoting Thailand’s medical and wellness tourism at the global level.
Thailand’s large healthcare industry is currently supported by 370 private hospitals, 50 of which are accredited by the Joint Commission International (JCI) global standard, while there were also 18 JCI-accredited medical clinics as of September 2019. This number is greater than any other countries in ten- membered ASEAN and fourth highest in the world.
Thailand’s attractive overall investment climate is underlined by rising competitiveness in many areas. The World Bank ranks Thailand at the 21st place out of 190 economies on the 2020 Ease of Doing Business Index, reflecting the country’s conducive regulatory environment for starting and operation of local firms3.
The World Bank also ranks Thailand at the 32nd out of 160 countries on the Logistics Performance Index in 2018, second only to Singapore in ASEAN4 for the biennial study.
These positive factors and Thailand’s strategic location as the gateway to growing economies of Cambodia, Lao PDR, Myanmar, and Vietnam enable Thailand to offer an ideal investment destination for a wide range of medical device manufacturers and healthcare service providers.
Growing Prospects for Medical Devices
Thailand’s economic competitiveness, rising demand from aging population,expanding middle class and more tourists seeking affordable high-quality health care services have supported growing future prospect for medical device industry. On top of that, the pandemic of the COVID-19 virus adds an impetus to the demand for a wide range of medical devices from frontline medical practitioners to general populations and accelerates the medical system’s adoption of more advanced medical devices.
Thailand boasts a strong industrial manufacturing supply chain and agricultural businesses to support the pharmaceuticals, medical food production and medical device manufacturing.
As a testament to the growing medical industry and importance of export base, Thailand’s outbound shipment of medical devices grew to US$ 843 million in 2018 from US$ 554 million in 2011. The value of imports grew to US$ 962 million from US$ 557 million, over the same period.
Electromechanical devices, in vitro diagnostic devices, single-use devices,ophthalmic devices, optical devices, and hospital hardware represented Thailand’s top medical device imports in 2018.
The reliance on the import of sophisticated medical devices underscores the significant potential for investment opportunities in Thailand. Thailand Board of Investment offers a wide range of incentives for investments that meet the national development objectives. The available tax incentives include the exemption of both corporate income tax and import duty on machinery and raw or essential materials used in manufacturing products for the export.
As for non-tax incentives, the BOI also grants the permission for foreign investors to hold up to 100 % ownership in most targeted businesses. Additionally, the BOI enhances the coverage and benefits of its Smart Visa program to attract the high-skilled experts, investors, and foreign start-ups in targeted high- technology industries under the Thailand 4.0 policy.
The BOI also introduces additional incentives to promote new investment by medical device manufacturers and industrial manufacturers who wish to adjust their production to meet the surge in the use of medical devices to cope with the epidemic of the Covid-19 virus.
Thriving Pharmaceutical Market
Thailand’s Universal Coverage Scheme, which now covers almost all of the country’s 70 million population, the rise in the medical demand from tourists and robust biotechnology have driven Thailand to be one of the strongest- performing pharmaceutical markets to support the medical care and wellness services in the Asia-Pacific region.
As Thailand becomes more integrated in ASEAN’s trade cooperation,the country’s market share for the export of pharmaceuticals to the Cambodia,Lao PDR, Myanmar and Vietnam and ASEAN countries continues to grow.
Foreign investment in Thailand’s pharmaceutical sector is also increasing,as the BOI is offering incentives to compensate overseas investors for increased burdens stemming from the upgrade of production facilities required to meet GMP standards (as per the PIC/S requirements). Such incentives include reducing operators’ costs and, as such, applicants for investment support who made successful applications in 2017-2018 are eligible for an 8-year corporate tax waiver.
The pharmaceuticals and medical device manufacturing sectors are also among the government’s targeted industries. If such businesses are established in the Eastern Economic Corridor (EEC) special economic zone which spans Chachoengsao, Chonburi, and Rayong provinces in the country’s Eastern region, they are also eligible for further investment support in the form of financial assistance with research and additional tax waivers.
Leading in R&D
With robust medical systems and the high caliber of their medical researchers, several Thai agencies have established themselves as leaders in the field of research and development and clinical trials in ASEAN. Leading in the battle against Covid-19, Siam Bioscience Co., Ltd. under the collaboration with Thailand’s Department of Medical Science has produced the first Thai-made RT-PCR test kits for the COVID-19 virus. The test kits, which meet the World Health Organization’s standard, were distributed to the medical laboratories across the country for speedy detection of the virus.
To facilitate more advanced biological products, Thailand’s government has put in place a complete regulatory framework to support local research and development activities such as derivations of blood, vaccine, proteins and Advanced Therapy Medical Products (ATMP) such as cell therapy products, gene therapy products and stem cell therapy products, including the Cell Therapy Act.
The strong government’s support, high-quality medical system and lower cost attracts a large number of biotechnology companies and contract research organizations to Thailand to conduct clinical trials for cures in ongoing high prevalence diseases such as HIV/ AIDS, Hepatitis, heart disease, cancer, dengue, malaria and infectious diseases including various strains of flu.