Health, Pharma & Medtech Sector
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The importance of a functioning health system has never been as clear as during the ongoing coronavirus pandemic. Disease control and healthcare are true pillars of every modern society. COVID-19 has highlighted the extent of neglect in health systems around the world. However, experts point out that by exposing the weaknesses, the pandemic will undoubtedly become a driver for innovation and improvement in the near future.
Many parts come together in providing the big picture of health and the healthcare industry. The pharma, biotech, and medtech industries are probably the most prominent because they are driven especially by research and technology. But there are other essential parts like healthcare providers, payers, care facilities, and many more. And finally, knowing the health situation of a population is essential for understanding industries, markets, and drivers of this sector.
CARE & SUPPORT
Care and support is provided in several different ways and operates under a range of formal and informal settings. While hospitals and physicians provide a clear image of a country’s health system, care provided outside of these lines is not always so easy to assess. Firstly, care and support is offered to a vast array of people, although mostly to those who require assistance with their daily living due to old age, disease, mental disorders, or disability. Secondly, care can be provided in diverse settings, such as health care facilities, nursing homes, or a private home. Thirdly, caregivers include a wide range of different community health actors. For these reasons, assessing the full extent of care and support is a complex matter.
INDUSTRY DEFINITION
In order to form a greater understanding of care and support, it is imperative to examine all the activities associated with this vital branch of the health care sector. Care and support is inherent to life. The core element of care is helping an individual to fulfill their fundamental human needs. These daily acts maintain and upkeep existence on an individual, collective, and social level.
MARKET SIZE
Care and support structures
Care and support is provided in a variety of formal and informal structures. In most countries, however, hospitals account for the largest share of health expenditures. In 2018, long-term care facilities in the U.S. represented only five percent of the country’s total health expenditure. Long-term care is provided in the person’s home by unpaid caregivers (such as family or friends), nursing homes, assisted living facilities, or rehabilitation centers.
MARKET SEGMENTS
Care and support recipients
Care is most often provided to the elderly. Thus, since populations are aging in many developed countries, elderly care has become an increasingly discussed issue. As a person ages, the likelihood of requiring long-term care increases. Women are more likely than men to use long-term care due to a longer life expectancy. Care and support recipients are also often younger adults with mental or physical disabilities. As of 2017, around 13 percent of the U.S. population had some type of disability.
MARKET SEGMENTS
Caregivers
In 2020, more than 1 in 5 Americans were caregivers, which represented around 53 million caregivers in the United States. Caregivers can be paid but are often unpaid family members, friends, or other people from the individual’s social network. Caregivers provide care to an adult or child with special needs. Typical tasks of caregivers include helping the individual to eat, bathe, dress, and use the toilet, as well as pay bills, clean the house, manage medicine, and monitor health.
INDUSTRY TRENDS
The responsibility of caregiving
For those who have full- or part-time jobs, the responsibility of caregiving can prove an added burden. Assuming such a role can have multiple consequences on a person’s life. Some people might reduce their working hours, others may resign from their job. Furthermore, caregiving can be particularly stressful, especially when caring for someone with a loss of mental abilities.
HEALTH PROFESSIONALS & HOSPITALS
Hospitals are essential to any healthcare system. These structures represent the main healthcare expenditure in most countries and employ many health professionals. Whether they work in a hospital setting or not, healthcare workers are the cornerstones of any health system.
The COVID-19 pandemic has shined a spotlight on hospitals. Despite earlier warnings, hospitals around the world were not prepared for this pandemic. The importance of intensive care bed density and the lack of supplies required to handle such a scenario, such as personal protective equipment (PPE) and other vital medical resources, became apparent. Many countries also faced medical staff shortages, with employee exposure to the coronavirus and economic layoffs playing a big part in the problem. Ultimately, hospitals and health professionals represent the backbone of a country's health system and assessing their quality relies upon the accessibility and affordability of care and treatment.
INDUSTRY DEFINITION
Hospitals and health professionals are the backbones of any health system. This category provides key data on hospital structures and the professionals who help run them. Hospital infrastructures are bound to evolve as countries face aging populations, rises in prevalence of chronic diseases, increases in disposable income, and growth in penetration of health insurance.
MARKET SIZE
Hospitals account for the largest share of health expenditure
In 2019, the hospital services market size was valued at 8.22 trillion U.S. dollars and expected to surpass 15.45 trillion by 2027. In the U.S., it is estimated that hospitals contribute up to three trillion U.S. dollars to the economy through spending per year. Nonetheless, the U.S. spent 34 percent of its health expenditure on hospitals in 2018 and has the highest health expenditure worldwide. In 2018, the United States spent about 17 percent of its GDP on health expenditure.
MARKET SEGMENT
Public and private hospitals
Hospitals function either on public or private ownership. Public hospitals are primarily financed by the government, while private hospitals can be either profit-driven or non-profit. In 2018, the U.S. had around 1,910 publicly owned hospitals and 4,783 privately owned hospitals. The share of public and private hospitals varies from one country to another, depending on their health system, government, and income levels.
INDUSTRY TRENDS
Lessons learned from the COVID-19 pandemic
Despite earlier warnings from organizations, hospitals were unprepared for an emergency such as the COVID-19 pandemic. Countries implemented lockdowns to avoid hospital bed overcapacity, staff shortages, and a lack of supplies and vital medical equipment. The different preparation levels of countries prompted a global discussion. Ultimately, hospital functioning is under increased scrutiny and is bound to evolve to better respond to future scenarios.
INDUSTRY LEADERS
How to assess the efficiency of hospitals
Hospitals are a pillar of any health system. These structures depend inherently on a country's health system and thus on its government. Hospitals are either measured in terms of structure density, hospital bed density, occupancy, length of stay, expenses, or funding. Perhaps the main criteria for an effective health system are how care and treatment are accessible and affordable.
HEALTH SYSTEM
Health systems around the world were recently brought into the spotlight due to COVID-19. The pandemic showed the strengths and weaknesses of different health systems and demonstrated the importance of efficient health systems in promoting and maintaining the health of a population. The long-term impact of the global outbreak remains to be seen, but it is clear the pandemic revealed flaws in health systems. Changes to funding, organization, and institutions may end up being a positive result of a terrible event.
INDUSTRY DEFINITION
A health system, or health care system, refers to the organizations, institutions, resources, and people that maintain, promote, and provide health care within a country. Countries fund their health systems in different ways, and most countries use a combination of methods. These methods include general taxation, a national health insurance plan, voluntary or private health insurance, out-of-pocket payments, or donations to charities. Health systems, along with the organizations and markets they encompass, vary widely around the world, which is one reason why international comparisons of health standards can be difficult and complicated.
HEALTH ECONOMICS
Who spends the most?
The amount a country spends on health care varies depending on its size, the health problems it faces, and the type of health system it has established. The United States spends almost 17 percent of its GDP on health care, which is more than any other country. The United States also spends around 10,600 U.S. dollars per capita on health expenditure, the highest in the world, followed by Switzerland and Norway.
HEALTH POLICY
Which country is most satisfied with their health system?
Health systems, much like other social institutions, generally reflect the culture, history, and economics of a country. This is one reason why comparing health systems can be difficult. The countries where people are most satisfied with their health system include Saudi Arabia, Singapore, Belgium, and the United Kingdom. Within the United States, the health care system remains an issue of contention and political debate.
PRIVATE HEALTH INSURANCE
Private health insurance still dominates in the U.S
Private health insurance plans are those provided by private companies, in contrast to public health insurance plans that are provided by a government. The degree to which private insurance plans are available varies by country. In the United States, private health insurance, usually through an employer, is the most common type of health care coverage, with around 178 million people covered under private health insurance plans.
PUBLIC HEALTH PROGRAMS
The importance of Medicare and Medicaid in the U.S.
Many countries, such as the United Kingdom, have public health insurance plans funded through taxes. These plans often provide universal coverage and help ensure each citizen has access to the health services they need. Although the United States does not have a universal insurance plan, it does have public health plans for low-income families (Medicaid) and the elderly (Medicare). Currently, around 75 million people are enrolled in Medicaid, and 61.3 million people are enrolled in Medicare.
MEDICAL TECHNOLOGY
The medical technology industry is a renowned part of the overall healthcare sector. In an online and interconnected world, health information technology (HIT) is an increasingly important part of the medtech branch. HIT involves the sharing and analysis of health data through electronic health records which should enable more coordinated and accurate care, although privacy concerns remain among some patients.
The overall industry is forecast to reach an annual size of 500 billion U.S. dollars within the next couple of years. The largest segments within the industry, by revenue, are in vitro diagnostics (IVD), cardiology, diagnostic imaging, and orthopedics. The area of digital health and telemedicine should continue its rise in use and importance, particularly in response to the COVID-19 pandemic. These solutions have been marketed as a route to more efficient experiences for both the patient and the healthcare provider.
INDUSTRY DEFINITION
The medical technology category offers data on the products and services used in the healthcare sector. Encompassed within this division are assistive devices, digital health, implantable devices, and overall medical equipment that functions to prevent, diagnose, or treat diseases and illnesses. Among the most prominent medical technology products are, but not limited to, pacemakers, imaging instruments, dialysis machines and implants. Medtech is a multi-billion dollar industry for the companies involved in the industry, with operations taking place on a global scale.
MARKET SIZE
Revenues continue to grow in medtech
The global medtech industry’s revenue stood at approximately 384 billion U.S. dollars in 2020. This represented a 37 percent increase since 2011, and the market was forecast to increase to around 600 billion U.S. dollars by 2024. Research and development plays a significant role in the progress of medtech as companies continually pursue the most cutting-edge technologies in healthcare. Over 31 billion U.S. dollars was spent on R&D in the medtech industry in 2019.
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MARKET SEGMENT
IVD the leading segment in medtech
In vitro diagnostics (IVD) was the leading segment of medical technology globally with a revenue of over 52 billion U.S. dollars. In vitro refers to any tests that diagnose and detect diseases, infections, and other conditions. IVD can range from very simple devices which a person could use in their own homes to very complex instruments used in a laboratory. IVD was projected to remain the most valuable segment in the future.
INDUSTRY TRENDS
Digital health
Digital health has become a more prominent presence in recent years, and the segment was forecast to continue growing. The market for telemedicine was projected to increase from 45 billion U.S. dollars globally in 2019 to nearly 180 billion U.S. dollars by 2026. Telemedicine has been particularly important since the beginning of the COVID-19 pandemic, with patients hesitant to travel for non-urgent appointments.
INDUSTRY LEADERS
Medtronic Inc the current frontrunner
In 2019, Medtronic Inc. was the leading medical technology company in the world, with a revenue of over 30 billion U.S. dollars. Founded in 1949, Medtronic is a U.S. company currently headquartered in Minnesota but with executive offices in Ireland. Johnson & Johnson, also a U.S. company, had the second-highest revenue at 26 billion U.S. dollars. Within the industry segment of IVD, Swiss company Roche had the highest market share, although this is forecast to decrease slightly by 2024.
REGIONAL OVERVIEW
The U.S. the biggest market for now
The U.S. and Western Europe are the most established hubs of the medtech industry, generating the largest share of the global revenue. Consequently, most of the top medtech companies come from these two regions. Asia, and particularly China, are expected to become more prominent within the global industry in the future. In the past 10 years, the value of medtech exports from China has increased and amounted to 28.7 billion U.S. dollars in 2019.
PHARMACEUTICAL PRODUCTS & MARKET
Currently, the size of the global pharmaceutical market is around 1.25 trillion U.S. dollars. The range of pharma products varies from antibiotics which haven’t changed much in almost a century to the latest generation of gene therapies and individually tailored treatments. The increasing use of big data and artificial intelligence in researching diseases and developing new drugs massively accelerates the pace of this industry.
Especially in 2020-2021, one can say that the whole world was watching the pharmaceutical industry. This was, of course, because of the ongoing coronavirus pandemic and the call for safe and effective vaccines and treatments to get back to normal life. Medical biotech companies like BioNTech from Germany and U.S.-based Moderna, previously mostly unknown to the broader public, were and still are in the midst of global interest, underpinning the important role of this technology- and innovation-driven industry.
INDUSTRY DEFINITION
The pharmaceutical industry is responsible for the development, production, and marketing of drugs used for various types of prevention measures, treatments, and therapies. Major aims of pharmaceutical products are to cure a medical condition, delay its onset, or reduce the symptoms. Many of the larger pharmaceutical companies are not only pure drug manufacturers, but are also involved, for example, in the production of medical devices or consumer health products. Within the pharmaceutical landscape, smaller biotechnology drug companies represent the most innovative part of the industry. Drug manufacturers are often in cooperation with academic sites where an important part of the initial research is carried out.
MARKET SIZE
A crisis-proof market
The pharmaceutical industry is seen as one of the more crisis-proof sectors. Today a roughly 1.3 trillion market, the revenue development has not shown any major drops during the last two decades. It is also expected that the economic crisis caused by the COVID-19 pandemic will not hurt the industry too much in the short term. However, clinical trial process changes, regulatory questions, ethical discussions, and the accessibility of medicines will be of increased importance in the long run.
MARKET SEGMENTS
Different ways to segment the industry
There are several ways to segment the pharmaceutical market. Frequently used is the distinction between prescription drugs and non-prescription drugs (over-the-counter). Drugs can also be divided into products derived from chemicals and products which enhance biotechnology (biologics). When categorizing the industry by therapeutic areas, the top revenue-generating segments are oncology, diabetics, and pain relief.
INDUSTRY TRENDS
Major trends are reshaping the industry
Just as many other industries, the pharma industry is in a steady process of innovation and reshaping. Buying knowledge through M&A activities, outsourcing of research, as well as medical and technologic breakthroughs are just some of the key developments. We see more and more companies involved in personalized treatments and developing therapies for patients with rare diseases. Big data crunching, machine learning, and real word evidence are becoming new pillars of research and development.
INDUSTRY LEADERS
Not much change among the frontrunners
In general, there is not much fluctuation among the leading pharmaceutical companies. The biggest firms based exclusively on pharmaceutical revenue are Pfizer, Merck, and Johnson & Johnson – all of which are American – and the two Swiss giants Roche and Novartis. For many years, Pfizer was the global leader, but it was overtaken by both Swiss rivals in 2019. Roche is not only the world’s largest biotech drug company but also the global leader in oncology.
REGIONAL OVERVIEW
The U.S. is the industry's driver
Almost half of the world's pharmaceutical revenues are generated in the United States. With its life science and technology hubs that guarantee innovation and a market that is paying the highest drug prices worldwide, this is unlikely to change in the foreseeable future. On the other hand, China has suffered a loss of momentum. The world’s second-largest pharmaceutical market saw regular double-digit growth until the mid-2010s, but that has since dropped.
STATE OF HEALTH
Health became a major issue worldwide in 2020 with the COVID-19 pandemic. The pandemic reminded the world once more of the dangers of diseases and health risk factors, as well as the value of prevention measures and effective treatment. Moreover, the pandemic also highlighted the importance of mental health, as people around the world struggled with the anxiety, stress, and depression brought upon by the pandemic and the isolation from lockdowns. The health issues that the coronavirus has raised will continue long after the pandemic has been controlled. It will be up to the world to remember these lessons and to practice, promote, and maintain health and wellbeing.
INDUSTRY DEFINITION
The state of a person’s health describes the general condition of their mind and body. One’s state of health may be negatively impacted by disease or mental illness, and their race, ethnicity, gender, and income level may contribute to their health risks. Behavioral factors, such as smoking and unhealthy eating, can also impact one’s health and lead to an increased risk of disease. Although therapies and treatments have greatly improved, access to them remains a real problem, and not every disease can be effectively managed. Therefore, prevention of disease and health risks, for example through healthy living, early detection, and vaccination, remains essential in maintaining the health of populations.
DISEASES
The impact of diseases
Broadly, diseases in humans can refer to any condition that causes pain, discomfort, distress, or death. The main disease types include infectious diseases, deficiency diseases, hereditary diseases, and physiological diseases. However, diseases are often classified simply as communicable and non-communicable. Although the impact of a specific disease depends on the country, region, and population, some of the most common diseases worldwide include cancer, heart diseases, and depression.
MENTAL HEALTH & SUBSTANCE ABUSE
Diseases of the mind
Although sometimes not as noticeable as other diseases, mental health problems are widespread around the world. Mental disorders impact millions of people, and the most common types include anxiety disorders and mood disorders, such as depression. Treatments for mental health issues include therapy, counseling, support groups, medication, and hospitalization. However, access to mental health services remains a problem in many countries.
PREVENTION
The first line of defense
Although some diseases cannot be prevented, many are caused by risk behaviors. Therefore, the risk of certain diseases, such as cancer and heart disease, can be minimized through such actions as healthy eating, exercising, not smoking, and having recommended screenings. Receiving recommended vaccinations is also one of the best ways to prevent some common and deadly diseases. Through vaccinations, diseases such as polio and measles are no longer problems in many parts of the world.
THERAPY & TREATMENT
The never-ending battle
Although medicine has improved greatly in recent decades, certain diseases still lack effective treatment, and access remains a relevant issue in many parts of the world. Treatments can include various types of therapies, surgery, and medicine. When a disease cannot be cured, treatment helps to control the disease and its symptoms.
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