As countries emerge from an unprecedented public health crisis, the value of health has never been more apparent. Against this background, there are considerable opportunities in Life Sciences in the fast-growing markets of Asia. But post pandemic, where should Life Sciences companies locate their key value drivers?

Due to the evolving dynamics of the Life Sciences industry in Asia, there are strong arguments in favor of setting up regional headquarters, manufacturing or R&D facilities close to key Asian end-markets. The COVID-19 crisis has brought a new appreciation for the importance of keeping parts of the value chain local and ensuring multiple sourcing close to consumers. This will boost both local investment and direct investment from abroad, which in turn will spur on further development. Here, we explore some of the other ways Asian countries are attracting the attention of Life Sciences stakeholders.

The crisis has also accelerated digital transformation, enabling advances to happen at unprecedented speed. Fully embracing digital transformation in Life Sciences will contribute to superior patient outcomes while also providing care in a cost-effective manner. The effects will be far-reaching, breaking up old structures and shattering traditional value chains as the industry moves from a business model built around developing blockbuster drugs to one cultivated around a highly connected technology ecosystem. Singapore, for example, is blazing a trail in Asia with various initiatives coordinated by the Integrated Health Information Systems (IHiS) body. IHiS oversees the development and standardization of digital healthcare technology across all six regional health systems in the country. Around 800 digital IT systems have been designed, trialed or implemented, spanning areas as diverse as electronic medical records, medical imaging, laboratory test records, medication dispensing, patient registration, billing, financial aid, community care, telehealth and videoconferencing for consultations.

Given the relative youth of the Life Sciences industry in Asia, there is great opportunity to break free of traditional life science structures and establish a new basis for a future ecosystem. In India, many states are actively building incubator hubs to attract start-ups. At a national level, the Department of Biotechnology is seeking to set up Biotech parks and incubators across the country. Coming together under the National Biotechnology Parks Scheme, this is also creating an ecosystem for start-ups that have graduated from incubators and are looking to scale up their R&D activities. And in China, the government at both national and provincial levels has invested in the construction of biotechnology parks with the aim of developing major innovation hubs, with private investors also getting on board.

Governments in Southeast Asia have responded to concerns about differing levels of maturity in markets and regulatory environments. The Association of Southeast Asian Nations (ASEAN) issued the ASEAN Medical Device Directive in 2015, harmonizing medical device regulations, facilitating market penetration and encouraging efforts to meet the growing demand for innovative equipment. Now well established, the directive builds trust in quality and health safeguards in the member states. Countries in Asia need to continue their focus on creating a robust legal framework that cultivates trust if they are to continue to attract investment in Life Sciences.

The impact and aftershocks of the COVID-19 pandemic have revealed strengths and weaknesses across the global Life Sciences industry - building on its strengths and taking turbulence as an opportunity to transform. However, the rapid pace of change can be a challenge for those not familiar with Life Sciences ecosystems in Asia, especially as there remain many differences between individual countries. KPMG’s Site Selection for Life Sciences in Asia examines a range of countries in detail, setting out the advantages and disadvantages for Life sciences projects in these countries. Life Sciences executives should seek expert, on-the-ground advice to keep up with legal and regulatory changes, as well as to find the right location in terms of talent pool, infrastructure and incentives to locate regional headquarters, manufacturing plants or R&D centers.

Get more insight in our report: Site Selection for Life Sciences in Asia