Korean Medical Device Market Ripe with Opportunity

Korea’s aging population, rising average income, demand for sophisticated medical technology, and dependence on imports for high-end products creates significant opportunities for medical device companies. These are the latest findings of Espicom Business Intelligence (London, United Kingdom), a business intelligence firm.

Over the past 50 years, Korea’s economic and social progress has transformed it from a poor agrarian state to a first-world country and an important economic power. Today, Korea ranks among the world's leading economies, with a population close to 50 million and per capita gross domestic product (GDP) of USD 24,843, ranking it among the top 15 in the world. One of the consequences of this powerhouse economy is that a majority of the country’s population expects to receive a high level of medical care. As a result, Korea has the highest healthcare expenditure among all the “Asian Tigers,” reaching 7.4% of GDP in 2011.

The share of GDP allocated to healthcare, however, remains below the Organization for Economic Cooperation and Development (OECD; Paris, France) average of 9.3%. An estimated 59% of Korea’s healthcare expenditure is funded by the public sector, with almost all the country’s citizens covered by the National Health Insurance Corporation (NHIC; Seoul, Korea). Health service delivery mechanisms have contributed to a dramatic improvement in mortality and avoidable morbidity, with Korea now having life expectancy that is equal to the OECD average.

While Korean medical device manufacturing companies show particular strength in ultrasound apparatus, dental products, therapy apparatus and consumables, about 60% of the market consists of imported products as a result of lack of technology, capital, and awareness. Hospitals are forced to import devices which are not manufactured in Korea, including cancer treatment products. The top 10 medical devices imported by Korea include stents, CT systems, magnetic resonance image (MRI) systems, knee implants, and kidney dialysis devices. Other devices include linear accelerators, clinical pathology diagnostic devices, endoscopes, and microscopes.

The aging of major diagnostic devices like CT and MRI will make replacement inevitable, resulting in strong sales opportunities for manufacturers of high-value medical devices. The growing trend of laparoscopy and endoscopy due to minimal patient scars and reduced hospitalization will continue to drive the demand for minimally invasive surgery (MIS) products. Medical device imports are estimated to be USD 3.2 billion, out of which with the United States contributed about 40% of the market, followed by the European Union (EU), and Japan.

Additionally, by 2030, people aged over 65 will account for 25% of Korea’s total population, as a result of which the focus of the medical device industry will shift from treatment to prevention, thereby driving a continued demand for diagnostic devices.

Related Links:
Espicom Business Intelligence
National Health Insurance Corporation
Organization for Economic Cooperation and Development