Healthcare to Myanmar

Trends and opportunities

The market

The Myanmar health care sector faces many challenges, however progress is being made in both the public and private sectors to improve access to services across the country for its 53 million citizens.

Myanmar has 1132 public hospitals, ranging from 2000 bed major hospitals in Yangon and Naypyidaw to fewer than 20 beds in rural health clinics. As of 2015, health spending was equivalent to 3.8 per cent of gross domestic product (GDP).

The number of private hospitals in the two major centres of Yangon and Mandalay, has slowly been growing. Public hospitals have been upgrading facilities due to an injection of funds from international donors and greater allocation of budget (Source: The Report, Oxford Business Group, 2017).

Also, Myanmar has the lowest level of government health expenditure. According to the World Bank, Myanmar spent US$20.29 per capita in 2014, compared with just US$4.74 per capita in 2005. Around 70 per cent of Myanmar’s population lives in rural areas where health care penetration is low (Source: UNDP Myanmar). With only one doctor for every 2772 people and only one psychiatric hospital in the country, Myanmar ranks 190 out of 191 in overall health system performance, according to the World Health Organization.

Public investment is expected to reach US$2 billion in the coming years through increased government spending, rising incomes and public awareness of the importance of health care (Source: consultancy.uk). For the first time the government will have access to over 757 billion Kyats (approximately US$550 million) to transform the outdated medical sector (Source: Myanmar Insider, March 2017).

The World Bank, the Global Fund and the Three Millennium Development Goals Fund are encouraging the move towards universal health coverage, providing financial assistance to tackle HIV/AIDS, tuberculosis (TB) and malaria, as well as support for the development of health care for pregnant women and children (Source: The Report, Oxford Business Group, 2017).

Private investors are also looking to participate in the fast-expanding sector. From 2014, foreign companies are allowed to invest in hospitals, clinics and diagnostic services and devices up to 80 per cent of ownership in the venture (Source: vdb-loi.com) and investors from Thailand, Malaysia and Indonesia have set up a number of joint ventures in Myanmar.

Opportunities

  • Health care services training: Capacity building opportunities exist in the areas of vocational training of doctors, nurses and hospital workers across all specialty medical areas, hospital administration, patient management and after-care.
  • Diagnostic devices technology: Myanmar’s emerging medical device market has seen growing opportunities especially in diagnostics imaging (DI) device and in-vitro diagnostics (IVD) sector. The drivers behind this include the increase in healthcare spending, upgrading of healthcare facilities and the growing demand for high quality diagnostics test results.
  • Health solutions: The healthcare network in Myanmar is spread throughout the country. About 70 per cent of Myanmar’s population lives in rural area where health care penetration is lower. With a relative absence of public service infrastructure and a challenging geography, the healthcare IT opportunity in this market will be a major contributor to growth over the medium to long term. Examples of key growth areas are telehealth, telemedicine, electronic medical records, and the use of healthcare mobile applications for point-of-care diagnostics, particularly in remote and rural areas.
  • Pharmaceuticals: Myanmar is a large market with huge potential for the future. Total pharmaceutical expenditure is expected to grow 19 per cent per annum in the next three years, from US$ 600 million in 2016 to more than US$ 1 billion by the end of 2018 (Source: Zuellig Pharma, Myanmar).
  • Health insurance: The current healthcare system is 78 per cent out of pocket expenses of total medical spending on diagnostic, private clinic visits and also self-prescribed medicines (Source: consultancy.uk).
  • Senior living homes: With growing middle class incomes, there is strong potential for aged care facilities and management services. In the field of healthcare service, local operators have limited expertise in aged care and are seeking partners.

Competitive environment

  • In mid-2015, two foreign firms, with a combined investment value of US$520 million, signed to build 14 new hospitals including Thonburi Hospital Group from Thailand. The joint venture was formed with the Ga Mone Pwint Company to build two hospitals in Yangon and Mandalay, valued at US$100 million (Source: consult-myanmar.com).
  • Additionally, Lippo Group from Indonesia has entered a joint-venture with First Myanmar Investment (FMI) for US$420 million. The group has upgraded the facilities and services of FMI’s Pun Hlaing Hospital, and has plans to build 12 hospitals over the next five years, with the first to open in Mandalay in 2017 (Source: dealstreetasia.com).
  • Bumrungrad Hospital, Thailand’s second-largest health provider, was also granted a business permit in October 2015 from the Myanmar Investment Commission to operate a private clinic. Bumrungrad Myanmar – has a registered capital of US$1.33 million and will offer private clinic and diagnostic services. According to local media, the Thai company will hold an 80 per cent share in the venture, while a 20 per cent stake will be held by Yangon International Medical Services (Source: mmtimes.com).
  • Malaysia’s IHH Healthcare, the world’s second-biggest hospital operator with the Gleneagles and Parkway brands, signed an agreement in January for a A$70 million, 250-bed hospital on a prime tract of government land close to Yangon, which it expected to open in 2020. The project broke ground in 2016 and, under a build-operate-transfer agreement, the private hospital will become public in 50 years. As of early 2017 the government over-turned the land allocated and the project’s future remains uncertain (Source: The report/Oxford Business Group, 2017).
  • More than a dozen representative offices across Myanmar are servicing the country’s growing outbound medical tourism market.

Tariffs, regulations and customs

Myanmar is a member of the ASEAN Australia New Zealand Free Trade Area (AANZFTA). Reflecting its lower level of economic development, Myanmar’s commitments to reduce tariffs under AANZFTA is being phased in at a slower rate than other parties to the agreement. Tariffs on most items are scheduled to begin reducing in either 2015 or 2020.

Marketing your products and services

Market entry

For suppliers of technology and equipment, local agents and distributors with specialist industry knowledge and established networks are generally the best way to build market contacts, navigate regulatory and procurement processes and identify emerging opportunities.

Services firms should consider establishing a relationship with a local business partner and/or establishing a direct presence in Myanmar.

Austrade Yangon can provide additional information on specific infrastructure projects and can also help to identify potential local partners for interested Australian companies.

Transport

Most imported products arrive by sea through Yangon port, Myanmar’s busiest port. Road transport overland from neighbouring countries, particularly China and Thailand, is possible.

Myanmar has three main international airports, in Yangon, Mandalay and Nay Pyi Taw which are all at various stages of upgrades. A new international airport in Hanthawaddy, about 80 kilometres northeast of Yangon, is currently in the early stages of planning (Source: Frontier Myanmar, Waiting for take off at Hanthawaddy Airport, February 2017). Myanmar now has direct air connections with most countries in east Asia, with most of these connections being into Yangon. Mandalay also has an international airport.

Links and industry contacts

Asian Development Bank
DFAT Free Trade Agreement Portal
Directorate of Investment and Company Administration
International Finance Corporation
Ministry of Health and Sports (Myanmar language)
Myanmar Investment Guide
Myanmar Red Cross Society
Union of Myanmar Federation of Chambers of Commerce and Industry
World Bank

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