A Great Asian Pivot: How is the APAC Region is Shifting from Importing to Innovating in Healthcare?

For decades, the global view of the Asia-Pacific healthcare market was simple: it was a place to manufacture cheap components or a massive population to sell finished products to. A recent gathering of industry leaders from Vietnam, Malaysia, Indonesia, the Philippines, and Australia re-evaluated that outdated paradigm. The conversation has shifted from cost-cutting to “resilience”—a strategic move to domesticate production, harmonize regulations, and secure national health infrastructures against the next global disruption.

Vietnam: The Digital Transformation of Care

Vietnam is currently undergoing a scientific overhaul driven by a specific catalyst: the post-pandemic reality. The country is not just buying equipment; it is rewriting the rules on how care is delivered.

Hua Phu Doan, Chairman of the Ho Chi Minh City Medical Equipment Association, outlines a market that is rapidly pivoting toward high-tech integration. The state is pressing for “smart hospital management systems” and data-analytical capabilities. This isn’t aspirational; it is codified in new regulations.

“The new medical regulation for DOC2024 presents the opportunity and challenge in updating, adapting, and leveraging the policy,” Doan stated. He emphasized that this regulatory update signaled a significant change in the landscape for 2024. Consequently, investors and manufacturers could no longer rely on old playbooks; the new market rewards those who bring “smart” solutions—specifically remote health monitoring and AI—rather than just hardware.

Malaysia’s Pharmaceutical Gap: The Push for Security

Malaysia presents a paradox common in the region: it is a manufacturing powerhouse that relies heavily on others for its own medicine. Sharvin A. Subramaniam, General Manager of the Malaysian Organization of Pharmaceutical Industries (MOPI), revealed a staggering trade imbalance.

“In 2024, we imported almost 3 billion USD worth of pharmaceuticals, but we only exported 0.7% of them,” Subramaniam disclosed.

He explained that this gap represented a national security risk. To close it, Malaysia prioritized “National Essential Medicines”—lists of drugs that must be produced locally to ensure the country isn’t cut off during a crisis. Subramaniam highlighted that the government offered direct negotiation for companies willing to manufacture these essential products onshore. Furthermore, he noted this fed into the “ASEAN Drug Resilience” initiative, where Southeast Asian nations agreed to support each other’s supply chains rather than compete, creating a unified regional market.

A Local Regulatory Fast Track

To make this industrial pivot feasible, however, the country recognized it had to dismantle a common regional barrier: bureaucracy. Gertrude Ting Hie Yieng, Treasurer of the Malaysia Medical Device Association (MMDA), noted that the new CEO of the Medical Device Authority came on board with a “very aggressive” mandate to cut red tape.

“Our kind of aim is to look at in terms of getting product registration: within one month,” Ting stated, specifically targeting Class A and Class B devices.

This targeted approach focused on the high-volume foundation of the medical supply chain. In the standard risk-based classification system, Class A refers to low-risk items such as surgical instruments or bandages, while Class B covers low-to-moderate risk equipment like hypodermic needles. She explained that prioritization of these essential goods—rather than the complex, high-risk implants found in Class C or D—was not just a domestic convenience but a geopolitical strategy. For instance, she highlighted a recent agreement signed between Malaysia and Taiwan to establish a “speed track” allowing product registration within just three months. By slashing registration timelines from months to weeks, Malaysia signaled a competitive desire to clear supply chain bottlenecks and position itself as the most efficient entry point into the wider ASEAN market.

Indonesia: The Awakening Giant

If Malaysia focused on drugs, Indonesia overhauled its device sector. With the world’s fourth-largest population, the domestic market grew at double digits, outpacing its neighbors. Febie Yuriza Poetri, Vice Chairwoman of the Indonesia Medical Device Manufacturers Association (ASPAKI), described a massive industrial expansion.

She noted that before the pandemic, Indonesia had roughly 250 medical device manufacturers. Today, that number surged to around 800.

Poetri pointed to a shift from low-tech consumables to high-tech resilience. She cited major collaborations, such as Mindray partnering with local industry to produce devices domestically, and GE Healthcare collaborating to launch Indonesia’s first locally produced CT scan in 2026. The message was clear: the Indonesian market remained open, but the preference shifted toward partners who built in Indonesia, not just shipped to it.

Australia: The Software and AI Frontier

While Southeast Asia built hardware capacity, Australia navigated the intangible complexities of software and AI. Emma Hossack, CEO of the Medical Software Industry Association (MSIA), painted a picture of a sophisticated but complex market where 60% of healthcare is private and payments are key.

Hossack warned that in Australia, if software did not integrate with the payment systems (Medicare and private insurance), it would not sell. “If you don’t know that, you really can’t risk investing,” she cautioned.

She noted that Australia recently announced a more open stance on AI regulation to avoid stifling investment. However, she explained that the industry didn’t wait for the government; they launched a voluntary AI code of conduct to establish trust immediately. Hossack invited collaboration but noted that while Australia excelled in efficiency, it trailed markets like Taiwan in robotics and high-tech hardware, creating a clear opportunity for cross-border partnership.

The Philippines: Breaking the Import Addiction

The Philippines represented the most acute example of the region’s import dependency. Luis Ramon Rodriguez, President of the Medical Device Association of the Philippines, shared a sobering statistic: the country was 99.2% import-dependent.

“In fact, there are some companies in the Philippines who manufacture some medical products but have to be shipped back to Japan who owns the company… It never comes back,” Rodriguez explained regarding the manufacturing ecosystem. He clarified that under the current system, goods made in the Philippines by foreign entities are often exported for rebranding, only to be sold back to the Philippines as “imported” products, creating a redundant loop that fails to benefit the domestic supply chain.

To fix this, Rodriguez envisioned the Philippines breaking its addiction to imports by aggressively pursuing Universal Health Care (UHC). He promoted an “economic zone” model for OEM and ODM assembly, arguing that the Philippines should serve not just as a consumer, but as an assembly hub for foreign companies, utilizing local labor to build the devices that the UHC system desperately needed.

Rodriguez noted that this manufacturing shift was integral to the wider ecosystem, where the Department of Health and the Philippine Economic Zone Authority (PEZA) were actively collaborating to streamline entry for these critical technologies. The goal, he explained, was to equip the expanding primary care network and upgrade diagnostic facilities to ensure “no one will be left behind” under the new insurance mandates. To practically bridge the gap for foreign entrants, he highlighted that his organization established the “Philippine Medical Depot” in Quezon City—a permanent 1,000-square-meter exhibition space allowing international companies to showcase their technology year-round, rather than relying solely on temporary trade shows.

Regional Resilience Over Reliance

The connecting thread across these diverse markets—from Jakarta to Sydney—was a rejection of passive reliance on global supply chains. Whether it was Malaysia’s drug security, Indonesia’s localized CT scanners, or Australia’s AI governance, the speakers demonstrated that the region is actively building its own infrastructure. For global companies, the door remains open, but the terms changed: the region now seeks partners willing to co-create, locate, and build the future of health within their borders.

Author

Bernice Lottering

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