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Amid a general slowdown of the global pharmaceutical market, pharmerging markets continue to be a formidable engine of growth; across Asia, Africa and South America, these markets are boasting a CAGR of 10-14%. At the outer edges of these growing economies are markets identified by IMS Health as “Frontier Markets” – the next big drivers of growth, opportunity and even innovation.
Among the Frontier Markets, Myanmar is capturing the most attention. With the completion of parliamentary elections in early November of 2015, there are positive signs that the momentum for change and market liberalization will accelerate. Indeed, Myanmar resembles the early days of some of today’s leading Asian developing markets such as Vietnam and Indonesia. However, while understanding the similarities is certainly valuable, the temptation to merely duplicate entry strategies and market assumptions should be resisted. Myanmar’s underinvested healthcare infrastructure, sizeable talent gaps, and significant regulatory and affordability hurdles, require an informed approach, and managed expectations. Multinationals will be challenged to re-evaluate what it takes to play, and what it means to win in both the short and long term.
Understanding opportunity in Myanmar’s healthcare market
Myanmar in Transition
Amid a general slowdown of the global pharmaceutical market, pharmerging markets
continue to be a formidable engine of growth; across Asia, Africa and South America,
these markets are boasting a CAGR of 10-14%. At the outer edges of these growing
economies are markets identified by IMS Health as “Frontier Markets” – the next big
drivers of growth, opportunity and even innovation.
Among the Frontier Markets, Myanmar is capturing the most attention. With the
completion of parliamentary elections in early November of 2015, there are positive
signs that the momentum for change and market liberalization will accelerate. Indeed,
Myanmar resembles the early days of some of today’s leading Asian developing
markets such as Vietnam and Indonesia. However, while understanding the
similarities is certainly valuable, the temptation to merely duplicate entry strategies
and market assumptions should be resisted. Myanmar’s underinvested healthcare
infrastructure, sizeable talent gaps, and significant regulatory and affordability
hurdles, require an informed approach, and managed expectations. Multinationals
will be challenged to re-evaluate what it takes to play, and what it means to win in
both the short and long term.
As Myanmar embraces a market economy, the country is gradually gaining ground. GDP and life
expectancy have both grown steadily, with salaries, disposable income and economic opportunities
all on the rise. For foreign investors, signs of economic and political reform are generating confidence
in continued growth and market expansion. Indeed, there appears to be only one direction to go –
However, this growth will be organic and prolonged. In healthcare in particular, a historical lack of
investment has resulted in low levels of health personnel and infrastructure relative to population.
This has, in turn, led to a significant health burden. According to the World Health Organization, for
example, Myanmar suffers some of Asia’s highest rates of childhood malnutrition and under-five
mortality (56,000 deaths per year), and high (though improving) maternal mortality (200 per 100,000
Moreover, from both a social and regulatory perspective, Myanmar is still struggling to embrace
the transparency and accountability that were conspicuously absent in the past. Since the country
currently ranks high on the Transparency International corruption scale, conservative caution will be
necessary to ensure compliant, and sustainable, business growth.1
“Myanmar has embarked on a relatively swift and pronounced politico-economic change of direction.
The examples of countries that have followed similar paths of transformation over the last 30 years
should inform a sense of optimism as well as caution”, confirms Tim Walton, Senior Principal, Asia
Emerging Markets, IMS Health.
To proactively manage and encourage growth, the government has implemented a range of reforms
since 2008 to support both public and private contribution to the burgeoning economy. These reforms
have taken place over three “waves,” the last of which places specific emphasis on a higher standard
of living and development that “directly improves the wellbeing of the people.”2
Myanmar: A Positive Outlook
Score of 21 on a scale of 0-100; 0=highly corrupt. Transparency International, Corruption Perception Index 2014
Ministry of Health, Health in Myanmar 2014, p9 – www.moh.gov.mm
Organized for Outcomes
It is within the Third Wave Reform that
Myanmar’s healthcare industry is taking
shape. Recognizing the clear link between
a strong healthcare system and national
progress, Myanmar’s Union Minister for
Health identified “health [as] the hub of
Indeed, as the
political and social environment has stabilized
over the past five years, government spending
on healthcare has concurrently increased
(see Fig 1). However, a comparison to other
markets in Southeast Asia (SEA), where
spending as a percentage of GDP is typically at
3-4%, demonstrates that the current baseline
is extremely low.4
Profound and long term
political and financial commitments will
be required in order to affect real change
and improve the country’s healthcare
infrastructure, availability and access models.
An increase in government spending, together with direct investment from regional players and
pioneering multinationals (MNCs), has led to significant growth of the healthcare market in recent
years; the pharmaceutical market alone is forecast to reach US$1 billion by 2018. This growth will be
driven by three key factors:
1. The mix of public and private investment. Myanmar’s healthcare sector is financed and
serviced by both governmental and private systems. Politically, there are two significant bodies
driving the governance, regulation, investment and operations of healthcare in Myanmar: The
Ministry of Health (MOH), which serves as the high level governing function and which executes
the National Comprehensive Development Plan (NCDP); and the Department of Health (DOH), a
subset of the MOH, and the main regulatory body for providers, pharmaceuticals, medical devices,
and capital investment. Central to this public-private system is the Myanmar Medical
Association (MMA) which facilitates cooperation between providers, and ensures that private
practitioners are integrated into public healthcare activities.
Private enterprises are currently focused primarily on ambulatory care, though there has
been a recent increase in both private hospitals and investments in diagnostic and medical
device equipment. It must be anticipated that Myanmar’s public health system will struggle
with growth and funding priorities over the next several years, and that some gaps will be filled
by private healthcare players. In the longer term, the adoption of a Foreign Direct Investment
Law, the removal of international sanctions, and a positive outcome from the 2015 elections
ensures that Myanmar is poised to experience rapid economic growth which will have positive
implications for investment in its health services.
A Young, But Promising, Healthcare Market
Fig.1 Healthcare expenditure in Myanmar 2010-2015
Health in Myanmar, introduction
WHO, World Health Statistics 2014
Healthcare spending as a % of GDP
Healthcare spending as a % of overall govt expenditure
2012-20132011-2012 2013-2014 2014-2015
2. A vision of universal healthcare (UHC) and the growth of a consuming class. The NCDP espouses
a vision to build UHC and an effective and equitable health system. This represents a long term
journey along the three dimensions of UHC – population coverage, service delivery and financial
protection. The priorities for development, as outlined by the MOH in 2012, address the first
two dimensions: First, to strengthen access and referrals to points of care, specifically primary
care, at the township level; and second to build an Essential Medicine program and ensure
generic-quality medicines from this list are available at all levels of facilities.5
From a financial
protection perspective, a new health insurance scheme was introduced in July 2015, but uptake
has been low, with less than 2,000 applications.
Today, out of pocket (OOP) healthcare spending accounts for the vast majority (80%) of funding for
services. This makes even basic care cost-prohibitive for many of Myanmar’s poorest citizens,
especially those in outlying or marginalized areas.6
However, the country’s consuming class is
expected to grow from 2.5 million in 2010 to 19 million by 2030.7
It is this growth at the middle
of the population pyramid that will ultimately drive pharmaceutical product sales in the short
term, enabled by improved access to points of care.
3. Investments in high-need, high-impact therapy areas. Health indicators in Myanmar
demonstrate that opportunities for intervention by healthcare players are numerous. IMS
Health has conducted market assessments across several communicable and non-
communicable disease (NCD) areas and has identified key under- or un-served market
opportunities. With the recent expansion in urban living, NCDs, notably cardiovascular,
cancers, respiratory, diabetes and other chronic diseases, are now estimated to account for 59%
of all deaths. Communicable diseases, in particular tuberculosis, HIV/AIDS and malaria also
represent high areas of burden with opportunities for both prevention and treatment. To date,
the MOH has been proactive in developing national programs for some of the most critical
disease areas in partnership with international donor organizations. However, there is still
significant space for partnership and investment in these therapy areas.
These levers create an alluring picture of untapped
potential for MNCs, who are captivated by the
opportunity to take an early-mover advantage,
establish a presence in a significant Frontier
Market, and play a role in bringing better health
outcomes to a population with significant need.
Again, this picture must be set in the context of
appropriately-managed expectations. Companies
wanting to take a position in Myanmar today
must do so with a long-term strategic vision and
an understanding that a significant ROI can only
be the result of sustained investment over an
extended planning cycle.
Health Systems in Transition, The Republic of the Union of Myanmar: Health System Review, Vol 4. No 3. 2014, p 69
Health Systems, p 61
McKinsey Global Institute. “Myanmar’s Moment: Unique opportunities, major challenges.” June 2013
Enthusiasm, therefore, needs to be tempered by an informed understanding of the market’s
significant challenges. Through its operations in Myanmar, and extensive discussions with clients
and partners in the region, IMS Health has identified four critical barriers for MNCs:
An under-funded and over-burdened healthcare infrastructure
An insufficient talent pool (on both the corporate and provider level) that is inexperienced at
best, nonexistent at worst
A work-in-progress regulatory environment that is difficult (and potentially costly) to navigate
High affordability hurdles
While the overall trend of government spending on healthcare is on the rise, current levels are still
inadequate to meet demand. As a result, much of the burden of financing, building and improving
healthcare facilities falls to local communities, especially in rural and sub-rural areas.
Increased funding, however, only addresses part of the story. Myanmar’s healthcare infrastructure
is spread over a broad network of hospitals, health centers and other points-of-care with varying
degrees of capability. Within these physical structures, there are also significant gaps in quality and
functionality. Understanding the hierarchy of access points, and the conditions therein, is a necessary
first step in developing a holistic view of the healthcare landscape.
Points of care
Healthcare delivery in Myanmar ranges from sub-rural health centers, largely focused on ambulatory
and primary care, to urban tertiary centers of expertise:
Preparing For An Uphill Climb
Note: This figure does not include military hospitals. In 2007, there were 29 military hospitals and 14 field medical battalions across Myanmar.
Tertiary level Urban hospital (Yangon,
Mandalay, Nay Pyi Taw
· 20 disciplines
· Intensive care
Sub-rural health center
· Basic health staff
· General primary care
· Primary/general care
· Specialty disciplines: anesthesia,
orthopedic, eye, dental, pathology
· Aux/admin services
· General medicine, surgery, ob, gynaecology, pediatric
For a population of just over 51 million people, there are a total of 827 primary care hospitals, 81
secondary care hospitals and 36 tertiary centers.8
And while Myanmar’s ratio of hospital beds per 1000
people (.06 in 2010) is low, there have been significant improvements over the past decade; a 17.4%
increase in public MOH hospitals and a 12.6% increase in RHCs from 2004 to 2013.9
However, the vast majority of the country’s rural poor population is without access to these facilities,
either due to cost or geography. Furthermore, many hospitals, especially at the primary/rural level,
are without necessary ancillary services or technologies, such as lab facilities or diagnostic imaging.
Certainly the discrepancy in capacity and capability between the rural and urban points of care must
be addressed if equity in healthcare is to be improved.
It should be noted that significantly increasing the absolute investment in infrastructure through the
domestic tax-base will be a long battle. The informal employment sector and low incomes dominate,
suggesting that investment dollars will have to come from elsewhere – either the private sector or
international donor organizations.
Compounding the shortage of facilities are
substandard conditions. Buildings – even private
clinics – often lack basic functions such as
constant electricity and water supply which can
result in unhygienic environments. Drug storage
is in a similarly rudimentary state, with limited
cold chain refrigeration, frequent power outages
and open, disorganized shelves. The wholesale
markets, it should be noted, do not offer
significant improvements, and employ stock
control/management systems that are chaotic
Improving the healthcare infrastructure in
Myanmar is, and will be, in large part at the
discretion of the MOH. Looking ahead, it is also
likely that these necessary capital investments
– public and private – will be allocated via a
“bottom-up” approach, according to the needs of
National census, 2014; Health systems
Health Systems, p 80
Aside from the infrastructure gaps, sufficient human resources for healthcare is cited as the greatest
challenge, and thus highest priority, for incoming pharmaceutical companies. The lack of a qualified
talent pool can be found at both the corporate/commercial level, as well as at the healthcare provider
(HCP) level. “The talent gap is the inevitable consequence of a society that has lived under isolation and
sanctions for so many years,” explains Mr. Walton. “Having a people strategy that transfers knowledge
and develops talent will be key to long term growth.”
Corporate/commercial talent gaps
Upon entering Myanmar, multinational companies will find that employees in the healthcare sector
have thus far operated with little to no regulations or systematic guidelines, and have no experience
with the sophisticated HR, finance or even (notably) pharmacovigilance functions of a multinational
company. And while local talent has demonstrated to be both willing and able to embrace a more
structured corporate model, the lack of formal training and the need for guidance will be a hurdle to
generating short-term momentum.
Moreover, such a small pool of experienced and qualified candidates inevitably leads to a “war for
talent” among new investors. According to one MNC pharma executive “this is a common phenomenon
in developing economies and can only be avoided if we train our people sufficiently enough that they are
empowered to leave us, but look after them well enough that they never want to.”
Furthermore, as Myanmar embraces a market economy, companies can expect a shift from a purely
distributor-based model to a more modern, sophisticated pharma sales model. As a result, a particular
area of focus and investment should be Medical Representatives who can take on a dual role of
educating and selling to HCPs (physicians and pharmacists).
Healthcare practitioner talent gaps
Of around 20,000 licensed medical doctors
nationwide, IMS Health’s latest estimate is
that the prescription market is driven by 4,000
qualified and practicing physicians across 7
urban areas. The significant majority (80%)
is concentrated in Yangon and Mandalay (See
Fig 2). And while the overall number of HCPs
(including nurses and midwives) has been
steadily increasing since the early 2000s, it has
not yet reached the global standard of 2.28 per
Initial training for medical professionals is
standardized by the MOH Department of Medical
Science, with a number of medical universities
and post-graduate programs offering degrees
in a range of specialties. However, in practice,
providers are primarily focused on internal
Health Systems, p 78
Source: IMS Health primary research 2015
Nay Pyi Taw
Fig. 2 Practicing physicians by urban area
medicine, with little-to-no continuing education or hands-on specialty experience. This lack of
specialty expertise places an enormous burden on internal medicine physicians, who often treat
patients above and beyond their capability set.
According to the latest IMS Health census estimates, there are only 800 specialists in total
nationwide. This represents a significant challenge to diagnosis and treatment across multiple
therapy areas. Pharmaceutical companies investing in the market should therefore recognize the
access and prescription barriers, but also seek opportunities to increase knowledge, capability and
specialist understanding within the prescriber base.
Lack of medical knowledge in Myanmar is a function of both distance and necessity. Doctors have
been, until recently, almost completely disconnected from the global medical community; internet
access is subpar, and travel outside Myanmar had been restricted. This has resulted in a pervasive lack
of awareness about new products, treatment protocols and disease pathways. But the root cause is
largely economic – for a doctor to earn sufficient money, volume and consultations must take priority
over new products or specialty patients. It can be expected that as the healthcare sector evolves under
a market economy, physician behavior will become more profit-oriented. Therefore, safeguarding
a positive doctor-patient relationship, and cultivating both trust and transparency will be critical
priorities as this talent pool matures.
As with many emerging economies, and especially those transitioning to a market economy,
Myanmar’s regulatory framework is both time-consuming and costly to navigate. For pharma
companies, the greatest challenge will be unmonitored distribution practices, particularly the
unofficial flow of medicines across the border, and the lack of consistency and government
transparency in tendering and registration policies. Together, these factors will force MNCs to re-
evaluate both their priorities and their processes.
Independent retail pharmacies are the dominant distribution channel for medicines in Myanmar.
These outlets are operated by pharmacists who, for all intents and purposes, serve as physicians,
managing both diagnosis and distribution. The lack of regulation over who distributes drugs,
and where, has led doctors to operate in a similarly autonomous fashion, even from within the
hospital. The repercussions for pharma companies is a distribution system that is both disorganized
and unregulated, and therefore extremely challenging to approach; even standard price-volume
advantages at the institutional level are hard to achieve. Nevertheless, understanding the pharmacy
as the primary point of entry will be essential in building a real picture of market potential.
With only 4% of Myanmar’s population considered part of the “consuming class,” affordability is
a significant bottleneck to market growth.11
Today, the majority of Myanmar citizens are poor, with
extremely limited access – geographic and financial – to even the most basic healthcare services.
Geographically, as discussed, the services closest to most people are confined to basic or emergency
care. For specialty treatment, expertise and facilities are both prohibitively far away. Financially, as
the bulk of expenses must be paid out of pocket, cost tends to drive decisions about where, and how,
to be treated (if at all).
Health in Myanmar, introduction
Incoming companies will therefore be tasked with developing a deliberate price/volume strategy
that focuses more on access than profit in the short term. Fortunately, the landscape is shifting – as
national health insurance and social protection policies gain ground, citizens will have increased
flexibility to invest in their own health.
On the other side of the affordability spectrum, Myanmar is losing significant patient numbers
from the top of the pyramid to nearby countries such as Thailand, India and Singapore, especially
for complex and expensive treatments such as oncology or transplants. Such out-bound ‘medical
tourism’ poses an obvious challenge (and opportunity) for Myanmar’s domestic healthcare industry
and pharma companies, who must work hard to retain this “willing-to-pay” population, and to
ensure adequate provision for after-care.
Ultimately, MNCs will need to develop educated strategies that both respond to Myanmar’s current
environment, and anticipate a more long-term investment. They will also need to embrace the reality
of what success might look like for their bottom line – there is currently a small pie to share. And
while an underlying challenge in such a unique market is that “best practice” doesn’t always apply,
certain strategies will be core to any successful, and sustainable, approach:
1. Build a tailored portfolio
Already, Myanmar is becoming a crowded marketplace in some areas; opportunity is there,
but must be captured swiftly and strategically. At one end of the spectrum, low cost products
(e.g. antibiotics) carry high volume potential. But competition is already steep in these
highly genericized and fragmented markets. At the other end, small but profitable niche
markets (e.g. oncology, hepatitis) may offer high returns, but also low volumes that require
significant education investment and a thorough pre-launch understanding of patient populations.
To succeed, incoming pharma MNCs will need to thoughtfully choose a road. Primary care
portfolios may need to enter with a larger basket of brands to maximize efficiencies in
promotional spend, a qualified sales team, and a willingness to expand beyond the two main urban
areas. These strategies will require less investment in infrastructure, but perhaps more
advanced brand planning to understand unmet need and pockets of opportunity.
Specialty portfolios should focus on differentiated therapy areas, and transforming or
establishing a targeted market. Such an approach may yield high returns, but only if there is
a large enough affordable patient population to justify the investment. The successful investor
will focus on building new markets through innovation rather than competing in a small market
Either strategy will need to address the challenges presented above, and manage internal
expectations around short and long term returns accordingly.
2. Invest in people
Clearly a high area of need, and opportunity, is Myanmar’s human capital. As discussed, this
need falls into two categories: corporate talent and healthcare providers. There is, however, a
third area of opportunity that should be considered in support of a long term commitment –
patient education and empowerment.
Playing To Win
Build a tailored portfolio
Invest in people Success in Myanmar
Cultivate a network
For corporate talent, the most important investment is training and development. This,
however, is not a job to be done remotely. Recruitment, training and ongoing development must
be done on the ground so as to develop a mutual understanding of culture, expectations and
A focus on training is also paramount for the healthcare provider population, most of whom
have little to no experience with continuing medical education, or even have up to date diagnostic
training. As with corporate talent, this development will need to be focused and continual.
It should also take place in a variety of settings, including at the point of care, and at measured
intervals. A better educated, more informed provider population will be a critical catalyst for
driving uptake and sustainable adoption of medicines, especially for newer or lesser known
disease areas. As a telling example, one pharma executive revealed that many primary care
physicians do not know how to diagnose diabetes, nor have they had any experience
Patients represent a powerful opportunity for pharma companies to round out their footprint
in Myanmar. To date, very little has been done to support or educate patients, as there is
often an ethical hesitation to communicate directly with patients. However, through healthcare
professionals, associations and other community networks, pharma companies can use patient
education as a complement to more traditional people investments.
3. Cultivate a network
As with many markets in this region, the ability and willingness to connect and collaborate with
local stakeholders and known key opinion leads (KOLs) is extremely valuable. Particularly in areas
that require extensive education and awareness campaigns, developing strong relationships and
constant contact with doctors and government leaders can critically boost adoption.
This is especially true among the provider community. In Myanmar, which is highly
hierarchical, doctors are placed at the top, alongside religious and military figures. As such,
they occupy significant positions of authority and influence within both professional and
community circles. Tapping into this structure through an informed KOL strategy, therefore,
will be extremely important in establishing necessary brand equity to drive longer-term ROI.
Myanmar presents a plethora of exciting opportunities for the global pharma community; such an
untapped market is both rare and short-lived. Positive growth projections, a stable political and
economic base reinforced by recent democratic elections, and a growing consumer class are creating
an almost overwhelming amount of enthusiasm. However, such enthusiasm should be eased by due
diligence and perhaps reduced to a point of cautious, or at least realistic, optimism.
Successful market entry in Myanmar will be built on an informed approach that thoughtfully
addresses and prioritizes the country’s fundamental infrastructure, talent, regulatory and
affordability challenges. Winning will also be contingent on how well companies manage their
expectations, and define their area of play.