Bangkok is well positioned to benefit from the burgeoning life sciences industry in APAC. It will rise in prominence as a strategic location for start-ups as well as an attractive destination for investment. Several factors present the Thai capital as an ideal choice.
Medical tourism
Thailand is a world-renowned destination for medical tourism, owing to its affordable, high-quality healthcare and world-class private hospitals. Its economy is largely tourism-driven, and a significant portion of visitation can be attributed to individuals seeking healthcare, and this is expected to continue growing.
Pre-COVID tourist numbers reached a peak of 40 million, and the Tourism Authority of Thailand (TAT) is bullish over a swift return to former highs, targeting 35 million this year. TAT’s confidence in this number has strengthened considering the government’s recent temporary visa exemption for China, Kazakhstan, Russia, India and Taiwan. Such measures have already had a material impact, with January registering 3 million tourists. A range of further inducements are also under consideration, such as extensions of stay and multiple entries.
Strong demographic shifts
Thailand’s 72 million populace is ageing. In fact, the 75+ cohort has expanded by over 300% since the turn of the century. These secular societal changes are increasing the prevalence of age-related, non-communicable diseases, notably diabetes and cancer. Therefore, patient demand for such healthcare is expected to be sustainable, sparking increasing requirements for efficacious biopharmaceutical drug treatments.
Socioeconomic shifts are also evident. A rise in disposable income has empowered consumers to increase discretionary spending. Moreover, against the backdrop of the recent pandemic and the fast-expanding older adult cohort, health and well-being is front of mind. Many consumers are increasingly allocating more discretionary spend on healthcare products and services. Categories such as consumer health, active nutrition, and medical nutrition are notable beneficiaries of this trend.
Well-developed healthcare system
Beyond urban centres, the government has invested heavily in providing more extensive healthcare, based on the concept of Area Health (AH). The AH scheme consists of one area covering six provinces, enhancing equitability of access. Moreover, OTC medication via pharmacy is widely preferred for its convenience and comprises around 20% of the total pharmaceutical market in Thailand. With the high patent cliff expected over the next few years, there are opportunities for new generic entrants, adding octane to domestic drug production.
Supportive policy environment
The Thai government has introduced several measures over recent years to transition its economic model towards innovation, creating a roadmap for its ‘Thailand 4.0’ vision. Several industries have been identified that will spearhead growth, with life sciences playing a pivotal role.
Thailand’s Board of Investment (BOI) has set objectives to promote both domestic and overseas investment to boost international competitiveness. Its investment promotion policy focuses on R&D, innovation and value creation for targeted industries that fit its desired criteria. Moreover, investment is incentivised through a series of tax and non-tax measures, such as the exemption/reduction of import duties on machinery and materials in addition to the right to welcome skilled foreign workers.
Advanced R&D infrastructure
Thailand Science Park (TSP) is a 300,000-sqm innovation hub which hosts 120 companies, 5 national research centres and 3,000 R&D personnel. It offers a fully integrated ecosystem of industry experts, government agencies, and educational institutions to provide a conducive environment for the advancement of innovation and technology.
The myriad factors outlined bode well for long-term growth. Targeted incentives around talent and equipment facilitate further expansion of R&D in major growth segments, such as health tech, vaccines, biopharmaceuticals, and wellness tourism. Overall, Thailand’s life sciences landscape is evolving and is increasingly becoming more internationally competitive.
