Commercial outsourcing: the rising trend in healthcare

According to the most recent survey of healthcare decision-makers in Asia by Bangkok-based research group Be Digital (powered by DKSH), titled “Route to Market: Commercial Outsourcing as a Business Growth Strategy for Healthcare in Asia Pacific”, 69 per cent of respondents views outsourcing mainly as an opportunity to expand geographical coverage in some markets, 60 per cent would like to expand into new markets, and 50 per cent would consider outsourcing to drive sales of strategic products.

Commercial outsourcing requirements in the healthcare industry show strong growth in Asia and Vietnam, photo Le Toan

Three key services are considered by healthcare firms for outsourcing. The first involve pharmacy channels and, according to the survey, the role of pharmacists is expected to evolve beyond the basic services of merely providing prescription medicines.

The second includes medical channels. The coronavirus pandemic has pushed pharmaceutical products and medical devices into new territories as the demand for related medicines, test kits, and vaccines continues to grow.

To meet this rising demand, pharmaceutical companies and medical device manufacturers prefer to outsource their marketing activities to hospitals and clinics when entering or expanding into a market.

The third involves omnichannel e-commerce services. The coronavirus has led to growth in the e-commerce sector across most business sectors, especially in healthcare. According to the Healthcare eCommerce Global Market Report 2022 published by Report Linker, the global healthcare market grew from $261 billion in 2021 to over $309 billion in 2022. The market is expected to exceed $613 billion in 2026.

The e-commerce healthcare market includes digital sales and marketing of consumer products and services. As omnichannel e-commerce is becoming more sophisticated and complex, healthcare companies tend to work with a professional outsourcing partner that can provide omnichannel e-commerce support.

Along with Thailand and Malaysia, Vietnam is one of the top three markets considered by commercial outsourcing services, with high potential for many businesses looking for growth. According to Fitch Solutions, healthcare spending in Vietnam is expected to reach $23 billion by the end of 2022, while BMI Research’s most recent report on the subject also shows that the healthcare industry can reach $16.1 billion in size by 2026.

Decision-makers in multinationals surveyed in the Be Digital report stated their main reason to work with commercial outsourcing partners: companies want to grow rapidly while maintaining focus on their core competencies like product development. More than ever, companies need to assess their core strengths and determine where to focus their resources and where they would be better served to leverage a strategic business partner.

Bijay Singh, head of Business Unit Healthcare and member of the executive committee at DKSH, told VIR, “We have seen strong growth in commercial outsourcing requirements in the healthcare industry in Asia and Vietnam, particularly. We’re happy to support in connecting manufacturers and local partners to help bring important healthcare essentials to every corner of Asia and beyond.”

According to the survey, the key challenges for pharma and medical device companies that slow their growth in the Asia-Pacific market involve pricing pressures, sales force effectiveness, and lack of market presence. Often, these challenges can be addressed by working with a partner with the right skill set of commercial outsourcing services.

Of the healthcare decision-makers (within brand-owning companies) who were surveyed, 56 per cent plan to maintain the outsourcing of commercial activities to a third party, while 35 per cent plan to increase their outsourcing activities in the upcoming 12 months. This implies that more companies see value in commercial outsourcing as an important part of their growth strategy.

“Commercial outsourcing is projected to grow more significantly in the years to come, to adapt to changes and growing demands in the market. Soon, these services are forecast to be essential to every business in this industry,” Singh added.

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