The ongoing COVID-19 global pandemic continues to starkly mark the challenges in digital healthcare in the Asia Pacific region: regulatory fragmentation, competing priorities and knowledge gaps are all currently creating impediments to the much needed development of digital healthcare. That is according to a new report, Hyper-Hybridity: Defining a New Era of Digital Health Innovation in Asia Pacific, which compares and consolidates the views of key players within the Asia Pacific digital health ecosystem; namely healthcare & life sciences (HLS), technology (tech) and financial companies.

The research, which includes a survey of 750 healthcare and life sciences, tech and finance executives (of which Singapore had a sample size of 150 respondents), found there were five key drivers of digital health acceleration in Asia Pacific today:

1. Disruption to traditional healthcare delivery and management arising from COVID-19
2. Advances in digital health technology
3. Cost pressure in healthcare systems
4. Perception of the healthcare sector as a “safe haven” for investment amid economic downturn
5. Requirement to provide personalized patient care

Key findings indicate misalignments in agenda among industry players and an urgent need to rethink how innovation is organised and funded

The research also found that while industry players from the different groups were prioritizing the development of digital health, were experiencing rising market pressure to build new solutions and systems, and had ranked clinical trial administration as a high priority area, their priorities quickly diverged when looking across other categories of digital health (see chart above).

Differing priorities between industry players put a spotlight on the misalignment of competing agendas. This sentiment is amplified by the consensus that 74% agree that greater collaboration across the healthcare ecosystem would significantly accelerate progress.

In fact, 78% of healthcare & life sciences companies report concerns that technology organizations push a more commercial agenda over healthcare excellence, while 71% of technology players indicate that healthcare companies often lack the tech know-how to operationalise new solutions.

As a result, 72% of those surveyed across all groups believe a radical rethink of how innovation is organised, funded and scaled is required to meet demand for new solutions. The complex, highly regulated nature of the healthcare ecosystem by governments and misalignment between organizations' business interests are also barriers to accelerating innovation.

Singapore cited as investment hub for digital health innovation and development

Investors surveyed for this report intend to direct USD 22 billion of new global funding into digital health innovation. While deal flow data shows digital health VC deals in Asia Pacific largely centered on the major population centers of China, South Korea, India and Japan, 62% of survey respondents cited Singapore as their top destination in the region for intended new investment and development in digital health, followed by Australia (56%).

In fact, 87% of Singapore respondents say that they will invest domestically, of which the priority to invest or collaborate are with healthtech companies, followed by interest in medtech, biotech and healthcare services. Two foreign investor groups stood out: 70% of UK and European respondents, as well as 68% of Thai respondents also said that they will be looking for investment opportunities in Singapore's digital health sector.
Despite 72% of digital health players believing that government intervention can in fact be counterproductive to their efforts to innovate, the fast growing interest in Singapore does suggest that grants, incubators and incentives aggressively introduced by the Singapore Government to attract digital health investments are shifting the dial. This approach also has the potential for developing economies to leapfrog some of the more traditional healthcare hubs through digitalization.

Urgency for regulatory harmonisation in APAC crucial for healthcare players to minimise risk 

Ren Jun Lim, Principal in the IP practice at Baker McKenzie Wong & Leow (the Singapore member firm of Baker McKenzie) who has a practice focus on healthcare and life sciences, said that governments could also play a major role in supporting the sector through working towards regulatory harmonisation across jurisdictions.

"Regulatory divergence across the Asia Pacific region increases the complexity of the cross-jurisdictional collaboration. There is a lack of harmonisation across both the digital and healthcare regulation, leaving organisations to interpret how far existing healthcare legislation applies to the digital context on a market-by-market basis, and a lack of a comprehensive approach to manage risk. Enforcement of regulation is similarly fragmented."

He adds: "There is political and practical interest in reaching consensus on these issues. The frameworks and regulations relating to software as a medical device may be a useful place to start. There is already a certain degree of similarity and shared goals in relation to digital health software across Asia Pacific, and robust standards in Singapore and Australia that could be considered for localisation and implementation in other countries in the region."

"While digital health is accelerating in spite of regulatory complexity, harmonisation can provide a confident basis for greater investment and innovation. If regulation was designed to support cross-jurisdictional, cross-industry collaboration, we would expect to see digital health innovation accelerate by a huge order of magnitude," said Ren Jun.

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