Cambodia: A Future Emerging Pharmaceutical Market

A country of 15 million people, Cambodia’s 2013 GDP was about $15.5 billion with growth around 7%. As the Cambodian economy develops, healthcare spending has been expanding throughout the country. Though still smaller and more difficult to do business in than many of its neighbors, Cambodia’s medical market is on a positive trajectory that should soon attract more attention from Western medical device and pharmaceutical companies.

While communicable diseases like tuberculosis and malaria are still the primary cause of death, Western diseases like hypertension and diabetes are increasingly prevalent. Over the past ten years, infectious disease rates have fallen significantly with increasingly high rates of immunization and national disease control programs. In fact, Cambodia had a year-on-year 60% drop in cases of dengue fever in 2013.

The healthcare market in Cambodia will be worth close to $1 billion in 2015, including a pharmaceuticals market valued at $210 million with double-digit growth. Healthcare spending per-capita was almost $60 in 2013. Drug product registration follows ASEAN requirements, is relatively inexpensive and takes only a year. There are no government controls or reimbursement systems for drugs. Almost 80% of pharmaceutical sales are in Phnom Penh and the surrounding region, making distribution relatively simple.

Approximately 55% of the pharmaceutical market is composed of imports, and there is significant local preference for foreign medicines. Foreign institutions have started to take note. Pharmaceutical giant Sanofi has a presence in all of Cambodia’s 24 provinces. Last December, Japan and Cambodia signed a memorandum of understanding on Japanese provision of sophisticated medical systems. Japan will support the construction of a state-of-the-art critical care and emergency hospital in Phnom Penh starting in 2015.

Of course, many problems remain for foreign companies wishing to do business in Cambodia — such as corruption, insufficient infrastructure, pharmaceutical counterfeiting and unnecessary bureaucracy. However as Cambodia develops, Western medical product companies should keep an eye on the country’s increasing medical market opportunities.