Trends in Healthcare and Life Sciences
Health
and wellness are key components to the success of any society. Demographic and
economic changes, coupled with increased patient expectations, have led to an
exponential increase in the pace and scale with which health care innovations
are emerging and disrupting the healthcare sector worldwide.
New
entrants from outside the traditional business of healthcare are redefining the
$9.59 trillion global healthcare market for consumers, providers, payers, and
investors in both developed and developing nations [1].
In
addition, major global trends are increasing the need for healthcare services
globally. These include:
1.1 Aging Populations
People
worldwide are living longer. Between 2015 and 2050, the proportion of the world's population over 60 years of age will
nearly double from 12% to 22%. By 2020, the number of people aged 60 years
and older will outnumber children
younger than 5 years.2 While
some countries are aging more rapidly than others, all countries will face
major challenges to ensure that their health and social systems are ready for
this demographic shift.
Figure 1: Average Life Expectancy
1.2 Growth of Chronic Diseases
Chronic
diseases, also known as noncommunicable diseases (NCDs), affect people across
all age groups and regions. The main types of NCDs are cardiovascular diseases
(like heart attacks and stroke), cancers, chronic respiratory diseases (such as
chronic obstructive pulmonary disease and asthma) and diabetes. Globalization,
intensive urbanization, an increase in adoption of sedentary lifestyles and
population aging are all contributing to the widespread growth of chronic
diseases.
According to the World Health Organization,
NCDs kill 41 million people each year, equivalent to 71% of all deaths globally [3].
1.3 Air Pollution and Climate Change
91% of the world’s population lives in
places where air quality exceeds WHO guideline limits [4] and the problem is growing. Common air pollution related
diseases include stroke and heart disease, respiratory illnesses and cancers. A recent study indicated that air pollution
may even lead to an increase in mental health issues [5].
1.4 Accelerated Healthcare Spending
Global healthcare spending is forecast to
reach $8.7 trillion by 2020, compared to $7 trillion in 2015 [6]. This is attributed to spending increases on aging and
expanding populations, growing emerging markets expenditures, advancements in
medical technology, and rising labor costs.
Figure 2: Healthcare Spending, 2018 (% of GDP)
1.5 Lack of Human Resources
Healthcare systems throughout the world are dealing with a
shortage of human resources and an alarming depletion of skilled doctors,
nurses, and other healthcare professionals. According to the World Health Organization, by 2035, we face a
projected shortage of 12.9 million healthcare professionals globally [7].
Governments are looking for low-cost, efficient solutions to
reform healthcare and address these issues. Technological advancements are
changing the way consumers access and receive care and are thus a potential
solution to this resource problem.
1.6 Mobile Health (mHealth)
mHealth services are able to provide programs for remote
monitoring, e-prescriptions, fitness and wellness and electronic records. The
mobile health app market has been growing steadily over the last few years with
the adoption of new technologies, new business models and new workflows that
are transforming healthcare. With the prevalence of diabetes becoming a greater
problem in developed nations such as the United States, the potential to use
mHealth apps to help in diabetes care and prevention will be one of the main
therapy fields for mHealth app publishers.
The global mHealth app
market generated projected revenues of $28.32 billion in 2018, and is expected
to reach $102.35 billion by 2023, a CAGR of 29.30% [8].
1.7 Precision Healthcare
A remarkable paradigm shift is occurring in health practices
and outcomes that has given rise to a new era of precision healthcare. From 2017-2026, The market is expected to
grow at CAGR of 11.23%, aided by the adoption of early diagnosis, increased
number of adverse drug reactions cases, high prevalence of chronic diseases,
and advancements in genetic science [9].
New Technologies in Healthcare and Life Sciences
Based
on the trends listed above, a future in which healthcare delivery models are
aided by new technologies may help solve today’s problems while increasing
access, affordability, improving quality, and lowering costs. These
technologies help with diagnoses and improve treatment, speed, quality and
accuracy, thereby leading to better patient outcomes.
Based
on extensive research, Indxx has identified eight technologies as having the
high potential to disrupt the global healthcare industry over the next decade
and beyond:
2.1 Robotics
The
application of robotics in healthcare ranges from highly complex surgical
robots to nursing assistants, diagnostic robots and logistics. Advancements in
artificial intelligence, along with predictive analytics, are improving robotic
technology and making it capable of handling more tasks. The $3.4 billion acquisition of Auris Health by Johnson & Johnson
shows how lucrative the market for new surgical robotics can be [10].
The global medical robots market generated
approximately $6.62 billion of revenue in 2018, and is expected to grow to
$24.6 billion by 2025, a CAGR of 20.8% [11].
2.2 Nanotechnology
Nanotechnology
has the potential solve some of the most complex medical issues, such as
repairing damaged organs, diagnosing and treating cancer cells, removing
obstructions in the brain, and vastly improving drug delivery and targeting.
The application of nanotechology in the medical field is often termed
“nanomedicine” and includes the use of nanomaterials, nano-scale biological
devices, and nanoelectric biosensors to assist with diagnostics, analytical
tools and treatment therapies.
The global nanomedical market generated
$134.4 billion of revenue in 2016, and is projected to grow at a CAGR of 14.0%
from 2017 through 2022 [12].
2.3 Genome Sequencing
The global genomics market size is expected
to reach $27.6 billion by 2025 [13].
Genomic
tests and sequencing enable patients to learn their genetic risks for disease
and also help healthcare professionals to diagnose illnesses. Since 2001, the cost to sequence an entire
human genome has dropped by several orders of magnitude, from nearly $100
million per genome to slightly over $1,000 and is expected to continue to drop [14]. Because of this, genome-wide sequencing is now also being
applied to the analysis of circulating DNA in the plasma of cancer patients, as
well as in individuals with other diseases. The generation of a large amount of
sequencing data has led to significant growth of functional genomics and the
development of recombinant and genetically engineered products that could be
tailor-made for specific patients.
2.4 Healthcare Trackers
Health
trackers (e.g. Apple Watches, Fitbits, etc.) and apps provide insightful body
data that can go a long way in improving medical care and preventing illnesses.
In 2016, more than 1.9 billion adults
globally (18 years+), were overweight.15 The prevalence of
diabetes in adults was estimated to be 8.4% in 2017 and predicted to rise to
9.9% in 2045 [16]. The
rising incidence of chronic disorders such as diabetes and obesity are expected
to boost market growth in the coming years. In addition, healthcare tracking
technology is expected to become significantly more widespread.
In 2018, wearables healthcare tracker sales
were estimated to be 125.3 million units. The market is expected to grow to
189.9 million units in 2022, a five-year CAGR of 11% [17].
2.5 Biological Engineering
Regenerative treatments can provide options that replace the
currently used tissue repair solutions such as transplants, surgical
reconstruction, and mechanical devices. 3D tissue engineering has been evolving
rapidly and technological advancements in this field include replacement of
embryo cells with proliferative stem cells, organ-on-a-chip technologies and
use of 3D bio-printers to design in-vitro implants.
The regenerative
medicine market is projected to reach $38.7 billion by 2024 from $13.3 billion
in 2019, a CAGR of 23.8%. Cell-based immunotherapy & cell therapy products
accounted for the largest share of the market in 2019 [18].
2.6 Bioinformatics
Bioinformatics is the integration of databases and software
tools to extract knowledge from biological data. With increasing usage of
different bioinformatics platforms in various genomic and proteomics
applications, the global bioinformatics
market is projected to reach $13.50 billion in 2023, up from $7.73 billion in
2018, a CAGR of 14.5% [19].
2.7 Neuroscience
The overall neuroscience market includes technologies for
brain imaging, neurology medicines, and cognitive training. Increasing
occurrences of neurological diseases such as Parkinson’s and Alzheimer’s,
growing developments in the field of neuroinformatics and a rise in patented
research initiatives have significantly boosted the neuroscience market in
recent years.
The global neuroscience
market size was $24.09 billion in 2013 and is anticipated to reach $30.80
billion by 2020, a CAGR of 2.9% [20].
2.8 Medical Devices
There are a number of trends leading to the
growth of the medical devices market. Some of these include: increases in
healthcare expenditures (especially in emerging economies); demand for smaller
and more portable devices; government support for technologically superior
devices; and a rise in chronic diseases.
The global medical
devices market is expected to post a CAGR of over 5% from 2018-2022. The
increasing market penetration of medical devices in emerging countries will
have a positive impact on the market and contribute to its growth significantly
over this time frame [21].
Indxx Advanced Life Sciences & Smart Healthcare Index
Based
on trends in Life Sciences and Healthcare, as well as new technologies in the
market, Indxx has developed the Indxx Advanced Life Sciences & Smart
Healthcare Thematic Index.
The
Index is designed to measure the performance of companies involved in the
Advanced Life Sciences & Smart Healthcare sector, as defined by Indxx.
3.1 What does Smart Healthcare Look Like?
- Appropriate
treatments are delivered at the appropriate time, in the appropriate place, for
the appropriate patient.
- Clinicians
use technology to more accurately diagnose and treat illness and deliver care.
- All
care delivery stakeholders across the ecosystem effectively and efficiently
communicate and use information.
- Patient
data is in one, easily accessible place.
- Patients
are informed and actively involved in their treatment plan.
- New,
cost-effective delivery models bring health care to places and people that
don’t have it.
3.2 Index Sub-Themes
Indxx
has defined ‘Advanced Lifesciences & Smart Healthcare’ as being comprised
of the following sub-themes:
- Robotics:
Companies in this category support the healthcare industry by providing robot
companions, surgical robots, pharmabiotics, disinfectant robots or
exoskeletons.
- Nanotechnology:
Companies in this category provide nanotechnology to the healthcare industry.
Nanoparticles enable physicians to target drugs at the source of the disease,
which increases efficiency and minimizes side effects.
- Genome
Sequencing: Companies in this category provide services,
such as nutrigenomics, the cross-field of nutrition, dietetics and genomics.
- Healthcare
Trackers: These companies offer products like advanced
wearables that help in collecting and tracking health metrics like heart rate
and blood pressure, including fitness trackers that collect data related to
workouts.
- Biological
Engineering: Companies in this category apply the concepts
and methods of biology to solve real-world problems related to life sciences.
Some of the applications include: Medical imaging, Biomaterials and Orthopedic
Engineering.
-
Bioinformatics:
These companies use IT in biotechnology for data storage, data warehousing and
analyzing DNA sequences. This acts as an essential tool for drug development
and discovery.
- Neuroscience:
Companies that are engaged in the multidisciplinary branch of biology, that
deals with the anatomy, biochemistry, molecular biology, and physiology of
neurons and neural circuits. The overall market includes technologies for brain
imaging, neurology medicines, and cognitive training.
- Medical
Devices: Companies under this category designs,
manufactures, and sells various innovative medical, surgical, and diagnostic
devices for the treatment of various diseases such as peripheral vascular
disease, vascular access, and for use in oncology and surgical treatments.
Investing in the Transformation of Healthcare: HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL)
In
April 2019, HANetf and Gins Global Index Funds launched the HAN-GINS Indxx
Healthcare Innovation UCITS ETF (WELL). WELL is a UCITS compliant ETF domiciled
in Ireland, enabling investors to gain exposure to large, mid and
small-capitalisation companies from Developed and Emerging Markets that are
involved in the Advanced Life Sciences & Smart Healthcare sector.
The
fund tracks the Indxx Advanced Life
Sciences & Smart Healthcare Thematic Index, a rules-based benchmark
capturing ~88 large, mid and small cap stocks that meet liquidity and
free-float criteria. The index constituents are capped at 4.5% during an annual
rebalance to reduce concentration in large-cap securities.
Global Healthcare ETF Partner
GinsGlobal
Index Funds is a global asset management company specializing in index mutual
funds, structured products and capital guaranteed funds for institutional and
private investors. Founded in 2000, the company manages over $5 billion across
its product suite and has operations in North America, Asia-Pacific, Middle
East and Africa.