As the US and EU spine markets mature, many manufacturers have begun looking for new opportunities in the Asia-Pacific region (Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam). Growth in these areas is being driven by economic expansion, aging populations, development of more-advanced spinal treatments, and increased surgeon education and training. The effects of the 1997 Asian currency crisis (which caused imported products to become more expensive in local currency terms) have dissipated, and many countries are now returning to pre-Crisis growth levels.
        According to a recent report from Millennium Research Group, Asia Pacific Markets for Spine Surgery Products, the market for foreign-made spinal implants in Asia Pacific generated more than US$170 million in sales for 2000—a 6.4% increase over 1999. By 2004, this figure will reach nearly US$231 million—representing a compound annual growth rate (CAGR) of 7.9%.
        Japan currently accounts for 56% of the spinal implant market, and both market penetration and implant prices are higher there than the rest of the Asia Pacific. Australia, South Korea, and Taiwan also have well developed markets. In most other countries, however, spinal implant markets are still in their infancy, with few surgeons trained to perform such complicated procedures.
        The market for cage products is especially underdeveloped, mostly as a result of cost, and a lack of surgeon education, and a perception that cages are ineffective as stand-alone devices. In 2000, the cage market in Asia Pacific exceeded US$22.9 million—an increase of 6.9% over 1999. Australia, Japan, and South Korea currently account for over 93% of this market, which is forecast to increase at a CAGR of 8.2%, reaching a value of nearly US$31.4 million by the year 2004.
        Overall, the spine market in Asia Pacific is highly diverse. The healthcare market in Japan, for example, is well developed, and the volume of spinal implant procedures is high. Other countries, such as Pakistan, Vietnam, and Indonesia, are currently in the early development stages and show great potential for growth.
        The product approval process varies enormously among countries, too. Some countries, such as Japan, have their own approval process for products, while in India there are currently no formal quality standards.
       The quality of healthcare also varies significantly. According to the WHO, the Asia Pacific is home to the two countries with the world's best overall level of health—Japan and Australia. These two countries enjoy excellent healthcare systems, have high per capita spending on healthcare, and utilize all of the latest medical technologies—but they are the exception and not the rule. Indeed, some of the region's poorer countries, including India, Pakistan, Vietnam, and the Philippines, are unable to afford such luxuries and depend heavily on domestic-manufactured products that are inferior in quality.
        In all but the most developed Asia Pacific countries, the increasing demand for better and more specialized medical services is met by a small, but rapidly expanding, private sector. The more-developed markets, like Japan, South Korea, and Taiwan, have universal public health insurance systems and predominantly private hospital networks. Most of the region's less-developed countries have some form of public hospital provision, but the majority of public funds now tend to be concentrated on the expansion of primary care. For some of the very poorest countries, overseas aid projects are an essential source of funding, and are often the only way they can make significant improvements to their healthcare infrastructure.
        To succeed in these markets, US and EU manufacturers will have to adopt new ways of doing business. For example, in some Asian countries, purchasers prefer to deal with local suppliers, so many foreign companies will be forced to develop local partnerships. These foreign manufacturers will also have to compete with local manufacturers, who can often offer products at a fraction of the price of imports.
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