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Powerful economic, social and technological trends mean healthcare is one of the fastest growing sectors of the world economy.

The Challenge

• The global population reached 6.6 billion in 2007, and is predicted surpass 9 billion by 2050.¹ This would equate to healthcare spending in 2050 of €8 trillion, compared with €4.4 trillion in 2005.²
• An ageing population also needs greater healthcare.  Since 1950, the proportion of older persons (aged 60 or older) has been rising steadily, moving from 8% in 1950, to 11% in 2007 and it is expected to reach 22% in 2050.³
• According to the World Health Organisation (WHO), chronic diseases,⁴  are the leading cause of mortality globally, representing 60% of all deaths. As populations in emerging and developing economies continue to adopt western lifestyles and diets, this exacerbates the challenges posed by chronic disease.
• Communicable diseases,⁵ are still a major case of death and disability for millions of people globally, the burden falling disproportionately on those in the developing world. More generally, healthcare inequalities still persist globally.

Markets & Drivers

Changing demographic and global disease patterns presents major challenges and opportunities for healthcare management, with the central aim being to deliver better quality healthcare at a lower costs. These pressures, coupled with technological innovation and greater consumer power are leading to increased demand for healthcare goods and services.

• Increasing emphasis on prevention and early detection can improve healthcare outcomes. WHO states that 80% of premature deaths caused by heart attacks and strokes are preventable. Early detection can also reduce costs, for example early discovery of breast cancer can reduce costs by up to 5 or 6 times compared to late stage treatment.⁶
• The healthcare products market in 2007 was worth US$ 629 billion, with medical devices representing 34% of the total and showing sales growth of 6% (2007E – 09E).⁷
• The global in vitro diagnostics (IVD)⁸ market was estimated at US$ 30 billion in 2005, with growth at 6-8% a year.⁹
• Within healthcare services, growth is fastest in the speciality/secondary care setting e.g. hospitals.  Estimates for 2005-9E placed CAGR for specialty/secondary at 9%, and primary care at 1%.¹⁰

Investment Opportunities

The Health theme focuses on companies whose goods and service enhance, maintain or restore medical health.  This includes companies in the following sub-themes:

Examples of companies within the Health theme include...

• Intercell (Germany), involved in the research & development of vaccines to treat infectious diseases
• Pediatrix (USA), a provider of maternal, newnorn and paediatric physician services
• Smith & Nephew (UK), a healthcare company focusing on orthopaedics, wound care and endoscopy, making products to repair joints, skin, soft tissue and bone