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EF: If 2020 was the year of diagnostics, 2021 the year of vaccines, how would you summarize 2022 from a healthcare perspective, and what does 2023 have in store for Terumo in your region?
PD: 2022 had multiple dimensions for me; predominantly, it has been one of the most uncertain years for healthcare due to the world suffering a very large pandemic which continued to negatively impact the number of elective procedures in many markets, while other areas took off due to Covid treatments.
Terumo has a very diverse portfolio; our cardiovascular and blood management units were seriously impacted because there were low numbers of procedures and blood collections. However, we scaled some of our fight-COVID product lines (vaccination syringes /needles, plasma therapy, ECMO, infusion pumps), which over 2021, played a big role in contributing to many Asian health systems (ECMO in Korea and Vietnam, plasma therapy in Indonesia, vaccination syringes in Singapore or Australia, and so forth).
But 2022 was a peculiar year in which, with the tail end of Covid-19, the fight-COVID started dropping, but elective procedures had yet to take off in many countries as the system was still quite overwhelmed with the stress of the whole situation.
On top of the pandemic, in 2022, we had the war starting and continuing in Europe, causing an energy crisis, aggravating raw material shortage, and further raising supply chain costs, which were already high due to the pandemic.
All this has made for a complex 2022, not a bad one, but one where leaders had to bring their best foot forward to lead, prioritize and have a balance sheet focus. It has been a challenging year so far, we are holding on to performance, but financial results are not all. It has been a year of tremendous uncertainty, and 2023 will continue to be difficult; China is today dealing with a huge spate of Covid, which is reflected worldwide as a resurgence risk. We are at the end of the year with the Christmas holidays, so there is a clear risk that it may snowball. Thankfully it is not a fatal variant, and therefore mild, but it will fill hospitals and somewhat overrun the medical system, and as a result, the supply chain will also be swamped. I think the first quarter of 2023 will be very uncertain, and the rest of the year will depend on how maturely society reacts. That makes it four years of facing healthcare challenges with the added pressures on foreign currencies. In healthcare, unlike many other industries, we cannot quickly adjust to global currency fluctuations because there is a patient at the end of the supply chain. In most cases, the government is paying, making raising the price to cover the cost inflation very difficult entirely.
EF: What are the lessons learned over this period managing the APAC region, and how are you dealing with and applying the lessons learned?
PD: I did what I could in an uncertain situation; it kept me on my toes, only knowing later if my decisions were the right calls. Terumo is in the middle of a massive positive transformation. We have been a traditional medical device company focused on engineering capabilities. Thirty or forty years ago, we were driving cutting-edge breakthrough innovation. Still, as we grew and became bigger, we moved from being singularly innovative -as happens when companies get bigger- to being manufacturing and process focused. Now we are working to reorient Terumo back to cutting-edge innovation again.
Healthcare is going through the maximum disruption now, compared to what it has seen in the last hundred or two hundred years; health is moving away from hospitals to the patient's homes, devices speak to each other, and there is a lot of AI. Today in the US, one of every four doctors wants to retire prematurely because they are overwhelmed by work. Doctors are required to spend more time on a computer screen than with patients. In the next 20 years, I believe the number of doctors will drastically drop, the use of AI will increase hugely, and there will be a significant change in how doctors treat patients.
Medical device companies are capable of high-quality manufacturing, and manufacturing is scaling up outside the US, Japan, and Europe, mainly in China, Southeast Asia, India, and Eastern Europe. New technology, such as robotics, access to data, and quality systems, is bringing the engineering differentiators down. It is impossible to be a Jack of all trades as resources are limited, and the companies must decide where to invest, whether in pure-play manufacturing or innovation. With healthcare changing so fast, co-creation is possible, and we must choose what to do - manufacture, design, or market – and with whom. We need to depart from a 'conglomerate' approach to a 'consortium' approach.
Terumo will continue to be a medical device company but will, however, transform to surround the devices with a suite of solutions, such as AI-enabled physician support tools, products at the confluence of medical devices and pharmaceuticals, and digital improvement to the patient's experience. We are working on a 3D strategy. Delivery – helping deliver the right therapy to the target area by applying our 100-year experience and capability to build delivery devices and solutions. Digital - improving the patient's treatment pathway and life cycle through digitalization. Lastly, Deviceceutical, a new word, because we believe the boundaries between pharmaceuticals and devices will blur. Many devices will be layered /combined with pharma, as they will be applied to the patients' required site.
We will take this hundred-and-one-year-old Japanese company and transform it with this three-D strategy.
When I came to Terumo ten years ago, large parts of our business came from Japan, but today majority of our business comes from outside Japan.
Back then, the majority of our workforce was Japanese; today it is global.
I was assigned to Terumo Asia Pacific with a mandate to change the ways of working. The nine regional offices (India, Singapore, Malaysia, Vietnam, Indonesia, Philippines, Thailand, Australia / New Zeeland, and Korea) worked as separate entities without common strategic themes, collaboration, and synergy. This made us lose out on the market opportunity and the ability to benefit from each other.
There needed to be a regional organization, identity, strategy, collaboration, standards, and regional input into our global plans.
We are going through this strategic change step by step, both globally and in the Asia Pacific region.
Simultaneously, we have to ensure that we manage the pandemic and the supply chain challenges in a crisis management mode.
It is very satisfying and fulfilling but also a balancing act.
My biggest learning these past few years is an amazing realization that we could be this resilient. Looking back over the last three to four years with a pandemic, a war, difficulties, and deaths in societies around us, I would have thought it would have created a massive depression, making us all give up, but the opposite happened. The answer perhaps lies in having a purpose, in my case, making difficult decisions on resource allocations, funding, talent, and projects. When I had no easy answer from the past experience, I went back to our purpose of 'contributing to society through healthcare'; it was the only way to get my answers. And there lies my second learning: the strength of a simple higher purpose. As I was a new leader at the start of the pandemic driving a large transformation within the region, our associates were worried there may be cutbacks. We ensured we kept all our people and raised those who performed well.
People refer to MedTech as high tech, but more than a technology business, it is a trust and credibility business.
A 100-year-old device, such as a thermometer, still saves the world in a pandemic.
Bringing our people together kept us together. We have done things differently over the last three or four years, but our 450 associates have adapted and worked better through the pandemic.
EF: Surrounding the device to create a complete solution seems to be where the industry is headed.
PD: Medical devices will deliver much better when supported by i) interoperability - with devices talking to each other and with electronic medical records in a seamless common language conversation, ii) robotics - we are not yet at the stage where a cardiologist in Europe can do a procedure on a patient in Vietnam, but we shall get there, and iii) AI-based algorithms determining how treatment outcomes can be improved by comparing massive data points.
Advanced algorithms that support physician decisions and patient lifestyles will digitally transform healthcare, and we want to be ready and prepared for it.
EF: Could you elaborate on the strategic importance of Singapore and the A-Pac region to Terumo? How are you using Singapore as a gateway and a hub to drive access in the region?
PD: We are an Asian-origin company and the world's largest Japanese medical technology company. Most of the top global MedTech companies are US and Europe based.
The world's economic centre of gravity moves a few degrees yearly to the east, yet our regional health systems still need to be defined. Asia has a huge population that needs access to reliable healthcare, and with the world becoming smaller and people more exposed, the expectation and the need for quality healthcare increases. As a result, we see growth funding aggressively coming into India, Indonesia, Vietnam Philippines, and gradually these emerging markets will scale up. New hospitals are still being built in Asia, which is not happening as much in developed markets, making business growth an opportunity in the mid to long-term as Asia invests in the future.
As a Japanese company, we are also obliged to be successful in Asia; we do not have a choice.
In this context, Singapore is the right location for our regional headquarter. It provides a stable and conducive policy environment, an excellent logistic location and ecosystem, and good access to experienced talent.
EF: How are you leveraging your role as a member of the APACMed board to increase collaborations to help shape the future of healthcare in the region?
PD: An industrial association must not be a place for any anti-competitive activity.
The APACMed leadership and my board colleagues are constantly focused on compliance strengthening. We are trying to facilitate things such as crafting policy frameworks for software as a medical device and creating sufficient stakeholder awareness on the value of medical technology.
APACMed is the only regional medical technology association in Asia. Ten minds work much better than one and addressing different stakeholders as a group gives us strength.
Across Asian countries, we can sit across the table with providers' systems and have enriching and learning dialogues.
Regulators who have traditionally regulated the pharma industry often need collaboration to gain insights into medical device regulation. Here, they were not dealing with APIs, molecules, or drugs but a combination of electro-mechanical, polymers, etc. which are very complex devices. Now, they even have to evaluate software, which can update every other week, making regulation even more complex.
It requires a new set of regulatory skills and a specific regulatory network.
To improve each country's regulatory skills and efficiency, reduce duplication, minimize costs and enlarge swift access for patients to high-quality innovative medical technology, it is important to form regional cross-collaboration between regulators, using common standards and mutual honouring of approval systems, especially across such already established blocks as IMDRF (International Medical Device Regulators Forum), ASEAN, G20, RCEP, etc.
For example, Japan has an excellent system of fast-tracking innovative devices, and we talk to other country regulators about it as a way to contribute to replicating it.
Lastly, there are pockets where policymakers are increasingly pushing for the localization of medical device manufacturing. While long term there is merit, there must be a better policy of targeting this to low-risk devices first, 'driving local for global' rather than 'local for local', ensuring a strict global quality standard, and building attractive financial risk mitigation incentives.
Together, the regulators and industry must find a balance between innovation, quality, cost, and timely access. This is impossible without active collaboration.
EF: Singapore is known for its startup culture, including the health tech area; if you had to create a new health sector startup in Singapore in 2023, what would it be and why?
PD: That is a difficult question, as so many diverse healthcare opportunities that startups can address exist.
I come from India and live in Singapore, and both countries are known for their thriving startup businesses, as are several other countries in the region I serve.
As a simple example, pharma and MedTech companies offer solutions for cardiac disease; many offer successful drugs and therapies; medical insurance provides reimbursement for these; and finally, the health system ensures these are delivered adequately. These multifarious operators in this single domain need tons of data to improve their work, as data is the new healthcare superpower.
Health data offers solutions, and we all want data, but today data is unique to individuals and companies, and because we all want unique data, we swamp professionals by asking them to input information in tens of different formats.
If I could build a simple single interface to bring in all that data, while keeping it proprietary to each player, drug, or device, it would be a fantastic middleware. While this may require significant design effort for a large, diverse group to sit down and find a common architecture, if achieved, it would simplify healthcare and hugely benefit the system and patients.
EF: What would be your advice to the younger generation looking to get involved in health management?
PD: One of the biggest complexities of our time is a multi-generational workforce.
We can have a 60-year-old working alongside somebody barely over 20, requiring them to continuously collaborate and communicate, which has not happened as much since the beginning of industrialization. My advice, which is more of a plea, is to ask people not to shut out the other generations; all generations bring value to the table.
I also believe that the younger generations –gen Z, for example- should not be looked upon as unique in the workforce. Yes, they have a different social environment than in the past, but their value systems are no less robust than any other generation's.
I often say to the young that healthcare is a calling, not merely a profession, as satisfaction in healthcare comes from doing good.
If the individual is interested in only living well and not necessarily doing societal good, this is not the profession for that person. It calls for some introspection on what the person wants.
Personally, I sleep well because I know what I do allows people to live longer and be disease-free, while it also allows me to take care of my material responsibilities.
So, my only advice is to understand your purpose and be true to that, as I truly believe that to work in healthcare is to do God's work.
EF: When you look back at this period in your professional career, how would you like to be remembered as a leader?
PD: Why should I even be remembered? I am just another among so many!
But if I must answer, I can only say I tried hard to leave what I inherited better after me.
My 81-year-old mother, who is not a professional, recently asked me what I did, and I found it unusually hard to explain my work to her in simple lay terms.
Then it came flashing to me after a sleepless night; I collect people!
Like a curator who collects and cares for beautiful works of art, I collect, bond, and take care of people, and if I must be remembered, I would like to be remembered for that.