This article is dictated by Lin Rong-Jin, Chairman of Center Ventures,

The COVID-19 outbreak is now a pandemic.  The Taiwanese government is globally praised for its quick action and preventive measures.  However, I have observed two future trends in the biopharmaceutical industry in Taiwan.  Firstly, the era of smart healthcare may start earlier than expected; and secondly, pharmaceutical companies may face a new wave of mergers after the outbreak.

The COVID-19 outbreak has changed the public’s habits of visiting hospitals.  While the public avoid unnecessary visits to hospitals, they turn to pharmacies for their medical needs, including buying face masks and filling prescriptions.  This change creates an opportunity for the applications of AI.

Applying AI to healthcare is not a new thing.  Long distance clinic services are already available in the US and China. AI has also been used to support doctor’s interpretation of health data and images. 

As health staff’s workloads increase due to the soaring number of COVID-19 cases, AI will play an important role to share the burden.  Taiwan is moving towards this direction.

Taking image interpretation as an example, it used to take hours for doctors to identify abnormal chromosomes.  With the support of AI, it takes only 0.5 seconds.  Doctors only need to reconfirm the result.  AI will significantly improve the healthcare efficiency.  Hospitals are keen to adjust to this trend only if such a practice is supported by the NHI.

AI can also help to screen patients who visit hospitals. It can be used to take patients’ basic health readings and make swift decisions on whether doctor’s treatment is needed.   Patients with ailments can obtain prescriptions without seeing a doctor.

As for pharmacies, due to the rise of health awareness and the emergence of health economics, minor illnesses are less prevalent in Taiwan.  More and more people use community pharmacies to re-fill their prescriptions for chronic conditions.  Chained pharmacies have an opportunity to thrive.

There are two features of the chained pharmacies in Taiwan.  First, stores are quite small in comparison with those in the US.  Second, most businesses come from the sales of basic medical materials, health products and baby products, instead of prescriptions.  However, the COVID-19 outbreak has changed the public’s attitude towards pharmacies.  It is foreseeable that hospitals and pharmacies will forge a closer relationship for mutual benefit in the future.

As for pharmaceutical companies, during the financial crisis in 2008, I predicted that there would be a wave of mergers in Taiwan.  In the past 10 years, the number of pharmaceutical companies in Taiwan has lowered from 500 to over 100.  This outbreak will hit hard on small businesses.  Merging with bigger firms will be their only way out.

This outbreak is changing the ecosystem of the pharmaceutical industry.  Those who fail to adapt to the changes will certainly be left behind.

【2020-03-25 / Economic Daily】