Asia is getting wealthier, older—and potentially sicker, as rates of non-communicable disease rise across Southeast Asia. Yet governments aren’t investing enough in public health care, threatening to open up a massive funding gap.
“Asia has more diabetes, cancer and cardiovascular patients than anywhere else in the world,” Abrar Mir, co-founder and managing partner of Singapore-based health care private equity firm Quadria Capital, tells Fortune.
Asia’s health care market is expected to reach roughly $5 trillion in size by 2030 and contribute 40% of growth in the global health care sector, according to a report by the Boston Consulting Group. Yet it currently accounts for just 20% of global health care spending, despite making up more than half of the world’s population.
Southeast Asia is particularly at risk from rising rates of chronic disease. The World Health Organization estimates that non-communicable diseases (NCDs) claim 8.5 million lives annually in the region, driven by lifestyle factors such as tobacco and alcohol use, physical inactivity and unhealthy diets.
Countries are also aging faster than their level of development might suggest. Thailand, for example is quickly becoming an “ultra-aged” society: The country has more people aged over 60 than those under 15.
ASEAN governments aren’t keeping pace on public health spending, due to competing priorities like economic development and infrastructure. Southeast Asian governments allocate less than 4% of their GDP to healthcare, compared to 9% in OECD countries.
Mir argues that shortfall open up space for private capital, adding that 70% of hospital beds in Asia are funded by the private sector. “In this region, private capital is essential in building out social infrastructure,” he says. “If you don’t have it, many people would go without access to basic health care.”
Quadria, which has about $4.2 billion in assets under management, invests in health companies across Southeast Asia, including Indonesia’s Hermina Hospitals, Malaysia-based Straits Orthopaedics, and Vietnam’s mother-and-baby retailer Con Cung. The firm also partners with sovereign wealth funds, development finance institutions and impact investors, though Mir declined to cite specific names.
Health care innovation
Parts of Asia are quickly moving up the biopharma value chain. The region accounted for more than 85% of growth in innovative drug pipelines in 2024, led by China and South Korea, according to a report from McKinsey. That year, the region also generated almost two-thirds of the world’s biotech patent grants, more than five times what came out of Europe.
Southeast Asia, however, is further back on the value chain, and attracts global firms due to its low production costs, rather than an edge in health care innovation. “Over time, we think this will translate to innovation as it has in China, but in Southeast Asia, it isn’t there yet,” Mir says.
Regardless, Mir concludes that Asia’s health sector holds immense potential. “Today’s health care firms must have a clear strategy in Asia, or they will no longer be global leaders,” he says.
“We can do it better and cheaper.”
