Australia, Singapore, have lessons for Hong Kong

The COVID-19 crisis has forced us all to consider many things we had taken for granted, like where our prescription drugs come from, and how many are stockpiled in case of trade disruptions. Not to mention how much economies rely on service industries, and how quickly those industries can collapse when tourism, trade, and travel come grinding to a halt. Perhaps most importantly, we are able to see the resilience of our health care and public health communications systems, and how disruptions to small pieces of much larger systems have a disproportionate operational impact.  

Personal protective equipment, or PPE, became a hard to acquire item for doctors and nurses fighting to save the lives of their patients, when most had previously assumed it would be available when they needed it. Much of the world’s PPE is produced in mainland China which, after closing its borders and rushing to equip its own healthcare workers, was suddenly unable to meet the surging demand for N95 masks, gloves, ChemMax suits, and other PPE items. 

The pandemic has also shed light on the critical role Asia-Pacific economies play in both the manufacturing and development of medical devices, including those used to treat COVID-19 patients. Before the pandemic, this sector was already booming, and demand for powered air-purifying respirators (PAPRs) and other medical devices has increased growth projections significantly. The Asia-Pacific surgical and medical device market was projected to grow at a compounded annual growth rate of 6.5 percent between 2017-2026, due in no small part to the enormous research and investment (R&D) made by regional economies. In 2018 alone, China, South Korea, and Japan spent a combined $613 billion on R&D, representing three of the top five spots in global R&D spending. Australia, India, and Singapore also spend significantly on R&D, including in the medical technology sector. Medtech companies based in the region have been at the forefront of digitizing medicine and expanding access to telehealth, which has also proven to be a sector accelerated by the current pandemic. 

R&D spending is not the only indicator of a country’s status as an incubator of innovation, however. Policymakers must work to continue to refine a regulatory framework which protects consumer health and safety while encouraging companies to develop new products that address the greatest challenges faced by society, whether the COVID-19 pandemic, the demographic shifts of many Asian countries, or the need to drive down the cost of healthcare while expanding access for growing populations. 

Australia, although at times overlooked for its role in the region’s economy, has been praised for building a regulatory regime which codifies a pro-consumer, pro-innovation cost-benefit analysis. One example of this regulatory approach is the Australian government’s assessment of siloxanes, the chemical compounds underpinning silicone materials, which are widely used in some of the PPE, as well as in medical devices that are proving to be crucial in the fight against COVID-19. Regulators in Australia found that the chemicals do not pose a risk at current levels of exposure. Australia uses a risk-based system for its assessments, which enables regulators to take into account all the available scientific evidence and promote innovation while still protecting human and environmental health.

If other countries fail to take a similar approach and instead default to bans and unscientific restrictions of important chemicals which play a significant role in healthcare innovation, , it could take life-saving products out of the hands of doctors and nurses, instead of empowering them to treat their patients effectively while staying safe and healthy themselves. 

Singapore has called smart regulation a necessary “competitive advantage” in a world with rapid technological changes and rising global competition. For countries looking to embrace innovation and increase their own competitiveness, risk-based rulemaking which takes into account the benefits of innovation, and not just the perceived costs, will be essential. 

As we have learned, PPE cannot just be easily and quickly manufactured, nor can respirators or other life-saving medical devices. N95 masks, for example, require tight-fitting silicone seals, which prevent unwanted particles from entering the respiratory system of the wearer. These masks have proven critical to keeping essential workers safe and able to serve their patients. Respirators and ventilators, which have saved tens of thousands of lives in Asian countries, also rely on silicone, popular for its durability, resistance to heat, and hypoallergenic properties. Regulations should be designed to recognize the enormous benefits of these and other similarly innovative products, for both public health and economic reasons. 

Of course, the next step to addressing the global pandemic and achieving a return to economic growth will be the development of an effective COVID-19 vaccine. This will bring into sharp focus the ability of regulatory frameworks to encourage innovation and to gather and assess available safety evidence.  Innovation is inherently fragile, and it should be carefully cultivated, a process which includes removing unnecessary barriers and relying on evidence-based analysis, rather than political pressures and influence. Regulators across the Asia Pacific should be striving to emulate the models that work. Much relies on their ability to get it right.   

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The author is a founder of The Lion Rock Institute, founder of Harbour Times, and has had his works appear in the Wall Street Journal, SCMP, The Standard and other publications.

the author

Andrew Work is the CEO of New Work Media, publisher of Harbour Times. He has run The Canadian Chamber of Commerce in Hong Kong, founded The Lion Rock Institute and has over 25 years engagement in media, politics, policy and community engagement.