China takes the lead in PACS growth

Rising standards of patient care are driving PACS adoption among top-quality medical facilities in Japan, South Korea, and China, making the Asia-Pacific region the third largest PACS market after the U.S. and Europe, according to an industry report from Frost and Sullivan.

"Larger markets currently exist in Japan ($220 million annual PACS revenue) and South Korea ($60 million), but the fastest growth rate is happening in China," said Frost industry analyst Antonio Garcia.

The annual average PACS growth rate of 20% in China expected over the next five years is the highest growth rate in the world, Garcia said. The growth rate in Japan and South Korea is half that.

The surging interest seen in Asia presents new opportunities and challenges for multinational PACS manufacturers. To successfully participate in the region, PACS vendors must adapt their technology to meet specific characteristics demanded by each country, Garcia said.

"For example, China, Southeast Asia, and South Korea typically use radiology information and hospital information systems that do not comply with the U.S. HL7 standard," he said.

Instead, these countries opt for a variety of local language-based systems that operate on 2-bit characters.

"Multinational vendors must either make significant changes to their platforms or else find a cost-effective way to custom-integrate a legacy HIS/RIS with their PACS offering," Garcia said.

On the other hand, the U.S. patient care model is already popular in areas such as Malaysia, Singapore, Australia, New Zealand, and Hong Kong. Multinational vendors would therefore find it more profitable to sell pre-integrated RIS/PACS solutions that require the end user to abandon the legacy RIS platform, he said.

Another issue facing multinational PACS vendors is intellectual property protection. There are reports of some competitors selling pirated versions of PACS products, sometimes called "Dragon PACS," compelling vendors to safeguard intellectual property through software safeguards and license keys.

"Although PACS vendors are cautious regarding intellectual property issues, they have come to accept the impossibility of instituting an exhaustive protection plan, since the potential opportunities in the Asia-Pacific market definitely outweigh the inherent risks," Garcia said.