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Two perspectives are being discussed 1. Industry perspective 2. Consumer perspective In Industry perspective, we have classified the Medical services and goods into six categories a. b. c. d. e. f. Hospitals Medical Tourism Medical Education Medical Equipment services Pharma Industry Pathology Labs
Classification Sector – The following parameters are being discussed in the sector analysis of each category 1. 2. 3. 4. Brief Introduction Current Sector Analysis in India Contribution to the economy and growth Future prospects
A hospital is a health care institution providing patient treatment by specialized staff and equipment. Hospitals are usually funded by the public sector, by health organizations (for profit or nonprofit), health insurance companies or charities, including direct charitable donations Various categories in hospitals a. Government Hospitals b. Private Hospitals c. Charitable Hospitals Types of hospitals a. b. c. d. e. General Specialized Teaching Clinics District
Sector Analysis in India
The Hospital Industry is witnessing a sudden paradigm shift in last five year. Though this change was inevitable and the Industry has been working towards it for a decade now, this has been visible only in last two years. It is undergoing a change from unorganized to organized structure. A US$ 36 billion industry today and growing at 15% CAGR, the Indian healthcare industry will be a US$ 280 billion by 2022.
Industry Value in US$ Billion
300 250 US $ Billion 200 150 100 50 0 Industry Value in US$ Billion 2002 36 2012 70 2017 145 2022 280
Employment Opportunities Employment opportunities are provided to as many as 4 million people in hospital segment and other related sectors to hospital industry in India. Owing to the differences in medical expenses in western countries and that of India, India has
become one of the favorite for health care treatments. others followed. Most of the existing players announced their huge expansion plans and many of large companies with no or very little existence in healthcare delivery declared that they will be putting in huge investments in Healthcare Delivery.4 1.4 Apollo Hospitals Enterprise limited Wockhardt Hospitals 1.e. Number of Locations 11 8 5 9 11 Number of Hospitals 11 10 13 11 14 Number of beds *1000 3 1.ZG .GDP.8 3 2 Hospital Groups Apollo Hospitals Enterprise limited Wockhardt Hospitals Fortis Healthcare Manipal Health care Care Hospitals Number of Locations Number of Hospitals 13 Number of beds *1000 14 11 9 11 11 11 8 10 5 3 1.The following graph shows the growth rate of GDP over past 5 years.8 3 2 Fortis Healthcare Manipal Health care Care Hospitals Factors Contributing for the Hospital Industry boom in India Strong Indian Economy .KD. Last 2 year (i.http://data. It can be inferred that India has recorded a very good annual growth rate in GDP Growth Rate Growth Rate 20 10 0 2007 2008 2009 2010 2011 Growth Rate Source . Today industry is moving rapidly towards organized sector and more so towards corporatization of healthcare delivery. 2010 & 2011) have been years of dramatic changes.Many foreign companies are willing to invest in India due to the progressive nature of health care industry Corporatization of hospital Industry Apollo Hospital started the trend of corporate hospital. There has been a large gap after first corporate hospital and the trend of corporatization in India.org/indicator/NY.worldbank.MKTP.
renal failures.The disease profile of country as a whole is changing. steep fall of IMR. providers need to offer innovative services and products that are geared toward health care consumerism — encouraging patients to become better educated about their care and coverage and helping employers offer better choices.E&Y. It is all changing very fast. Coronary Artery Disease. is witnessing a15% to 25% profitability. metabolic syndrome & stress. Stroke. Hospitals are now able to manage their funds in a better way.The reach of Insurance have been increasing. Increasing Demand within the country . eradication of small pox. Disease Profile of the Country .IRDA Journal Better Profitability – Hospital Industry is a highest capital intensive service industry and profitability has never been as good to match others. The best of the systems of world are still struggling to achieve a good profitability level for healthcare. Communicable diseases are still persisting as major health problems but the Non . diabetes. Though costs have increased still they are able to maintain good profit margins on all their services. and they are increasingly taking on the role of active and involved consumers. & poliomyelitis being on verge of eradication. In the present scenario. The premiums collected from Health Insurance are predicted to increase by around 50% from last year. November 2010 Diabetes . Chronic Diseases 2005 380 640 310 2012 460 8 Cancer 10 Cardica Diseases Source . Cancer are on a rise as a result of Hypertension. One can see that the lifestyle diseases are now taking the limelight from the traditional infectious diseases. Increased Options for Healthcare Financing .The demand for quality healthcare has increased within the domestic healthcare consumers. However. Improvements in socioeconomic conditions in the last five decades in doubling longevity from 32 to 64 yrs. if we leave the charitable and government hospitals aside.communicable diseases are doubling its incidence & prevalence. elimination of leprosy & yaws. This increased profitability can be attributed to increased flow of patients and higher margins Earlier Break Even . credits to the success stories post independence. India on the other hand. Demographic transition reflects quantitative and qualitative changes in the population profile and the country is facing a double burden of communicable & non-communicable diseases. Source . the challenge we face with the on-going changes in disease burden that is producing a major health transition. Today’s patients have more choices than ever when it comes to choosing and using health care resources. Hospital Industry in United States had a profitability of just above 5% in last financial year.The break even for hospitals has been 5-7 years till last decade.
Today only 25% of the Indian population has access to Western (allopathic) medicine. Nagaland. Although some form of health protection is provided by government and major private employers. Himachal Pradesh. because they cannot afford to visit the private facilities that thrive in India’s cities. unani and acupuncture. along with its four subsidiaries. Jharkhand. Many of the rural poor must rely on alternative forms of treatment.150 community health centers per million population but has less than half that number. For the small percentage of Indians who do have some insurance. Among other things. The urban poor fare even worse. Uttaranchal and Uttar Pradesh.. . Meghalaya.India’s healthcare infrastructure has not kept pace with the economy’s growth. such as ayurvedic medicine. Bihar. Manipur. For instance. which provide about 80% of public funding. Mizoram. The principal responsibility for public health funding lies with the state governments. While India has several centers of excellence in healthcare delivery. mostly through national health programs. The aim of the Mission is to provide effective healthcare to India’s rural population. Only 11% of the population has any form of health insurance coverage. the main provider is the government-run General Insurance Company (GIC). and more than half of existing laboratories are not properly equipped or staffed. These include Arunachal Pradesh. India needs 74. where two-thirds of India’s hospitals and health centers are located.Challenges in the Industry Deteriorating infrastructure . Chhattisgarh. The federal government contributes another 15%. and The United India Insurance Co. Sikkim. there are two sides of the country: the country with that provides high-quality medical care to middle-class Indians and medical tourists. which is practiced mainly in urban areas. at least they can access the limited number of government-support medical facilities that are available to them. Orissa. although foreigners are not allowed to own insurance companies. the government launched the National Rural Health Mission 2005-2012 in April 2005. at least 11 Indian states do not have laboratories for testing drugs. The federal government has begun taking steps to improve rural healthcare.A widespread lack of health insurance compounds the healthcare challenges that India faces. these facilities are limited in their ability to drive healthcare standards because of the poor condition of the infrastructure in the vast majority of the country. The physical infrastructure is woefully inadequate to meet today’s healthcare demands. Lack of Insurance . the health insurance schemes available to the Indian public are generally basic and inaccessible. GIC is able to obtain funds for underwriting from other countries. Jammu & Kashmir. Rajasthan. The healthcare divide – When it comes to healthcare. The New India Assurance Company. Tripura. Oriental Fire and Insurance Co.. While the rural poor are underserved. Assam. The number of public health facilities also is inadequate. National Insurance Co. and the country in which the majority of the population lives—a country whose residents have limited or no access to quality care. with a focus on 18 states that have low public health indicators and/or inadequate infrastructure. In addition. Madhya Pradesh.
due to substantial demand for high-quality and specialty healthcare services in these cities. Frontier Mediville.2%. Major healthcare players such as Fortis and Apollo are expanding to tier-II and tier-III cities.gradation and capacity enhancement of healthcare facilities.000 nurses and midwives during the last five years. rural health facilities etc. according to the report.000 health sub-centers and 28.15 billion for the up . according to a report by research firm RNCOS. Indian health insurance market represents one the fastest growing and second largest non-life insurance segment in the country. along with urban cities. The National Rural Health Mission (NHRM) had allocated US$ 10.107. The health insurance premium is expected to grow at a Compound Annual Growth rate (CAGR) of over 25 per cent for the period spanning from 2009-10 to 2013-14. according to the report. according to the Rural Health Survey Report 2011. Government Policies Government initiatives in the public health sector have recorded some noteworthy successes over time with focus on investments related to better medical infrastructure. The number of primary health centers has increased by 84 per cent. This will in turn reflect an increase in the GDP share to 6.Contribution to economy & Future Prospects Expenses incurred by the Indian Government on hospital industry are the highest among developing countries.25% of the GDP. is being set up by Frontier Lifeline Hospital at Elavoor. 100 per cent FDI is permitted for health and medical services under the automatic route. The rural health sector has added around 15. released by the Ministry of Health. Key developments in the recent times Rural healthcare sector in the country is witnessing an upsurge. Industry experts project a hike in hospital sector market from $53 billion to $73 billion in five years from now. The country’s first healthcare Special Economic Zone (SEZ). near Chennai. . taking the number to 20. India’s expenses on hospital sector comprise 5.
000 foreign patients per year (Medical Tourists).2 billion presently to $ 2. In 2004.000 medical tourists travelled to India in 2008 bringing in earnings of $ 900 million. Contribution to the economy Confederation of Indian Industry (C II) sponsored Mc Kinsey & Co. India has emerged as one of the world’s most cost-efficient medical tourism destinations. However. Up market private care in India to be worth from Rs.000 crores by 2012. It reports the following figures and facts 1. It is anticipated that Indian medical tourism market will register a CAGR of 27% during 2011-15.3 million medical tourists visit Asia / year Nos. 50. It also refers pejoratively to the practice of healthcare providers travelling internationally to deliver healthcare. It is estimated that by the year 2015.10. 50. and rich cultural heritage.000 crores by 2013.grew to 7. Health care spending in India has increased from Rs. have taken the Indian medical tourism to new heights. India has received 150.2 billion annually by 2013. It is expected to grow @ 10% annually in next 5 yrs.000 / year Over 5. government support.30000 crores to Rs. and thus. The adoption of the Public Private Partnership (PPP) Model by the Indian Government at both central and state levels to improve healthcare infrastructure in the country through expertise of private sector and better support of public sector provided the extra thrust to medical tourism. India will receive over half a million annual medical tourists annually. alternative treatments.000 medical tourists and this number has grown by a whopping 33% by 2008 to 200. The regulatory structure in connection to the medical tourism industry has been quite liberal and supportive in the country so far. study. 5000 crores to Rs. The annual growth rate of Medical Tourism in India in 2007 was 30% per year & in 2012 is projected at 40% per year India’s Tourist Industry could yield from $ 1. . $ 17 billion Indian Healthcare Industry contributes about 4% -5% of GDP. 00000 to 1.–“Healthcare in India: The Road Ahead” report. Individuals with rare genetic disorders may travel to another country where treatment of these conditions is better understood. attained a position among the global leaders. 100. of US patients seeking cheaper care abroad . improved healthcare infrastructure.000 inbound medical tourists. In the recent years. 000 crores per year. Medical Tourism revenue can potentially rise from Rs.10. 50. The size of Indian Medical Tourism sector estimated in 2002 to be min 1. Current Sector Analysis in India India was one of the first countries to recognize the potential of medical tourism and today is the leading destination for global medical tourists. convalescent care and even burial services are available in this industry. 200. low cost.Medical Tourism Introduction Medical tourism is a term initially coined by travel agencies and the mass media to describe the rapidly-growing practice of travelling across international borders to obtain health care. virtually every type of health care. including psychiatry.000 crores in 2007-2008 to over Rs.
700 Heart Valve Replacement Surgery India Thailand Singapore US/UK Cost $8. Most patients visit from SAARC countries.000 $10.500 $250.000 $2.156.000 $7.000 Comparison of various treatments in India & US Country/Cost Mental Free Dental Bridge Bone marrow transplant Cosmetic Surgery Spinal Fusion India $500 $30. United States of America and United Kingdom. Comparison of heart surgeries in various countries Heart Bypass Surgery India Thailand Singapore US/UK Cost $6. Private Health care share will form the largest of this @ Rs.000 $12.500 US $5.000 $62.983 $19.000 Medical Tourism Structure in India .000 $5.500 $20.894 $23. 000 crores and growth will be driven by rising life style diseases.000 $10. Planning Commission report Government is planning to provide ‘M’ Visa to Medical Tourists on priority.
USA. . The governance of Medical Education in India is routed through various councils in respective systems. IVF. there is a growing awareness of the role of health development as a vital component of socio-economic development. The modern system of medicine [allopathy. In India. The Indian medical education sector is broadly classified into: 1. Every year the respective councils primarily monitor and timely inspect all universities or colleges that give medical education. Indian systems of medicine and homeopathy (ISMH) that include Ayurveda. Canada. Siddha and homeopathy. South East Asian countries has to be formed Medical Tourism Facility Managers has to be appointed in Europe. Middle East and South East Asia for networking with foreign hospitals & Consultants for patient reference on profit sharing per patient basis. Cosmetic Surgery. Unani. In a nutshell the councils prescribe and recognize all standards of education in Modern and Indian Systems of Medicine. Dental Surgery has to be published Rates of all procedures in all International / International Magazines.Future promotion Aggressive marketing & awareness of various medical programs in India has to be done globally Details of Indian Corporate Hospitals with core competencies – eg Cardiac Surgery – J R Surgery. magazines & News Papers of the World has to be advertised Indian Medical Tourism Corporation Branches has to be set up globally Health Insurance for medical treatment in India has to be implemented Regular Chartered Medical Tourism must be available for medical tourists Corporate Hospitals Medical Tourism Consortium with front offices in UK. journals. They allow colleges or universities to grant various degree or diploma provided they are strictly adhering to the standards set by the respective councils. Middle East. or non-Indian system of medicine (NISM)] 2. Medical Education Introduction Medical education occupies a crucial position as it involves a close and deep study of life itself and its vital processes.
There are super-specialty residency programs for those completing postgraduate education.B.D. M.S. Doctors possessing M. Post-graduate training includes 3-year residency program and diploma training program. and M.S. provides basic training in clinical medicine over 5.S.5 years. are super-specialty programs in medicine. The MBBS course is of four and a half years and is followed by one year of Compulsory Rotating Residential Internship. (Master of Surgery) are 3-year postgraduate degree programs in medicine and surgery respectively. degree are eligible for these courses.D.All these councils are autonomous bodies under the Ministry of Health and Family Welfare MBBS Degree The undergraduate degree. D.B. or M. Doctors possessing M. These programs duration vary from 2 to 3 years. referred to as MBBS (Bachelor of Medicine and Bachelor of Surgery). degrees are eligible for the courses State wise distribution of colleges and their annual intake in 2011 . (Doctor of Medicine) and M.M.Ch.
Post Graduate training includes Master of Dental Surgery (MDS).B.Source: http://www.asp Percentage share of public and private medical colleges offering M.S courses in India in 2011 Source .mciindia. there are 215 dental colleges offering BDS and 121 dental colleges offering MDS Number of colleges offering BDS and MDS courses in 2011 .B. In India. thus making it a five year course.mciindia.org/apps/search/show_colleges.asp BDS Degree Dental Education in India starts with the Bachelor of Dental Surgery (BDS) which is a four year course with one year of compulsory rotary internship.org/apps/search/show_colleges.http://www.
: Post Basic B. in Homeopathy. S. H. (Bachelor of Homoeopathic Medicine & Surgery). Analysis of the Medical education sector .Sc Indian systems of medicine and homeopathy (ISMH) that include Ayurveda.Number of colleges in 2011 BDS MDS 170 75 14 19 Public Private http://www. A. Unani. There are 98 ayurvedic colleges.Sc Number of colleges offering various courses 1800 1600 1400 1200 1000 800 600 400 200 0 ANM B. Post graduate courses include M. M.Sc.Sc GNM M. The course duration is 5½ years including one year of compulsory internship. PB B.org/apps/search/show_colleges. 8 Siddha colleges and 40 unani colleges in India offering different degree and diploma courses. Siddha and homeopathy is provided by offering degrees like B.Sc PB B.mciindia.asp Nursing and midwifery programs Number of Institutes offering the respective nursing programs in India in 2008. (Bachelor of Ayurvedic Medicine and Surgery) and B. GNM: General Nursing and Midwifery.D. M. ANM: Auxiliary Nurse and Midwife. S.
The increasing use of sophisticated equipment has highlighted the need for close collaboration with engineering. there are serious questions about the training doctors receive in terms of its utility for different categories of diseases and. both by the people and their representatives. equally important. The promotion of medical colleges in the smaller cities in the districts has not made much of an impact on the distribution of medical manpower. An Escorts Heart Institute and Research Centre document prepared in 2005 said India would need at least one million more qualified nurses and 500. had suggested one doctor for 1.000 more doctors by 2012. The root cause of our problem arises from a mistake. There is a big gap in the distribution of health care personnel over rural and urban areas. changes in the curriculum have to be brought about in a more rational way by assessing our own needs. say for a family doctor. This would cover the big gap now seen between the undergraduate course and specialties. the socio-economic groups. a geographical region has its own problems.124 positions have been filled.600people. In a way.617 positions have been sanctioned and 4. This obsession with the Western model and standards has made our products misfits in our own society and perhaps unwittingly promoted brain drain. And.172. We have tinkered long enough with the curriculum and contents of the course. But we have never considered the suitability of a single uniform course when it is known that the final evolution as a General Practitioner or a Specialist or a Scientist requires different courses at the undergraduate level itself. The truth is that the medical graduate finds himself more at home outside the country than at home. This leads to frustration and thus the westward flood. Three such broad channels can be identified. a committee headed by Joseph Bhore. and within each country. The main criticism is that of neglect of rural and remote areas and overproduction of highly trained persons with no corresponding increase in gainful employment. In 1946. physicians and pediatricians in 2001 for community health centers in rural areas is 12. but only 6. delivery to different categories of people. The current availability of doctors does not meet the recommendations of several past committees. There is a growing interaction of medical education with social sciences by introduction of Psychology and Psychiatry in teaching hospitals. As far as specialists are concerned.000. The products of these colleges are more hard-hit and the result is brain drain within the country.000 people. the specialist and the health scientist. It is time to consider the feasibility of multichannel courses to suit different groups. resulting in a large number of specialists and an equally impressive number of super-specialists. This has been largely unplanned and has only resulted in a marked increase in output without any thought for finding rewarding careers for them. as the main concern seem to be to make quantitative changes. The government’s estimated requirement of specialist surgeons. Every country. There is a tenfold increase in the number of medical colleges and the output of doctors. the .Changes have been brought though not very speedily and effectively. So. which perhaps suited the English situation. obstetricians and gynecologists. the situation on the ground comes nowhere near meeting this figure. This was the blind imitation of the Western model. therefore. electronic and computer sciences In spite of all this change and expansion. we do find a lot of dissatisfaction expressed. another committee in 1948 had recommended one doctor for 1. Research joint panel had recommended in 1980 that six general practitioners and three specialists should be available for 100. The overflow from the cities has always been to the west and now the flow is towards the African and Gulf countries.
the Government is now looking at allowing corporate entities to venture into medical. With a view to increase the skill set base. The disease patterns and prevalence rates also determine the needs. Changes and reorientation should be brought about to make the education relevant to the needs of the largest group. nursing and paramedical education. The healthcare manpower added every year is not sufficient to keep pace with the growing healthcare demand today. Challenges in Medical Education Insufficient seats both at graduate and post graduate level Inadequate infrastructure Lack of qualified faculty base Outdated curriculum Inadequate exposure to technology No mechanism to monitor continuous medical education What are the Entry Barriers for Corporates? As of now.000 post graduate seats are available. To fulfill the additional requirement of health manpower. With this small annual medical manpower entering the mainstream. and only 12. Emergence of AMC Model . There are broadly the medical needs of an individual and a community. it is essential to explore a range of partnership/collaboration options with the private/corporate sector. we must provide and add care of well defined populations so that the medical student knows how to be useful to the community at large. India produces over 30. The quality and density of health work has a direct correlation with the positive health outcomes of any country. and the mental health needs.000 medical graduates every year from over 290 medical colleges. Proper vocational guidance should be made available to the medical graduate. only trusts and societies in private sector are entitled to establish a medical college There is a statutory requirement for a single plot of 25 acres of land for establishment of medical college Annual seats for the students for graduate and post graduate courses needs to be optimized Future prospects Corporatization of Medical Education: The Impact One of the pivotal factors to sustain the projected growth of the healthcare industry in India will be the availability of a trained healthcare workforce. Perhaps. Maximum improvement of health and relief form suffering within available resources should be our goal. There is thus a clear need to set up innovative models and bring about qualitative changes. so that reliable data and rationale thinking precede the choice of future career. To the traditional approach of how to provide clinical cure for individuals. one can only imagine the lamentable gap between the educational capacities in this sector versus the requirements. we might even think of a larger share and inputs in public health so that such a career becomes attractive. Excellence in medical education should not mean merely vertical expansion and achievements.rural-urban settings and other parameters differ from country to country and from state to state.
pregnancy tests. material or other article. replacement. The limited healthcare facilities available in the country are skewed more in favor of the affluent category of population. software. spectacles and contact lenses. equipments as well as consumables/ supplies) that are intended by its manufacturer to be used specifically for diagnostic and/or therapeutic purposes. dental floss. the supply of healthcare services falls significantly short of the demand. It encompasses any instrument. for the following purposes diagnosis. Medical Equipment services Introduction There are varied definitions of what constitutes ‘medical technology’. Wheelchairs. at the doctor’s. In the second most populous country of the world. nurses and paramedics. treatment or alleviation of disease diagnosis. monitoring. which is used. syringes. the term medical technology encompasses a wide range of healthcare products (devices. and attracts international medical tourists in growing numbers. According to EUCOMED (the European medical technology industry association) “Medical technology extends and improves life. clinics and technologies. insulin pens. at hospital and in nursing homes. oxygen masks. MRI scanners. Incessant medical technology innovation enhances the quality and effectiveness of care. alleviation of or compensation for an injury investigation. injury and handicap. condoms. implant. . better training and research. apparatus. in vitro reagent. appliance. orthopaedic shoes. Billions of patients worldwide depend on medical technology at home. Such an integrated clinical setting facilitates delivery of high quality care. the healthcare industry is now looking at this model with a hope. At the high end. alone or in combination. surgical instruments. bandages. For the purpose of this report. modification or support of the anatomy or of a physiological process supporting or sustaining life control of conception disinfection of medical devices providing information for medical or diagnostic purposes by means of in vitro examination of specimens derived from the human body Medical technology improves health outcomes Medical technology plays a strategic role in fostering the change of health care delivery towards better health outcomes. It alleviates pain.” Need for Medical Technology in India There can be no better example than India to illustrate the need for medical technology for improving healthcare delivery. life-support machines: more than 500. pacemakers. prevention. Existing health care delivery mechanisms are inadequate to meet the ever growing needs of the Indian population. Such settings also help attract the best talent pool by offering them a broader perspective to their work. monitoring.000 generic groups) are available today. This gives it a distinct edge over stand alone medical colleges. direct patient care & education facilities. India has world-class doctors. Considering the huge shortfall of doctors.The Government’s initiatives and changing guidelines will spur the growth of Academic Medical Centers (AMCs) in future. hip prostheses. especially in smaller towns/ rural areas.000 products (10. Its role in healthcare is essential. treatment. AMCs are the conglomeration of research.
2. India accounted for 117.highest number of diabetics in the world. Growing non-communicable diseases (NCDs) . 3.needles and Catheters Electromedical 10% 20% 12% X-Ray Apparatus Bandages and other medical supplies Others 10% Sector Analysis in India . Innovative products and business models are needed to make healthcare affordable and accessible to a larger percentage of the population. which is more than double that of China (23 per 1000 births) and even higher than Bangladesh (54 per 1000 births). Poor healthcare infrastructure. the majority of India’s population cannot afford anything better than the most basic healthcare. Low health insurance coverage (estimated at less than 10% of population) makes matters even worse.However. For every 10. Of the 536. UK has 166 and US has 548. Further. India has the highest burden of communicable diseases in the world. Australia has 249. Good quality private healthcare is out of reach for majority of India’s people. there are 6 doctors while China has 20 doctors for every 10. IMR (Infant Mortality Rate) for India is 58 per 1000 births. even today. There is a need to use medical technology effectively to address the yawning gap between demand and supply of healthcare services in India. This is illustrated by the following facts: 1. 4.000 women who died during pregnancy or after childbirth in 2005 globally. doctors and hospitals are largely concentrated in cities. while majority of the population resides in rural areas. Government support/ subsidies alone are not enough to cater to the healthcare needs of this segment of the population.000 Indians.000 (or 22%). Market structure and analysis Market Structure 15% 25% 8% Medical Instruments and Appliances Orthopaedic/Prosthetic Goods Syringes. with malaria and tuberculosis among the leading causes of death. along with a large population and high poverty levels has resulted in a dismal status of people’s health.000 people. Accessibility is restricted by shortage of healthcare facilities and professionals.
9 billion in 2009 to US$3 billion in 2010. However. This segment accounts for 25% of the total market. establish subsidiaries or employ local agents to distribute their products. in recent years. Other estimates of the market size range from US$1. MNCs seeking to enter the industry typically form joint ventures with local manufacturers. followed by orthopaedic / prosthetic goods segment accounting for 20% of the total market. increasingly these companies are moving away from the practice of importing through local agents and setting up subsidiaries. However. over 25 foreign medical device companies received licenses to import medical devices in India through their subsidiaries. with the ‘other’ segment witnessing the highest growth. high tech Indian products are very low compared to other developing countries Key growth drivers for medical technology in India Changing Medical Technology Landscape Faster up-gradation of existing technology and global new product innovation Evolution of India as a medical tourism hub leading to demand for world class equipments Growing awareness amongst providers & consumers on advancements in medical technology Improving Healthcare Delivery & Financing Increasing competition with the advent of large private sector healthcare providers . and MNCs primarily importing high end medical equipments. medical devices. High imports High end medical technology products are largely imported into India. However. The market is estimated to reach US$5 billion* by 2012 with an annual growth rate of nearly 15%. imports constitute about 75% of the Indian medical technology market. breathing and respiration apparatus. in 2007. the exports of high quality. though some of them have set up manufacturing operations in India. enjoying an annual average growth rate of over 30%. Majority of the Indian medical technology market is dominated by medical instruments and appliances used in specialties such as ophthalmic. nearly 60% of what’s being manufactured is being exported. orthopaedic and prosthetic appliances.The medical technology market in India was valued at US$2.75 billion* in 2008. diagnostic kits represent one of the fastest growing segments of the medical technology industry in India. Most MNCs are involved in distribution of medical technology products. According to industry sources. Infact. Key categories of items that are imported into India include imaging equipment. at the same time. In fact some companies derive as much as 75% of their revenue from exports.presence of MNCs & Domestic firms The Indian medical technology industry is highly competitive and fragmented. The ‘other’ segment includes endoscopy equipment. this industry has not been well documented in the Indian context. and estimates of industry size and growth vary significantly across different sources. However. pacemakers. some domestic firms have expanded local manufacturing operations to produce cost effective. cardiovascular control equipment and healthcare IT equipment etc Estimated growth rates for the key market segments during 2008-12 range between 14-20%*. and dental equipment. Competitive market. medium end. a growth of approximately 14% over 2007. dental and other physiological classes. Though not identified as a separate segment in the above pie chart. with domestic firms primarily manufacturing low technology products such as disposables/ medical supplies. It is interesting to note that while India’s medical technology industry is primarily import dependent.
opt for cheaper products. In India 0. As a result access to healthcare is inadequate or absent in rural India. The per capita spend on medical technology in India is approximately US$2. There is a huge gap between the needs of the Indian consumer and what is available in the market.000 units per year. Consequently. Public health infrastructure is inefficient and inadequate too. the concept of Self Monitoring Blood Sugar (SMBG) is still not well-known in India as compared to the West. Accessibility Inequitable access to healthcare delivery has been a key issue with the Indian healthcare system. and that too in select pockets of the country. owing mainly to lack of affordability. Availability Lack of innovation has resulted in scarcity of cost-effective products and solutions in the medical technology industry. At present. demand comes primarily from major cities. While the medical technology industry is growing rapidly in India. with low investments in medical infrastructure. . Awareness While there is growing awareness towards health related issues in the major cities. One example to illustrate low penetration is sales of pacemakers. as compared to US$5 for China and US$231 for Germany. India’s pacemaker penetration is just 1% of western levels.3% of diabetics use SMBG as opposed to almost 22% in developed countries. Affordability Since most of the country’ population cannot afford to pay for healthcare. awareness and availability. there are a limited number of such options available. The challenge is to expand the market. accessibility. At 18. Many of them do not have high end products as they cannot afford it. Penetration in smaller cities/towns/rural areas remains low. providers in turn pay careful attention to costs in making their purchasing decisions. including devices and equipments. most smaller hospitals particularly those in Tier II and III cities and rural areas. For example. a large part of India’s population remains ignorant about the latest advancements in medical technology. the industry is plagued by low penetration. distribution of medical technology in these areas becomes a challenging task. while big hospitals in Tier I cities are typically driven by quality while purchasing medical devices and equipments. For example. Increasing trend of seeking accreditation leading to rise in technology investments Rising health insurance leading to increased coverage of high cost treatment Changing Patient Profile Increased life expectancy and aging population Increasing incidence of lifestyle / non communicable diseases Rising purchasing power / disposable income Key challenges Low penetration Despite the strong growth of the Indian medical technology market in the last few years.
and coverage under the Drugs and Cosmetics Act has resulted in lack of clarity and transparency about the regulations. Unlike China. There are no specific incentives in place to attract local or foreign companies to set up a production base in India. which encourages manufacturing of medical devices and equipments. Lack of incentives The government has not been proactive in encouraging the development of a domestic manufacturing industry. As a result. the overall market remains small due to low penetration.g. It is currently regulated by the drug controller general of India (DCGI) of the Central Drugs Standard Control Organization (CDSCO). the industry members need to work hand-in-hand with the government . Complex rules and guidelines Absence of specific regulation for the industry. product registration and manufacturing standards intended for drugs are applied to the manufacture of devices – e. creating wider gaps of quality and cost within the same category of products. illegal reprocessing and re-packaging of used syringes for re-sale. as well as inconsistent interpretation and application of the regulatory guidelines by customs officials at the ports. There are problems pertaining to multiple levels of government authority involved in enforcing the guidelines. Low indigenous manufacturing India has not been able to develop itself as a strong manufacturing base for medical technology. reducing the competitiveness and growth potential of the local medical technology industry.)under the Drugs and Cosmetics Act 1940 and subsequent amendments.Ambiguous regulatory environment The regulatory environment for medical technology in India is ambiguous. and setting up a manufacturing plant requires significant investment.g. This results in a prolonged and cumbersome regulatory pathway. and officials within CDSCO. orthopaedic implants etc. the current duty structure for medical devices and equipments favours imports. cardiac stents. Future prospects The government is the most important contributor in developing a conducive environment for growth of medical technology industry in India. The industry remains dependent on imports for meeting its domestic requirements. as described below. In certain cases. it is insisted that an expiry date be given on certain medical devices. Further. Absence of quality standards Lack of regulation of the industry has resulted in products of sub-standard quality being brought into the market. There have been some cases of illegal/ counterfeit products also – e. Department of Health. While the industry is on a high growth trajectory in India. There are two key issues pertaining to regulation of the medical technology industry in India: No distinct status for the industry The medical technology industry in India has no separate legal status. This creates significant risk for the consumer. At the same time. The limited regulation that has been introduced to date covers 14 medical devices (e. whereas this is not required for such products. especially for new products. complex and lacks transparency. volumes are low and do not provide economies of scale for most manufacturers. state drug controllers. High capital requirement Medical technology is capital intensive. Application of the Drugs and Cosmetics Act has resulted in redundant rules for medical devices and equipments in India. Indian laws indirectly reward trading by charging higher duties on raw materials than on finished goods. catheters.g. There are two key factors contributing towards this trend.
g. educational institutes etc. Establish ‘medical technology clusters’ that will include not only industry members but also R&D centres. There are certain expectations from both the government as well as the industry in order for the medical technology industry to achieve sustainable growth. Collaborate with healthcare providers to promote training and education of physicians and other technical personnel in the area of medical technology through continuing medical education (CME) Involve healthcare providers in the innovation process – e.to encourage innovation. share industry best practices and encourage of overall development of the industry Engage with insurance providers to expand health insurance coverage for medical technology products .g. associate with physicians for obtaining specific inputs on product development Strengthen industry network / association to promote awareness about innovations. develop training institutes etc. Way forward – Government Create a separate regulatory framework dealing with specific requirements of the medical technology industry Provide incentives for domestic manufacturing. develop training institutes etc. such as tax holidays and low customs duties on imported raw materials Create and enforce quality standards in tune with the relevant global standards for medical technology Enter into public private partnerships with medical technology companies and healthcare providers for implementing cost effective models of healthcare delivery Encourage relevant R&D through Financial support to companies for product development and commercialization Development of local R&D capabilities – e. and will foster high levels of productivity and collaboration Create a central authority for holistic development of the medical technology industry in India – the authority should look at non-regulatory / commercial aspects of the industry that will drive growth Way forward – Industry Increase R&D activity geared towards developing products suited to the Indian market Collaborate with ICT companies to bring to fruition frugal approaches to innovation Partner with government and healthcare providers to reach out to the masses through affordable healthcare delivery models Engage with the government and academia to develop relevant courses that will develop required skill base for the industry. establishment of research centres – and industry participation in the same Engage with the academia to develop relevant courses that will develop the required skill base for the industry.
Traditionally. etc. skills and resources. which tracks drug sales in the country through a network of nationwide drug distributors. Gujarat. Pondicherry and Karnataka. educated and skilled manpower and cheap labor force among others and the introduction of GCP. India is also the third-largest market in the world in terms of volume and fourteenth in terms of value The pharmaceutical industry in India is among the most highly organized sectors. Andhra Pradesh.5-1. However.Ray founded Bengal Chemicals and Pharmaceuticals Works Ltd.Pharmaceutical industry Introduction Drugs and pharmaceutical industry plays a vital role in the economic development of a nation. development. pharmaceutical manufacturing clusters in India were limited to few Indian states such as Andhra Pradesh. Maharashtra and Goa.5 per cent till the year 2015.GLP and GMP. Maharashtra. Goa. Goa. and its market size has nearly doubled since 2005. The primary factors which attributed to this movement are space constrains. environmental issues and special incentives offered by few developing states such as Himachal Pradesh.C. the industry is set to scale new heights in the fields of production. Tamil Nadu.000 generic brands across 60 therapeutic categories. India accounts for 8 per cent of global pharmaceutical production. IMS Health India. Due to the presence of low cost manufacturing facilities. Mumbai. Further. Visakhapatnam (Vizag) in Andhra Pradesh is the upcoming bulk drug cluster that has generated significant interest in the APIs players. the domestic Pharma market in India was expected to be US$ 10. Pune and Hyderabad have been the . It started by making drugs from indigenous materials and then went on to manufacture quality chemicals.9 per cent until 2010 and subsequently at 9.C. Manufacturing Infrastructure of Pharma industry Congregative settlement tendencies of pharmaceutical units have led to the evolution of defined manufacturing and R&D clusters in the country. estimates the healthcare market in India to reach US$ 31. Acharya P. pharmaceuticals and employed local technology.Ray. drugs. The pharma industry generally grows at about 1. In the year 1901.76 billion and this is likely to increase at a compound annual growth rate of 9. India is one of the fastest-growing pharmaceutical markets in the world. Traditional bulk drug clusters are located primarily in Gujarat. manufacturing and research.59 billion by 2020 History and Origin The architect of the Indian pharmaceutical industry would be Acharya P. Indian firms produce about 60. in the past decade new clusters have emerged across the country and have witnessed significant movement of pharmaceutical units to these locations.6 times the Gross Domestic Product growth. Uttarakhand. In 2008.
coupled with well developed physical and social infrastructure of tier-I cities has been the key reason for the development of knowledge intensive R&D clusters in these regions. attracting formulation manufacturers from across the country due to fiscal incentives offered by the Government.India is the third-largest player in the world with 500 different APIs Market Structure I V Fluids 1% Multinational 9% Indian Formulations 9% Indian .preferred destinations for formulation players in the past. Baddi in Himachal Pradesh and Pantnagar and Haridwar in the state of Uttarakhand are the upcoming formulation clusters.Bulk Drugs 22% Gelatin Capsules 0% Indian .Bulk Drugs & Formln M/S 14% Indian . High quality life.Bulk Drugs & Formln Lrg 45% . Market Segments in Pharmaceutical Industry Contact Research and Manufacturing services (CRAMS) .India is a fast-growing CMO and custom research outsourcing (CRO) destination with a growth rate for CMO thrice the global market rate Formulations .000 packs across 60 therapy areas Active pharmaceutical ingredients – APIs . The R&D clusters have followed a similar development pattern. Apart from the National Capital Region (NCR).India’s manufacturing prowess in formulations is validated by the fact that it manufactures 60. However. other R&D clusters have been limited to the established pharmaceutical regions in the country.
Break up of sales of Indian Pharma Indsutry Domestic Retail Market Exports Institutional Sales 9% 48% 43% Multinational Market Share Fulford (India) Solvay Pharma. 2% 4% Astrazeneca Phar 6% Abbott India 14% Wyeth 6% Merck 7% Novartis India 8% Glaxosmit Pharma 28% Pfizer 11% Aventis Pharma 14% .
76 503.00 3.708.00 0. Mov.853.73 3.1 209. Mov.608. (2010) .02 1.49 525.854.67 Sales Turnover Reported Net Profit R&D expenditure over 10 years in pharma industry by Major Players 700 600 500 400 300 200 100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2 per.Sales Turn over and Net Profit 6.00 1.000.37 5.148.000. (2001) 2 per.000.000.00 4.00 2.593.65 207.425.268.00 5.80 5.82 1.03 2. Mov.58 2.000. (2005) 2 per.000. Avg.22 1.21 1.19 443.3 846.58 1.00 -1.00 -2.68 4.00 -794.28 898.543.000.Analysis of Major Players in Indian pharmaceutical industry .000.90 1.411.568. Avg. Avg.081.
Two new schemes namely. material costs. Export and Import of pharma Industry Government Initiatives The government of India has undertaken several including policy initiatives and tax breaks for the growth of the pharmaceutical business in India. The Material cost. New Millennium Indian Technology Leadership Initiative and the Drugs and Pharmaceuticals Research Program have been launched by the Government. trade discounts. On the other hand. increase in exports which enabled procurement of raw materials in large quantities and hence at low prices and finally due to increase in production efficiencies. accounting for close to 70% of the operating income.Cost Structure/Performance indicators in Indian pharma Industry The pharmaceutical industry is characterized by low fixed asset intensity and high working capital intensity. and freight and forwarding costs have increased in the past few years owing to the increase in emphasis on sales of formulations. which account for almost 50% of the operating cost have declined owing to the decrease in prices of bulk drugs and intermediates. advertising and distributing costs. Some of the measures adopted are: Pharmaceutical units are eligible for weighted tax reduction at 150% for the research and development expenditure obtained. Marketing and selling cost and Manpower Cost constitute the three major cost elements for the Indian pharmaceutical industry. In the past 6-7 years. the marketing and selling expenses. The Government is contemplating the creation of SRV or special purpose vehicles with an insurance cover to be used for funding new drug research Exports of top 8 pharma companies (10 year growth) 4000 3500 3000 2500 2000 1500 1000 500 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Torrent Pharmaceuticals Ltd Aurobindo Pharma Ltd Cipla Ltd Piramal Healthcare Ltd Ranbaxy Laboratories Ltd Wockhardt Ltd . comprising of promotional expenses.
Imports – Countries JAPAN 1% NETHERLAND INDONESIA 1% 2% Others IRELAND 8% 3% UK 4% KOREA RP 1% BELGIUM 4% DENMARK 4% FRANCE 4% CHINA P RP 5% Import to India SWITZERLAND 33% ITALY 6% GERMANY 9% USA 15% Foreign Investments in the Country Mauritius USA UK Singapore South Africa Cayman Island Germany Switzerland Belgium Italy Others .
• US drug maker Mylan Inc. Improvement in Quality Standards. Increase in Return on Capital Employed . 1956 The Drugs (Prices Control) Order 1995 (under the Essential Commodities Act) Future growth . 1954 The Narcotic Drugs and Psychotropic Substances Act. Reduction in Imports. Indian drug industry has in the last five years seen half a dozen big takeovers by foreign companies. paid $734 million to acquire Hyderabad-based Matrix Laboratories in 2006. Increase in Exports.6 billion acquisition of promoters’ stake in Ranbaxy Laboratories in 2008 by Japan’s Daiichi Sankyo Co. 1948 The Drugs and Magic Remedies (Objectionable Advertisement) Act.72 billion to acquire Piramal Healthcare Ltd’s domestic drug formulation business and spent $726 million to buy out Ahmedabad-based consumer health company Paras Pharmaceuticals. Ltd.Impact of foreign Investments Major impact of foreign collaborations had been in the areas like Technological Developments---R&D & New Product Development. 1940 The Pharmacy Act. • $3. 1985 The Medicinal and Toilet Preparations (Excise Duties) Act. • German health care group Fresenius SE spent $219 million to take over Dabur Pharma in 2008 • US drug and nutrition firm Abbott Laboratories paid $3. Productivity Enhancement. Enhancing Marketing Base (Domestic & International) and overall Profitability. Decrease in Net Foreign Exchange Outflow. • French drug multinational Sanofi-Aventis SA acquired a majority stake in Indian vaccines company Shanta Biotech in 2009 for €550 million Laws pertaining to manufacture and sales of drugs in india • • • • • • The Drugs and Cosmetics Act.
In particular. and to determine and monitor appropriate therapies. The laboratory must have policies and procedures for ensuring the protection of confidential information. scientific. tissues or remains with due respect. timely. and equitable. pre-empt. it is no surprise that deterioration in the quality of pathology services can compromise patient care and lead to adverse health events. technical and support staff who have appropriate qualifications. diagnose and monitor disease. It has been estimated that pathology investigations feature in up to 70% of diagnoses.Pathology Labs Introduction Pathology testing is used to predict. efficient. making this a foundation stone of modern health care. There are six core aims for health care services – that they be safe. This dependence on pathology testing will increase in the genomic medicine era and genetic testing will change the patterns of disease in our society. In particular. the scope of pathology and the integral role it plays in all areas of medicine are not well recognized even by some of those working in health care environments. This has been demonstrated recently in Canada. The ‘hidden’ nature of pathology. The laboratory must have policies and procedures to ensure that staff treat human samples. The quality system must embody the requirements of International Organization for Standardization (ISO) 15189:2003. However pathology is perhaps the least understood of the medical specialties. means that it has frequently been omitted from health system planning processes. patient-centered. with timely turnaround for obtaining results. As pathology is pivotal to health care. or worse still targeted for funding cuts Maintaining the quality and safety of pathology services is crucial to the efficient delivery of health care. being undertaken largely in laboratories that other health workers never see. pathology testing is effective and efficient. effective. where wide-ranging investigations are underway into adverse patient outcomes that stem directly from an inadequately resourced and manned pathology system with a very poor quality framework. Bulkbilling rates of over 85% make access to tests listed on the Medicare schedule highly equitable. . training and experience relevant to the scope of the testing performed. Requirements for Pathology labs Laboratories Ethics The wellbeing of patients and confidentiality of patient information must be primary considerations in the operation of a pathology service. Quality Standards The organization must employ a quality system to ensure that the services provided meet required standards for good medical laboratory practice. supervision and consultation There must be sufficient pathology. Staffing.
Aspects to be considered are: (a) Handling of specimens (b) Handling of hazardous substances (c) Performance of laboratory testing (d) Functioning and maintenance of equipment (e) Storage of reagents (f ) Storage of blood and blood products where required (g) Storage of specimens and records (h) Undertaking of administrative duties. scientists and other appropriate staff must participate in continuing professional development. The laboratory must ensure the integrity of the specimen appropriate to the proposed testing. . The laboratory must be able to track the specimen and procedures performed at all times. Pre-Analytical Phase The laboratory service must ensure that there is information available for requesting practitioners and patients on the services that are available. Pathology Testing in India According to Cygnus estimates.87 billion in FY2011. Collection of specimens must be performed in appropriate facilities and under appropriate conditions using protocols that ensure accurate identification of the patient and labeling of samples. participate and perform to an acceptable standard in external proficiency testing programs that cover all test methods performed in the laboratory where such programs are available. Facilities The laboratory must have sufficient space and appropriate facilities for the satisfactory provision of the laboratory service. Post Analytical Phase Reports commensurate with good medical laboratory practice and patient care must be provided to the requesting practitioner. are classified into high-end labs. Laboratories must be continuously enrolled. the Indian diagnostic and pathological labs test services market was valued at Rs66. Pathologists. Services provided must be in response to a documented request identifying the patient. Indian diagnostics and pathological labs. based on the working level. the tests requested and appropriate clinical information. Analytical phase The procedures and the analytical performance must be appropriate for the clinical application of the results. Audit and assessment A pathology service must audit its operations as part of the quality system in order to determine compliance of the service with current regulatory and accreditation requirements. the requesting practitioner.
which includes immunology and haematology. reflecting a CAGR of 18. is expected to reach Rs159. microbiology and coagulation. Seventy seven per cent of the market is contributed by biochemistry and clinical pathology. Dr Lal's Pathology.accounting for 38% of the market share. the major share is held by biochemistry (38%). in view of its growth potential. By therapeutic segment. urine routine.9% during FY09-FY13. Expenditure on pathology Current expenditure for pathology is more than $2 billion per annum . critical care. According to the estimates. opportunities and challenges for the labs.8%).89 billion by FY2013. followed by immunology (23%). others. haematology (15. the Indian diagnostics and labs test services. Piramal Diagnostics (formerly Wellspring). Applications of molecular diagnostic testing will revolutionise clinical practices with major implications. manual labs (28%) and second-level regional labs (34%). Thyrocare and Anand Labs. The major players in diagnostics and pathological test labs market are: Metropolis Religare SRL Diagnostics.
Pathology as proportion of medical services Medical Services 2010/2011 2% 3% 0% 0% 3% 6% Primary Care Allied Health Specialized service Obstetrics 40% Anaesthetics Pathology D.I 34% Operations Ass at Ops Optometry 8% 1% 0% 3% Rad RX and Nuclear Med Miscellaneous Pathology as proportion of medical benefits Medical Benefits 2011 0% 2% 0% 1% Primary Care 8% Allied Health Specialized services 8% 32% Obstetrics Anaesthetics Pathology D. 14% Operations Ass at Ops 7% 13% 11% 2% 3% Optometry Rad.Rx & Nuclear Med Miscellaneous Dental .I.
The rate of growth in pathology ordering by specialists has shown relatively constant growth. Pathology and demographics Pathology tests in the last 12 months 80% 70% 60% 50% 40% 30% 20% 10% 0% 15-24 25-34 35-44 45-54 55-64 65-74 above 75 all Male Female .5% for the last year. at 5.
(based on poll comprising of PE and VC firms. the medical devices market is estimated to grow at 23. Employ information technology that facilitates the operation and management of the laboratory system and the delivery and management of healthcare.9 percent from FY 09-13. international tie ups and the demand created by insurance industry will similarly aid diagnostic players to deliver world class services. Use clinical outcomes as a primary measure of laboratory service efficacy. Coordinate the laboratory service delivery within health regions provincially and between hub and spoke laboratories Employ various strategies. no research agency involved). . According to a survey conducted in April-May 2011.5 across 60 private equity and venture capital firms.2 percent. as well as insurance companies. Utilise the systems approach to quality management issues and will foster the training. recruitment and retention of human resources within the laboratory system in order to pursue excellence. Deliver quality services that are responsive and sustainable. appropriate automations and standardisation (common laboratory information systems). followed by medical devices/equipment.GDP contribution of Pathology labs The diagnostics and pathological lab test market has the potential to grow at a CAGR of 18. the most attractive sector for investment across the healthcare industry was identified as Diagnostic services. enabling integration of community and hospital care and will increase the quality of care in patient outcomes through the integration of laboratory practice with the delivery of patient care. while on the other hand.e. Information technology will feature very prominently in laboratories in the year 2025. i. (as per Cygnus business consulting & research pvt ltd). The laboratory system of the future will: Focus on patients. to achieve cost effectiveness while attending to patient. clinician and systems needs. for the same. over the same period. Future Imminent consolidation. Indian CROs (contract research organizations) are giving diagnostic majors an opportunity to tap into the USD 10 billion global market for clinical trials. selected consolidation of testing. Diagnostic majors are already partnering with American and British hospitals.
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