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MME Project Group 3
Introduction 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. Hospitals
b. Medical Tourism
c. Medical Education
d. Medical Equipment services
e. Pharma Industry
f. Pathology Labs
Classification
Sector – The following parameters are being discussed in the sector analysis of each category
1. Brief Introduction
2. Current Sector Analysis in India
3. Contribution to the economy and growth
4. Future prospects
HOSPITALS
Introduction
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. General
b. Specialized
c. Teaching
d. Clinics
e. 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.
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
2002 2012 2017 2022
Industry Value in US$ Billion 36 70 145 280
0
50
100
150
200
250
300
US
$ B
illio
n
Industry Value in US$ Billion
become one of the favorite for health care treatments.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, others followed. There has been a large gap after first corporate
hospital and the trend of corporatization in India. Today industry is moving rapidly towards organized sector and more
so towards corporatization of healthcare delivery.
Last 2 year (i.e. 2010 & 2011) have been years of dramatic changes. 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.
Hospital Groups
Number of
Locations
Number of
Hospitals
Number of beds
*1000
Apollo Hospitals Enterprise limited 11 11 3
Wockhardt Hospitals 8 10 1.4
Fortis Healthcare 5 13 1.8
Manipal Health care 9 11 3
Care Hospitals 11 14 2
Factors Contributing for the Hospital Industry boom in India
Strong Indian Economy - The following graph shows the growth rate of GDP over past 5 years. It can be
inferred that India has recorded a very good annual growth rate in GDP
Source - http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG
11
8
5
9
11 11 10
13
11
14
3 1.4 1.8
3 2
Apollo Hospitals Enterprise limited
Wockhardt Hospitals Fortis Healthcare Manipal Health care Care Hospitals
Number of Locations Number of Hospitals Number of beds *1000
0
10
20
2007 2008 2009 2010 2011 Gro
wth
Rat
e
Growth Rate
Growth Rate
Increased Options for Healthcare Financing - The reach of Insurance have been increasing. The premiums
collected from Health Insurance are predicted to increase by around 50% from last year.
Source - IRDA Journal
Better Profitability – Hospital Industry is a highest capital intensive service industry and profitability has never
been as good to match others. It is all changing very fast. The best of the systems of world are still struggling to
achieve a good profitability level for healthcare.
Hospital Industry in United States had a profitability of just above 5% in last financial year. India on the other
hand, if we leave the charitable and government hospitals aside, is witnessing a15% to 25% profitability. This
increased profitability can be attributed to increased flow of patients and higher margins
Earlier Break Even - The break even for hospitals has been 5-7 years till last decade. Hospitals are now able to
manage their funds in a better way. Though costs have increased still they are able to maintain good profit
margins on all their services.
Increasing Demand within the country - The demand for quality healthcare has increased within the domestic
healthcare consumers. Today’s patients have more choices than ever when it comes to choosing and using
health care resources, and they are increasingly taking on the role of active and involved consumers. In the
present scenario, 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.
Disease Profile of the Country - The disease profile of country as a whole is changing. One can see that the
lifestyle diseases are now taking the limelight from the traditional infectious diseases.
Improvements in socioeconomic conditions in the last five decades in doubling longevity from 32 to 64 yrs,
steep fall of IMR, elimination of leprosy & yaws, eradication of small pox, & poliomyelitis being on verge of
eradication, credits to the success stories post independence.
However, the challenge we face with the on-going changes in disease burden that is producing a major health
transition. Demographic transition reflects quantitative and qualitative changes in the population profile and the
country is facing a double burden of communicable & non-communicable diseases.
Communicable diseases are still persisting as major health problems but the Non - communicable diseases are
doubling its incidence & prevalence. Coronary Artery Disease, diabetes, renal failures, Stroke, Cancer are on a
rise as a result of Hypertension, metabolic syndrome & stress.
Source - E&Y, November 2010
380 310 8 640 460 10
Cardica Diseases Diabetes Cancer
Chronic Diseases
2005 2012
Challenges in the Industry
Deteriorating infrastructure - India’s healthcare infrastructure has not kept pace with the economy’s growth. The
physical infrastructure is woefully inadequate to meet today’s healthcare demands. While India has several centers of
excellence in healthcare delivery, 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 number of public health facilities also is inadequate. For instance, India needs 74,150 community health centers per
million population but has less than half that number. In addition, at least 11 Indian states do not have laboratories for
testing drugs, and more than half of existing laboratories are not properly equipped or staffed.
The principal responsibility for public health funding lies with the state governments, which provide about 80% of public
funding. The federal government contributes another 15%, mostly through national health programs.
The healthcare divide – When it comes to healthcare, there are two sides of the country: the country with that provides
high-quality medical care to middle-class Indians and medical tourists, and the country in which the majority of the
population lives—a country whose residents have limited or no access to quality care.
Today only 25% of the Indian population has access to Western (allopathic) medicine, which is practiced mainly in urban
areas, where two-thirds of India’s hospitals and health centers are located. Many of the rural poor must rely on
alternative forms of treatment, such as ayurvedic medicine, unani and acupuncture.
The federal government has begun taking steps to improve rural healthcare. Among other things, the government
launched the National Rural Health Mission 2005-2012 in April 2005. The aim of the Mission is to provide effective
healthcare to India’s rural population, with a focus on 18 states that have low public health indicators and/or inadequate
infrastructure. These include Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Jammu &
Kashmir, Manipur, Mizoram, Meghalaya, Madhya Pradesh, Nagaland, Orissa, Rajasthan, Sikkim, Tripura, Uttaranchal and
Uttar Pradesh.
While the rural poor are underserved, at least they can access the limited number of government-support medical
facilities that are available to them. The urban poor fare even worse, because they cannot afford to visit the private
facilities that thrive in India’s cities.
Lack of Insurance - A widespread lack of health insurance compounds the healthcare challenges that India faces.
Although some form of health protection is provided by government and major private employers, the health insurance
schemes available to the Indian public are generally basic and
inaccessible.
Only 11% of the population has any form of health insurance coverage. For the small percentage of Indians who do have
some insurance, the main provider is the government-run General Insurance Company (GIC), along with its four
subsidiaries, The New India Assurance Company, Oriental Fire and Insurance Co., National Insurance Co., and The United
India Insurance Co. GIC is able to obtain funds for underwriting from other countries, although foreigners are not
allowed to own insurance companies.
Contribution to economy & Future Prospects
Expenses incurred by the Indian Government on hospital industry are the highest among developing countries. India’s
expenses on hospital sector comprise 5.25% of the GDP.
Industry experts project a hike in hospital sector market from $53 billion to $73 billion in five years from now. This will in
turn reflect an increase in the GDP share to 6.2%.
Key developments in the recent times
Rural healthcare sector in the country is witnessing an upsurge. The rural health sector has added around 15,000
health sub-centers and 28,000 nurses and midwives during the last five years, according to the Rural Health
Survey Report 2011, released by the Ministry of Health. The number of primary health centers has increased by
84 per cent, taking the number to 20,107, according to the report.
Indian health insurance market represents one the fastest growing and second largest non-life insurance
segment in the country; according to a report by research firm RNCOS. The health insurance premium is
expected to grow at a Compound Annual Growth rate (CAGR) of over 25 per cent for the period spanning from
2009-10 to 2013-14, according to the report.
The country’s first healthcare Special Economic Zone (SEZ), Frontier Mediville, is being set up by Frontier Lifeline
Hospital at Elavoor, near Chennai.
Major healthcare players such as Fortis and Apollo are expanding to tier-II and tier-III cities, along with urban
cities, due to substantial demand for high-quality and specialty healthcare services in these cities.
Government Policies
Government initiatives in the public health sector have recorded some noteworthy successes over time with focus on
investments related to better medical infrastructure, rural health facilities etc.
100 per cent FDI is permitted for health and medical services under the automatic route.
The National Rural Health Mission (NHRM) had allocated US$ 10.15 billion for the up - gradation and capacity
enhancement of healthcare facilities.
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. It also refers pejoratively to the practice of healthcare
providers travelling internationally to deliver healthcare.
Individuals with rare genetic disorders may travel to another country where treatment of these conditions is better
understood. However, virtually every type of health care, including psychiatry, alternative treatments, convalescent care
and even burial services are available in this industry.
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. In the recent years, government support, low cost, improved healthcare infrastructure, and rich
cultural heritage, have taken the Indian medical tourism to new heights. India has emerged as one of the world’s most
cost-efficient medical tourism destinations, and thus, attained a position among the global leaders. It is anticipated that
Indian medical tourism market will register a CAGR of 27% during 2011-15.
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. The regulatory structure in connection to the medical tourism industry has
been quite liberal and supportive in the country so far.
In 2004, India has received 150,000 medical tourists and this number has grown by a whopping 33% by 2008 to 200,000
inbound medical tourists. It is estimated that by the year 2015, India will receive over half a million annual medical
tourists annually.
Contribution to the economy
Confederation of Indian Industry (C II) sponsored Mc Kinsey & Co. study.–“Healthcare in India: The Road Ahead” report.
It reports the following figures and facts
1.3 million medical tourists visit Asia / year
Nos. of US patients seeking cheaper care abroad - grew to 7,10,000 / year
Over 5, 50,000 medical tourists travelled to India in 2008 bringing in earnings of $ 900 million.
The size of Indian Medical Tourism sector estimated in 2002 to be min 1, 00000 to 1, 50,000 foreign patients
per year (Medical Tourists).
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 $ 1.2 billion presently to $ 2.2 billion annually by 2013.
Up market private care in India to be worth from Rs.30000 crores to Rs. 50,000 crores by 2013.
Medical Tourism revenue can potentially rise from Rs. 5000 crores to Rs.10, 000 crores per year.
$ 17 billion Indian Healthcare Industry contributes about 4% -5% of GDP. It is expected to grow @ 10% annually
in next 5 yrs.
Health care spending in India has increased from Rs. 100,000 crores in 2007-2008 to over Rs. 200,000 crores by
2012.
Private Health care share will form the largest of this @ Rs.156, 000 crores and growth will be driven by rising
life style diseases.
Planning Commission report
Government is planning to provide ‘M’ Visa to Medical Tourists on priority. Most patients visit from SAARC countries,
United States of America and United Kingdom.
Comparison of heart surgeries in various countries
Heart Bypass Surgery Cost Heart Valve Replacement Surgery Cost
India $6,000 India $8,000
Thailand $7,894 Thailand $10,000
Singapore $23,983 Singapore $12,500
US/UK $19,700 US/UK $20,000
Comparison of various treatments in India & US
Country/Cost Mental Free Dental Bridge Bone marrow transplant Cosmetic Surgery Spinal Fusion
India $500 $30,000 $2,000 $5,500
US $5,500 $250,000 $10,000 $62,000
Medical Tourism Structure in India
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, IVF, Cosmetic Surgery,
Dental Surgery has to be published
Rates of all procedures in all International / International Magazines, journals, 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, USA, Canada, Middle East, 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.
Medical Education
Introduction
Medical education occupies a crucial position as it involves a close and deep study of life itself and its vital processes. In
India, there is a growing awareness of the role of health development as a vital component of socio-economic
development.
The Indian medical education sector is broadly classified into:
1. The modern system of medicine [allopathy, or non-Indian system of medicine (NISM)]
2. Indian systems of medicine and homeopathy (ISMH) that include Ayurveda, Unani, Siddha and homeopathy.
The governance of Medical Education in India is routed through various councils in respective systems. Every year the
respective councils primarily monitor and timely inspect all universities or colleges that give medical education. They
allow colleges or universities to grant various degree or diploma provided they are strictly adhering to the standards set
by the respective councils. In a nutshell the councils prescribe and recognize all standards of education in Modern and
Indian Systems of Medicine.
All these councils are autonomous bodies under the Ministry of Health and Family Welfare
MBBS Degree
The undergraduate degree, referred to as MBBS (Bachelor of Medicine and Bachelor of Surgery), provides basic training
in clinical medicine over 5.5 years. The MBBS course is of four and a half years and is followed by one year of
Compulsory Rotating Residential Internship.
Post-graduate training includes 3-year residency program and diploma training program. M.D. (Doctor of Medicine) and
M.S. (Master of Surgery) are 3-year postgraduate degree programs in medicine and surgery respectively. Doctors
possessing M.B.B.S. degree are eligible for these courses. There are super-specialty residency programs for those
completing postgraduate education. D.M. and M.Ch. are super-specialty programs in medicine. These programs duration
vary from 2 to 3 years. Doctors possessing M.D. or M.S. degrees are eligible for the courses
State wise distribution of colleges and their annual intake in 2011
Source: http://www.mciindia.org/apps/search/show_colleges.asp
Percentage share of public and private medical colleges offering M.B.B.S courses in India in 2011
Source - http://www.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, thus making it a five year course. Post Graduate training includes Master of Dental
Surgery (MDS). In India, there are 215 dental colleges offering BDS and 121 dental colleges offering MDS
Number of colleges offering BDS and MDS courses in 2011
http://www.mciindia.org/apps/search/show_colleges.asp
Nursing and midwifery programs
Number of Institutes offering the respective nursing programs in India in 2008, ANM: Auxiliary Nurse and Midwife,
GNM: General Nursing and Midwifery, PB B.Sc.: Post Basic B.Sc
Indian systems of medicine and homeopathy (ISMH) that include Ayurveda, Unani, Siddha and homeopathy is provided
by offering degrees like B. A. M. S. (Bachelor of Ayurvedic Medicine and Surgery) and B. H. M. S. (Bachelor of
Homoeopathic Medicine & Surgery). The course duration is 5½ years including one year of compulsory internship. Post
graduate courses include M.D. in Homeopathy. There are 98 ayurvedic colleges, 8 Siddha colleges and 40 unani colleges
in India offering different degree and diploma courses.
Analysis of the Medical education sector
14
170
19
75
Public Private
Number of colleges in 2011
BDS MDS
0
200
400
600
800
1000
1200
1400
1600
1800
ANM B.Sc GNM M.Sc PB B.Sc
Number of colleges offering various courses
Changes have been brought though not very speedily and effectively, as the main concern seem to be to make
quantitative changes. There is a tenfold increase in the number of medical colleges and the output of doctors, 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. This
leads to frustration and thus the westward flood.
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. The products of these colleges are more hard-hit and the result is brain drain within
the country. The overflow from the cities has always been to the west and now the flow is towards the African and Gulf
countries.
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. It is time to consider the feasibility of multi-
channel courses to suit different groups.
This would cover the big gap now seen between the undergraduate course and specialties. Three such broad channels
can be identified, say for a family doctor, the specialist and the health scientist.
There is a growing interaction of medical education with social sciences by introduction of Psychology and Psychiatry in
teaching hospitals. The increasing use of sophisticated equipment has highlighted the need for close collaboration with
engineering, electronic and computer sciences
In spite of all this change and expansion, we do find a lot of dissatisfaction expressed, both by the people and their
representatives. 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. There is a big gap in the distribution of health care
personnel over rural and urban areas. And, equally important, there are serious questions about the training doctors
receive in terms of its utility for different categories of diseases and, therefore, delivery to different categories of
people.
The current availability of doctors does not meet the recommendations of several past committees. In 1946, a
committee headed by Joseph Bhore, had suggested one doctor for 1,600people; another committee in 1948 had
recommended one doctor for 1,000; Research joint panel had recommended in 1980 that six general practitioners and
three specialists should be available for 100,000 people.
As far as specialists are concerned, the situation on the ground comes nowhere near meeting this figure. The
government’s estimated requirement of specialist surgeons, obstetricians and gynecologists, physicians and
pediatricians in 2001 for community health centers in rural areas is 12,172, but only 6,617 positions have been
sanctioned and 4,124 positions have been filled. An Escorts Heart Institute and Research Centre document prepared in
2005 said India would need at least one million more qualified nurses and 500,000 more doctors by 2012.
The root cause of our problem arises from a mistake. This was the blind imitation of the Western model, which perhaps
suited the English situation. This obsession with the Western model and standards has made our products misfits in our
own society and perhaps unwittingly promoted brain drain. The truth is that the medical graduate finds himself more at
home outside the country than at home.
So, changes in the curriculum have to be brought about in a more rational way by assessing our own needs. Every
country, and within each country, a geographical region has its own problems. In a way, the socio-economic groups, the
rural-urban settings and other parameters differ from country to country and from state to state. There are broadly the
medical needs of an individual and a community, and the mental health needs. 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.
Proper vocational guidance should be made available to the medical graduate, so that reliable data and rationale
thinking precede the choice of future career. Perhaps, we might even think of a larger share and inputs in public health
so that such a career becomes attractive. To the traditional approach of how to provide clinical cure for individuals, 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.
Excellence in medical education should not mean merely vertical expansion and achievements. 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.
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, 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. The quality and density of health work has a direct correlation with the positive health
outcomes of any country. With a view to increase the skill set base, the Government is now looking at allowing
corporate entities to venture into medical, nursing and paramedical education. The healthcare manpower added every
year is not sufficient to keep pace with the growing healthcare demand today.
India produces over 30,000 medical graduates every year from over 290 medical colleges, and only 12,000 post
graduate seats are available. With this small annual medical manpower entering the mainstream, one can only imagine
the lamentable gap between the educational capacities in this sector versus the requirements. To fulfill the additional
requirement of health manpower, it is essential to explore a range of partnership/collaboration options with the
private/corporate sector.
Emergence of AMC Model
The Government’s initiatives and changing guidelines will spur the growth of Academic Medical Centers (AMCs) in
future. AMCs are the conglomeration of research, direct patient care & education facilities. Such an integrated clinical
setting facilitates delivery of high quality care, better training and research. This gives it a distinct edge over stand alone
medical colleges. Such settings also help attract the best talent pool by offering them a broader perspective to their
work. Considering the huge shortfall of doctors, nurses and paramedics, the healthcare industry is now looking at this
model with a hope.
Medical Equipment services
Introduction
There are varied definitions of what constitutes ‘medical technology’. For the purpose of this report, the term medical
technology encompasses a wide range of healthcare products (devices, equipments as well as consumables/ supplies)
that are intended by its manufacturer to be used specifically for diagnostic and/or therapeutic purposes. It encompasses
any instrument, apparatus, appliance, implant, in vitro reagent, software, material or other article, which is used, alone
or in combination, for the following purposes
diagnosis, prevention, monitoring, treatment or alleviation of disease
diagnosis, monitoring, treatment, alleviation of or compensation for an injury
investigation, replacement, 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.
According to EUCOMED (the European medical technology industry association) “Medical technology extends and
improves life. It alleviates pain, injury and handicap. Its role in healthcare is essential. Incessant medical technology
innovation enhances the quality and effectiveness of care. Billions of patients worldwide depend on medical technology
at home, at the doctor’s, at hospital and in nursing homes. Wheelchairs, pacemakers, orthopaedic shoes, spectacles and
contact lenses, insulin pens, hip prostheses, condoms, oxygen masks, dental floss, MRI scanners, pregnancy tests,
surgical instruments, bandages, syringes, life-support machines: more than 500,000 products (10,000 generic groups)
are available today.”
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. In the second most populous country of the world, the supply of healthcare services falls significantly short of
the demand. Existing health care delivery mechanisms are inadequate to meet the ever growing needs of the Indian
population, especially in smaller towns/ rural areas.
The limited healthcare facilities available in the country are skewed more in favor of the affluent category of population.
At the high end, India has world-class doctors, clinics and technologies, and attracts international medical tourists in
growing numbers.
However, even today, 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. Accessibility is
restricted by shortage of healthcare facilities and professionals.
For every 10,000 Indians, there are 6 doctors while China has 20 doctors for every 10,000 people, Australia has 249, UK
has 166 and US has 548. Further, while majority of the population resides in rural areas, doctors and hospitals are largely
concentrated in cities. Poor healthcare infrastructure, along with a large population and high poverty levels has resulted
in a dismal status of people’s health.
This is illustrated by the following facts:
1. Of the 536,000 women who died during pregnancy or after childbirth in 2005 globally, India accounted for
117,000 (or 22%).
2. IMR (Infant Mortality Rate) for India is 58 per 1000 births, which is more than double that of China (23 per 1000
births) and even higher than Bangladesh (54 per 1000 births).
3. India has the highest burden of communicable diseases in the world, with malaria and tuberculosis among the
leading causes of death.
4. Growing non-communicable diseases (NCDs) - highest number of diabetics in the world. Good quality private
healthcare is out of reach for majority of India’s people. Government support/ subsidies alone are not enough to
cater to the healthcare needs of this segment of the population.
There is a need to use medical technology effectively to address the yawning gap between demand and supply of
healthcare services in India. Innovative products and business models are needed to make healthcare affordable and
accessible to a larger percentage of the population.
Market structure and analysis
Sector Analysis in India
25%
20%
12%
10%
10%
8%
15%
Market Structure
Medical Instruments and Appliances
Orthopaedic/Prosthetic Goods
Syringes,needles and Catheters
Electromedical
X-Ray Apparatus
Bandages and other medical supplies
Others
The medical technology market in India was valued at US$2.75 billion* in 2008, a growth of approximately 14% over
2007. The market is estimated to reach US$5 billion* by 2012 with an annual growth rate of nearly 15%. However, this
industry has not been well documented in the Indian context, and estimates of industry size and growth vary
significantly across different sources.
Other estimates of the market size range from US$1.9 billion in 2009 to US$3 billion in 2010. Majority of the Indian
medical technology market is dominated by medical instruments and appliances used in specialties such as ophthalmic,
dental and other physiological classes. This segment accounts for 25% of the total market, followed by orthopaedic /
prosthetic goods segment accounting for 20% of the total market. The ‘other’ segment includes endoscopy equipment,
cardiovascular control equipment and healthcare IT equipment etc
Estimated growth rates for the key market segments during 2008-12 range between 14-20%*, with the ‘other’ segment
witnessing the highest growth. Though not identified as a separate segment in the above pie chart, diagnostic kits
represent one of the fastest growing segments of the medical technology industry in India, enjoying an annual average
growth rate of over 30%.
Competitive market- presence of MNCs & Domestic firms
The Indian medical technology industry is highly competitive and fragmented, with domestic firms primarily
manufacturing low technology products such as disposables/ medical supplies, and MNCs primarily importing high end
medical equipments. However, in recent years, some domestic firms have expanded local manufacturing operations to
produce cost effective, medium end, medical devices.
Most MNCs are involved in distribution of medical technology products, though some of them have set up
manufacturing operations in India. MNCs seeking to enter the industry typically form joint ventures with local
manufacturers, establish subsidiaries or employ local agents to distribute their products. However, increasingly these
companies are moving away from the practice of importing through local agents and setting up subsidiaries.
According to industry sources, in 2007, over 25 foreign medical device companies received licenses to import medical
devices in India through their subsidiaries.
High imports
High end medical technology products are largely imported into India. Infact, imports constitute about 75% of the Indian
medical technology market. Key categories of items that are imported into India include imaging equipment,
pacemakers, orthopaedic and prosthetic appliances, breathing and respiration apparatus, and dental equipment.
It is interesting to note that while India’s medical technology industry is primarily import dependent, at the same time,
nearly 60% of what’s being manufactured is being exported. In fact some companies derive as much as 75% of their
revenue from exports. However, the exports of high quality, 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
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, the industry is plagued by low
penetration. The per capita spend on medical technology in India is approximately US$2, as compared to US$5 for China
and US$231 for Germany.
One example to illustrate low penetration is sales of pacemakers. At 18,000 units per year, India’s pacemaker
penetration is just 1% of western levels.
The challenge is to expand the market. While the medical technology industry is growing rapidly in India, demand comes
primarily from major cities. Penetration in smaller cities/towns/rural areas remains low, owing mainly to lack of
affordability, accessibility, awareness and availability.
Affordability
Since most of the country’ population cannot afford to pay for healthcare, providers in turn pay careful attention to
costs in making their purchasing decisions. For example, while big hospitals in Tier I cities are typically driven by quality
while purchasing medical devices and equipments, most smaller hospitals particularly those in Tier II and III cities and
rural areas, opt for cheaper products. Many of them do not have high end products as they cannot afford it.
Accessibility
Inequitable access to healthcare delivery has been a key issue with the Indian healthcare system. Public health
infrastructure is inefficient and inadequate too, with low investments in medical infrastructure, including devices and
equipments. As a result access to healthcare is inadequate or absent in rural India. Consequently, distribution of medical
technology in these areas becomes a challenging task.
Availability
Lack of innovation has resulted in scarcity of cost-effective products and solutions in the medical technology industry. At
present, there are a limited number of such options available, and that too in select pockets of the country. There is a
huge gap between the needs of the Indian consumer and what is available in the market.
Awareness
While there is growing awareness towards health related issues in the major cities, a large part of India’s population
remains ignorant about the latest advancements in medical technology. For example, the concept of Self Monitoring
Blood Sugar (SMBG) is still not well-known in India as compared to the West. In India 0.3% of diabetics use SMBG as
opposed to almost 22% in developed countries.
Ambiguous regulatory environment
The regulatory environment for medical technology in India is ambiguous, complex and lacks transparency. 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. It is currently regulated by the drug controller
general of India (DCGI) of the Central Drugs Standard Control Organization (CDSCO), Department of Health. The limited
regulation that has been introduced to date covers 14 medical devices (e.g. cardiac stents, catheters, orthopaedic
implants etc.)under the Drugs and Cosmetics Act 1940 and subsequent amendments. Application of the Drugs and
Cosmetics Act has resulted in redundant rules for medical devices and equipments in India. In certain cases, product
registration and manufacturing standards intended for drugs are applied to the manufacture of devices – e.g. it is
insisted that an expiry date be given on certain medical devices, whereas this is not required for such products.
Complex rules and guidelines
Absence of specific regulation for the industry, and coverage under the Drugs and Cosmetics Act has resulted in lack of
clarity and transparency about the regulations. There are problems pertaining to multiple levels of government
authority involved in enforcing the guidelines, as well as inconsistent interpretation and application of the regulatory
guidelines by customs officials at the ports, state drug controllers, and officials within CDSCO. This results in a prolonged
and cumbersome regulatory pathway, especially for new products.
Absence of quality standards
Lack of regulation of the industry has resulted in products of sub-standard quality being brought into the market,
creating wider gaps of quality and cost within the same category of products. There have been some cases of illegal/
counterfeit products also – e.g. illegal reprocessing and re-packaging of used syringes for re-sale. This creates significant
risk for the consumer.
Low indigenous manufacturing
India has not been able to develop itself as a strong manufacturing base for medical technology. The industry remains
dependent on imports for meeting its domestic requirements. There are two key factors contributing towards this trend,
as described below.
Lack of incentives
The government has not been proactive in encouraging the development of a domestic manufacturing industry.
There are no specific incentives in place to attract local or foreign companies to set up a production base in
India. Further, the current duty structure for medical devices and equipments favours imports, reducing the
competitiveness and growth potential of the local medical technology industry. Unlike China, which encourages
manufacturing of medical devices and equipments, Indian laws indirectly reward trading by charging higher duties on
raw materials than on finished goods.
High capital requirement
Medical technology is capital intensive, and setting up a manufacturing plant requires significant investment. While the
industry is on a high growth trajectory in India, the overall market remains small due to low penetration. As a result,
volumes are low and do not provide economies of scale for most manufacturers.
Future prospects
The government is the most important contributor in developing a conducive environment for growth of medical
technology industry in India. At the same time, the industry members need to work hand-in-hand with the government
to encourage innovation. There are certain expectations from both the government as well as the industry in order for
the medical technology industry to achieve sustainable growth.
Way forward – Government
Create a separate regulatory framework dealing with specific requirements of the medical technology industry
Provide incentives for domestic manufacturing, 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.g. 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, develop
training institutes etc.
Establish ‘medical technology clusters’ that will include not only industry members but also R&D centres, educational
institutes etc. 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, develop training institutes etc.
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.g. associate with physicians for obtaining specific
inputs on product development
Strengthen industry network / association to promote awareness about innovations, 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
Pharmaceutical industry
Introduction Drugs and pharmaceutical industry plays a vital role in the economic development of a nation. The pharma industry
generally grows at about 1.5-1.6 times the Gross Domestic Product growth.
India is one of the fastest-growing pharmaceutical markets in the world, and its market size has nearly doubled since
2005. India accounts for 8 per cent of global pharmaceutical production. Indian firms produce about 60,000 generic
brands across 60 therapeutic categories.
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. Due to the presence of low cost
manufacturing facilities, educated and skilled manpower and cheap labor force among others and the introduction of
GCP,GLP and GMP, the industry is set to scale new heights in the fields of production, development, manufacturing and
research.
In 2008, the domestic Pharma market in India was expected to be US$ 10.76 billion and this is likely to increase at a
compound annual growth rate of 9.9 per cent until 2010 and subsequently at 9.5 per cent till the year 2015. Further, IMS
Health India, which tracks drug sales in the country through a network of nationwide drug distributors, estimates the
healthcare market in India to reach US$ 31.59 billion by 2020
History and Origin
The architect of the Indian pharmaceutical industry would be Acharya P.C.Ray. In the year 1901, Acharya P.C.Ray
founded Bengal Chemicals and Pharmaceuticals Works Ltd. It started by making drugs from indigenous materials and
then went on to manufacture quality chemicals, drugs, pharmaceuticals and employed local technology, skills and
resources.
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.
Traditionally, pharmaceutical manufacturing clusters in India were limited to few Indian states such as Andhra Pradesh,
Gujarat, Maharashtra and Goa. However, in the past decade new clusters have emerged across the country and have
witnessed significant movement of pharmaceutical units to these locations.
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, Uttarakhand, etc.
Traditional bulk drug clusters are located primarily in Gujarat, Maharashtra, Andhra Pradesh, Tamil Nadu, Goa,
Pondicherry and Karnataka. Visakhapatnam (Vizag) in Andhra Pradesh is the upcoming bulk drug cluster that has
generated significant interest in the APIs players. Goa, Mumbai, Pune and Hyderabad have been the
preferred destinations for formulation players in the past. However, Baddi in Himachal Pradesh and Pantnagar and
Haridwar in the state of Uttarakhand are the upcoming formulation clusters, attracting formulation manufacturers from
across the country due to fiscal incentives offered by the Government.
The R&D clusters have followed a similar development pattern. Apart from the National Capital Region (NCR),
other R&D clusters have been limited to the established pharmaceutical regions in the country. High quality life, 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.
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 - India’s manufacturing prowess in formulations is validated by the fact that it manufactures 60,000 packs
across 60 therapy areas
Active pharmaceutical ingredients – APIs - India is the third-largest player in the world with 500 different APIs
Indian - Bulk Drugs 22%
Gelatin Capsules 0%
Indian - Bulk Drugs & Formln Lrg
45%
Indian - Bulk Drugs & Formln M/S
14%
Indian - Formulations
9%
I V Fluids 1%
Multinational 9%
Market Structure
48%
43%
9%
Break up of sales of Indian Pharma Indsutry
Domestic Retail Market Exports Institutional Sales
Abbott India 14%
Glaxosmit Pharma 28%
Aventis Pharma 14%
Pfizer 11%
Novartis India 8%
Merck 7%
Wyeth 6%
Astrazeneca Phar 6%
Solvay Pharma. 4%
Fulford (India) 2%
Multinational Market Share
Analysis of Major Players in Indian pharmaceutical industry - Sales Turn over and Net Profit
R&D expenditure over 10 years in pharma industry by Major Players
3,268.03
1,854.90
5,411.68
4,543.80
1,593.02
2,708.58
5,608.67
2,568.82
1,425.28 1,853.58
525.76 503.3
1,081.49 846.1
209.19 443.22
1,148.73 898.65
207.37
-794.21
-2,000.00
-1,000.00
0.00
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
Sales Turnover Reported Net Profit
0
100
200
300
400
500
600
700
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2 per. Mov. Avg. (2001)
2 per. Mov. Avg. (2005)
2 per. Mov. Avg. (2010)
Cost Structure/Performance indicators in Indian pharma Industry
The pharmaceutical industry is characterized by low fixed asset intensity and high working capital intensity. The Material
cost, Marketing and selling cost and Manpower Cost constitute the three major cost elements for the Indian
pharmaceutical industry, accounting for close to 70% of the operating income.
In the past 6-7 years, material costs, which account for almost 50% of the operating cost have declined owing to the
decrease in prices of bulk drugs and intermediates, 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.
On the other hand, the marketing and selling expenses, comprising of promotional expenses, trade discounts,
advertising and distributing costs; and freight and forwarding costs have increased in the past few years owing to the
increase in emphasis on sales of formulations.
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.
Some of the measures adopted are:
Pharmaceutical units are eligible for weighted tax reduction at 150% for the research and development
expenditure obtained.
Two new schemes namely, New Millennium Indian Technology Leadership Initiative and the Drugs and
Pharmaceuticals Research Program have been launched by the Government.
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)
0
500
1000
1500
2000
2500
3000
3500
4000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Wockhardt Ltd
Piramal Healthcare Ltd
Ranbaxy Laboratories Ltd
Aurobindo Pharma Ltd
Cipla Ltd
Torrent Pharmaceuticals Ltd
Imports – Countries
Foreign Investments in the Country
SWITZERLAND 33%
U S A 15% GERMANY
9%
ITALY 6%
CHINA P RP 5%
FRANCE 4%
DENMARK 4%
BELGIUM 4%
U K 4%
IRELAND 3%
INDONESIA 2%
KOREA RP 1%
JAPAN 1%
NETHERLAND 1%
Others 8%
Import to India
Mauritius
USA
UK
Singapore
South Africa
Cayman Island
Germany
Switzerland
Belgium
Italy
Others
Impact of foreign Investments Major impact of foreign collaborations had been in the areas like Technological Developments---R&D & New Product
Development, Productivity Enhancement, Reduction in Imports, Increase in Exports, Improvement in Quality Standards,
Decrease in Net Foreign Exchange Outflow, Increase in Return on Capital Employed , Enhancing Marketing Base
(Domestic & International) and overall Profitability.
Indian drug industry has in the last five years seen half a dozen big takeovers by foreign companies.
• $3.6 billion acquisition of promoters’ stake in Ranbaxy Laboratories in 2008 by Japan’s Daiichi Sankyo Co. Ltd.
• US drug maker Mylan Inc. paid $734 million to acquire Hyderabad-based Matrix Laboratories in 2006.
• German health care group Fresenius SE spent $219 million to take over Dabur Pharma in 2008
• US drug and nutrition firm Abbott Laboratories paid $3.72 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.
• 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, 1940 • The Pharmacy Act, 1948 • The Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954 • The Narcotic Drugs and Psychotropic Substances Act, 1985 • The Medicinal and Toilet Preparations (Excise Duties) Act, 1956 • The Drugs (Prices Control) Order 1995 (under the Essential Commodities Act)
Future growth
Pathology Labs
Introduction
Pathology testing is used to predict, pre-empt, diagnose and monitor disease, and to determine and monitor
appropriate therapies. It has been estimated that pathology investigations feature in up to 70% of diagnoses, making
this a foundation stone of modern health care. This dependence on pathology testing will increase in the genomic
medicine era and genetic testing will change the patterns of disease in our society.
However pathology is perhaps the least understood of the medical specialties. 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. The ‘hidden’ nature of pathology, being undertaken largely in laboratories that other health workers
never see, means that it has frequently been omitted from health system planning processes, or worse still targeted for
funding cuts
Maintaining the quality and safety of pathology services is crucial to the efficient delivery of health care. As pathology is
pivotal to health care, it is no surprise that deterioration in the quality of pathology services can compromise patient
care and lead to adverse health events. This has been demonstrated recently in Canada, 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.
There are six core aims for health care services – that they be safe, effective, patient-centered, timely, efficient, and
equitable. In particular, pathology testing is effective and efficient, with timely turnaround for obtaining results. Bulk-
billing rates of over 85% make access to tests listed on the Medicare schedule highly equitable.
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.
The laboratory must have policies and procedures for ensuring the protection of confidential information.
The laboratory must have policies and procedures to ensure that staff treat human samples, tissues or remains
with due respect.
Quality Standards
The organization must employ a quality system to ensure that the services provided meet required standards for
good medical laboratory practice.
The quality system must embody the requirements of International Organization for Standardization (ISO)
15189:2003.
Staffing, supervision and consultation
There must be sufficient pathology, scientific, technical and support staff who have appropriate qualifications,
training and experience relevant to the scope of the testing performed.
Pathologists, scientists and other appropriate staff must participate in continuing professional development.
Facilities
The laboratory must have sufficient space and appropriate facilities for the satisfactory provision of the laboratory
service.
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.
Pre-Analytical Phase
The laboratory service must ensure that there is information available for requesting practitioners and patients
on the services that are available.
Services provided must be in response to a documented request identifying the patient, the requesting
practitioner; the tests requested and appropriate clinical information.
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.
The laboratory must ensure the integrity of the specimen appropriate to the proposed testing.
Analytical phase The procedures and the analytical performance must be appropriate for the clinical application of the results.
Post Analytical Phase Reports commensurate with good medical laboratory practice and patient care must be provided to the requesting practitioner. 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.
Laboratories must be continuously enrolled, 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.
The laboratory must be able to track the specimen and procedures performed at all times.
Pathology Testing in India According to Cygnus estimates, the Indian diagnostic and pathological labs test services market was valued at Rs66.87
billion in FY2011. Indian diagnostics and pathological labs, based on the working level, are classified into high-end labs,
accounting for 38% of the market share, manual labs (28%) and second-level regional labs (34%). By therapeutic
segment, the major share is held by biochemistry (38%), followed by immunology (23%), haematology (15.8%), critical
care, urine routine, others, microbiology and coagulation. Seventy seven per cent of the market is contributed by
biochemistry and clinical pathology, which includes immunology and haematology.
According to the estimates, the Indian diagnostics and labs test services, in view of its growth potential, is expected to
reach Rs159.89 billion by FY2013, reflecting a CAGR of 18.9% during FY09-FY13. Applications of molecular diagnostic
testing will revolutionise clinical practices with major implications, opportunities and challenges for the labs.
The major players in diagnostics and pathological test labs market are:-
Metropolis
Religare SRL Diagnostics,
Dr Lal's Pathology,
Piramal Diagnostics (formerly Wellspring),
Thyrocare and
Anand Labs.
Expenditure on pathology
Current expenditure for pathology is more than $2 billion per annum
Pathology as proportion of medical services
Pathology as proportion of medical benefits
40%
3% 8%
0% 1%
34%
6%
3% 0%
2%
0%
3%
Medical Services 2010/2011
Primary Care
Allied Health
Specialized service
Obstetrics
Anaesthetics
Pathology
D.I
Operations
Ass at Ops
Optometry
Rad RX and Nuclear Med
Miscellaneous
32%
7%
11%
3% 2%
13%
14%
8%
0%
2% 1% 8%
0%
Medical Benefits 2011
Primary Care
Allied Health
Specialized services
Obstetrics
Anaesthetics
Pathology
D.I.
Operations
Ass at Ops
Optometry
Rad.Rx & Nuclear Med
Miscellaneous
Dental
The rate of growth in pathology ordering by specialists has shown relatively constant growth, at 5.5% for the last year.
Pathology and demographics
Pathology tests in the last 12 months
0%
10%
20%
30%
40%
50%
60%
70%
80%
15-24 25-34 35-44 45-54 55-64 65-74 above 75
all
Male
Female
GDP contribution of Pathology labs
The diagnostics and pathological lab test market has the potential to grow at a CAGR of 18.9 percent from FY 09-13,
while on the other hand, the medical devices market is estimated to grow at 23.2 percent, over the same period. (as per
Cygnus business consulting & research pvt ltd).
Future
Imminent consolidation, international tie ups and the demand created by insurance industry will similarly aid diagnostic
players to deliver world class services. Diagnostic majors are already partnering with American and British hospitals, as
well as insurance companies, for the same. Indian CROs (contract research organizations) are giving diagnostic majors an
opportunity to tap into the USD 10 billion global market for clinical trials.
According to a survey conducted in April-May 2011,5 across 60 private equity and venture capital firms, the most
attractive sector for investment across the healthcare industry was identified as Diagnostic services, followed by medical
devices/equipment.(based on poll comprising of PE and VC firms, no research agency involved).
Information technology will feature very prominently in laboratories in the year 2025. The laboratory system of the
future will:
Focus on patients, 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.
Deliver quality services that are responsive and sustainable.
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, i.e. selected consolidation of testing, appropriate automations and standardisation
(common laboratory information systems), to achieve cost effectiveness while attending to patient, clinician and
systems needs.
Employ information technology that facilitates the operation and management of the laboratory system and the
delivery and management of healthcare.
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.