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

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100

150

200

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300

US

$ B

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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

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400

600

800

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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.