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Indian Healthcare Market

Healthcare is defined in terms of efforts made to uphold or restore patients’ physical, mental, or emotional health, especially by trained/licensed professionals and organizations. It is a well established fact that healthcare industry plays a crucial role in defining a country’s potential to fight illness. In the developed countries like the U.S., U.K, and Germany, it is observed that the healthcare sector generates a major share of their revenues, making it a major contributor for the country’s GDP (Gross Domestic Product). As per the fact sheet of Centers for Medicare and Medicaid Services published in 2016, the national healthcare expenditure (NHE) was estimated to be around USD 3.3 trillion within the U.S., accounting for 17.9% of its gross domestic product (GDP). The development of the healthcare sector is dependent upon joint efforts of the government and private player. Their cumulative force makes the healthcare services affordable.

In the light of the above illustrated facts, it is conclusive that developing countries like India follow similar trends. India stands second in population, thus, have higher susceptible population for diseases. However, contrary to the increasing population, the burden of the diseases within the country has decreased.  According to the India state-level disease burden initiative program (2015) conducted by the Institute for Health Metrics and Evaluation, the per person disease burden within India have decreased by 36% from 1990 to 2016. This can be attributed on the basis of rapidly developing healthcare market followed by strengthening of the country’s economy.  It is mentionable by the Central Statistics Organisation (CSO) and International Monetary Fund (IMF) that India has emerged as the one of the fastest growing economies in the world. Following the same course, the organization states that India will become one of the top three economies of the world, i.e., over a period of next 10 to 15 years. Accounts illustrates that during 2017-2018, India’s GDP increased with a rate of 7.3%.

The landscape of the Indian healthcare market diversified and is segmented into six major segments namely:

  1. Hospitals
  2. Pharmaceuticals
  3. Diagnostics
  4. Medical Equipment
  5. Laboratory Instruments
  6. Region

MARKET SEGMENTATION: INDIAN HEALTHCARE MARKET

 Source: The International Trade Administration, India Brand Equity Foundation (IBEF), Federation of Indian Chambers of Commerce and Industry, PLOS One, National Health Accounts Estimates for India,  International Monetary Fund, Central Statistics Organization, Centers for Medicare and Medicaid Services, IOSR Journal of Business and Management,  White Papers, Annual Reports

Indian Healthcare Market, By Hospitals

  • District Hospitals
  • Intensive care
  • Critical care
  • Long-term care
  • General Hospitals
  • Specialized Hospitals
  • Rehabilitation Hospitals
  • Children's Hospitals
  • Trauma Centers
  • Psychiatric Hospitals
  • Others
  • Ambulatory Surgery Centers
  • Healthcare Centers
  • Teaching Hospitals

 

Indian Healthcare Market, By Pharmaceuticals

  • Active Pharmaceutical Ingredients (APIs)
  • Contract Research and Manufacturing Services (CRAMS)
  • Formulations (Drugs)
  • Generic Drugs
  • Innovator Drugs
  • http://pharmexcil.org/uploadfile/ufiles/1535226443_definitions.pdf
  • Biosimilars

 

Indian Healthcare Market, By Diagnostics

  • Serological Diagnostics
  • Precipitation
  • Agglutination
  • Neutralization
  • Western Blot
  • Enzyme Immunoassay
  • Others
  • Imaging Diagnostics
  • X-Ray
  • Magnetic Resonance Imaging (MRI)
  • Computed Tomography (CT)
  • Positron Emission Tomography (PET)
  • Biopsy Based Diagnostics

 

Indian Healthcare Market, By Medical Equipment

  • Surgical
  • Surgical Sutures & Staples
  • Handheld Surgical equipment
    • Dilators
    • Graspers
    • Auxiliary instruments
  • Clamps
  • Cannulas
  • Closure Devices
  • Others
    • Cutter Instruments
  • Trocars
  • Lancets
  • Scissors
  • Others
    • Electrosurgical Devices
  • Dental
  • Casting Machines
  • Instrument Delivery Systems
  • Ceramic Furnaces
  • Electrosurgical Systems
  • CAD/CAM Systems
  • Dental Chairs
  • Dental Light Curing Equipment
  • Dental Lasers
    • Soft Tissue Lasers
      • Diode Lasers
      • Carbon Dioxide (CO2) Lasers
      • Nd:Yag Lasers
    • All-Tissue (Hard/Soft) Lasers
      • Er:Yag Lasers
      • Er-Cr:Ysgg Lasers
    • Others
    • Orthopedic
    • Spinal Cord Surgery Equipments
    • Knee & HIP Replacement Equipments
    • Shoulder Surgery Equipments
    • Software & Services
    • Others
    • Ophthalmologic
    • Laboratory Instruments
    • Others

 

Indian Healthcare Market, By Telemedicine

  • Tele-Nursing
  • Tele-Pharmacy
  • Tele-Radiology
  • Tele-Dermatology
  • Tele-Oncology

Indian Healthcare Market, By Region

  • Northern India
  • Southern India
  • Eastern India
  • Western India
  • Central India

 

INDIAN HEALTHCARE MARKET: DYNAMICS

Drivers

  • Increasing prevalence of diseases and rising government support:

India is a constantly developing country and is witnessing rapid lifestyle changes due to increasing urbanization. Parallel to urbanization, modern-day health problems are increasing within the country. According to the Indian Brand Equity Foundation (IBEF) in 2018, ~50% of the total hospital based inpatient healthcare expenditure is estimated to fall for lifestyle diseases like diabetes, obesity, and others. This can be seen in terms of poor diet and increasing alcohol consumption. Simultaneously, due to the ongoing demographic and epidemiological transition, cancer has emerged as a major concern for the Indian population. According to a study published in the PLOS One journal in 2018, the overall prevalence of cancer within India is projected to be 83 per 100,000 persons. Moreover, the study suggests that a greater prevalence is reported amongst the urban population, i.e., 110 per 100,000 persons.

In such prevailing conditions, the Government of India is providing support to develop the healthcare sector, meet the growing therapeutics demands, and make the out-of-pocket treatments for diseases like cancer affordable. A single course of cancer therapeutics including radiotherapy costs around USD 1,676 in India.

It is reported that the government has increased funding for the development of healthcare industry. Additionally, recent changes in the trade policies have increased direct investments (FDI).  According to the National Health Accounts Estimates for India (2014-2015) published in 2017 by the Ministry of Health and Family Welfare, the government health expenditure (GHE) was estimated to be about USD 139,949 million. Additionally, suitable policy support in the form of reduced custom & excise duty, and freedom in service tax generates a potential for India to expand as a global healthcare hub. Moreover, under the Union Budget of 2015-2016, the Indian government raised health insurance premium amount from USD 327 to USD 491 for senior citizens.

Thus, it is interpreted that the increasing burden of diseases and favorable government policies are increasing the patient pool seeking the treatment. This provides the necessary driving force for the market to grow.

  • Increasing Medical tourism

Medical tourism is the practice of travelling from one’s native place to another country for medical treatment. From the past few years, Indian medical tourism gained popularity owing to lower cost of medical care, discretionary procedures, and quicker access for medically necessary procedures. A majority of the medical tourists from Europe and the U.S. visits India in search of more personalized care at lower costs. According to a study published by the IOSR Journal of Business and Management in 2016, heart surgery in India cost around USD 6,000 as compared to USD 30,000 in the U.S., driving the medical tourists to India.  Additionally, it is reported that patients from the Middle East & Africa access Indian private healthcare service providers owing to lack to lack of healthcare services and doctors at their native places. Moreover, according to the India Brand Equity Foundation there were ~twenty one Joint Commission International (JCI)-accredited hospitals in India. Such factors enables the Indian medical tourism market to reach a worth of USD 8 billion by the end of 2020 with a CAGR of 27% from 2016.

In the presence of such trends, the India healthcare market is estimated to witness larger patient pools coming from different geographies (in search of cost friendly healthcare services).  Thus, medical tourism is projected to generate greater revenues for the market.

Restraints

  • Limited standardization of healthcare care cost

In India, there occurs a lack of standardized norms for health care cost followed disparities in billing methods and non- clinical expenses. Additionally, it is reportable by a recent research study published by the Federation of Indian Chambers of Commerce and Industry (FICCI) that only 27% of the total Indian population opts for health coverage. The study also observed that ~62% of the total healthcare expenditure in India stands for out-of-pocket spending. This is much higher in comparison to the global average of 18% out-of-pocket spending. Constituently, there occurs a significant gap between requirement and pre-financed health coverage, leading to frauds at different level of medical claims. Thus, there is a need for establishing standard healthcare protocols in India.

Conclusion

On the basis of the above illustrated facts it is concluded that the Indian healthcare market will show a positive growth owing to increasing government support, rising prevalence of diseases (diabetes, cancer, etc.), increasing medical tourism, and favorable government policies. However, limited standardization of healthcare care cost and lack of regulatory framework for medical devices will restraint the market growth during the forecast period.

It is estimated that the healthcare market in India will show a positive growth from 2017-2023 and reach USD 428.3 billion by 2023 from USD 160.0 billion in 2017 with a CAGR an approximate CAGR of 17.3%.

 

Indian Healthcare Market Revenue (USD Million), 2017-2023:

Source: The International Trade Administration, India Brand Equity Foundation (IBEF), Federation of Indian Chambers of Commerce and Industry, PLOS One, National Health Accounts Estimates for India,  International Monetary Fund, Central Statistics Organization, Centers for Medicare and Medicaid Services, IOSR Journal of Business and Management,  White Papers, Annual Reports

Import Export Information:

  • A majority of Indian pharmaceutical players capitalize mainly on the export opportunities in the regulated and semi-regulated markets. The market’s export trade by pharmaceutical segment is higher as compared to the import trade. The revenue generated by the export trade of this segment was about 16.8 billion in 2016.
  • India is the largest exporter of formulations (drugs: generic and branded both) in terms of volume and by value stands 12th in the global market
  • India exports approximately 20% of the total generic medicines available in the global market (in terms of volume). This makes the country the one of the largest provider of generic medicines across the globe
  • The specialty hospital segment in the Indian healthcare market depends on the import of high quality medical devices, accounting for about 65% of the entire market
  • The total medical devices import market was estimated to be about USD 751 million in India (2016)
  • The total Indian export market for medical devices in 2016 was about USD 160 million

Major players in the Indian Healthcare Market

By Pharmaceutical Companies

  • Aurobindo Pharma
  • Biocon
  • Cadila Pharmaceuticals Ltd
  • Cipla
  • GlaxoSmithKline Pharmaceuticals Ltd.
  • Glenmark Pharmaceuticals Ltd
  • Jubilant Life Sciences Ltd
  • Lupin
  • NATCO Pharma
  • Ranbaxy Laboratories
  • Sanofi
  • Sun Pharmaceutical Industries Ltd
  • Torrent Pharma

By Hospitals

  • Max Healthcare
  • Fortis Healthcare Ltd
  • Apollo Hospitals
  • Aravind Eye Hospitals
  • CARE Hospitals
  • Manipal Group of
  • Hospitals
  • Narayana Health
  • Sir Ganga Ram Hospital
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