Healthcare Opportunities

An Expert's View about Medical, Health and Cosmetics Products in India

Last updated: 28 Feb 2011

The Indian healthcare industry is estimated to grow from the current level of around Rs 1500 billion (US$ 37.5 billion) to over Rs 3000 billion (US$ 75 billion) by 2012. At Rs 690 billion (£10 billion), private spending accounts for a significant chunk of the healthcare delivery market.

Sector briefing Healthcare Opportunities in India Why India? The Indian healthcare industry is estimated to grow from the current level of around Rs 1500 billion (US$ 37.5 billion) to over Rs 3000 billion (US$ 75 billion) by 2012. At Rs 690 billion (£10 billion), private spending accounts for a significant chunk of the healthcare delivery market. The healthcare sector in India is witnessing large private sector investments in new facilities. Government is encouraging private participation due to constraints in public funding capability. Import incidence is high - almost 70% of medical equipment for private hospitals is imported. Peak import duties have been lowered to bring India in line with WTO norms. Find general information on Indian market conditions on UKTI?s website. The Doing Business Guide for India gives an overview of India?s economy, business culture, potential opportunities and an introduction to other relevant issue UK Trade & Investment Sector briefing: Healthcare opportunities in India Size of Market accounted for 65 percent whereas indigenous products accounted for the balance. India's healthcare industry is estimated at USD 56 billion, 5.5% of India?s GDP and is Of the total Rs. 125 billion market, estimated to reach USD 75 billion by 2012 and instruments, appliances, and disposables had USD 150 billion by 2017. the major share of 40 percent and was followed by the reagents and kits segment that The per capita healthcare spend is low at had 20 percent share. Radiology equipment around USD 49 currently. According to one shared 15 percent of the total market while estimate, an average middle class family of physical and chemical analysis equipment had four members spends around USD 255 per 14 percent share. The balance 11 percent was year on healthcare. Around 70% of tertiary contributed by other equipment. hospitals are in the private sector. Market Characteristics Medical Equipment Players ? Local Key Healthcare Statistics Manufacturers and Overseas suppliers Multinational companies with extensive service Total Size: networks (GE, Philips, Hitachi, Siemens) - 0.7 million doctors dominate the high end of the medical - 1.1 million hospital beds equipment market. Indian manufacturers are - 15,393 hospitals producing good quality medium technology - 3,904 Nursing Colleges & 1.4 million nurses equipment, though local products still maintain - 303 Medical Colleges ~ 35,000 new medical the stigma of unreliability. The low end of the graduates each year market (consumables and disposable - 143 Pharmacy Colleges and 350,000 equipment) is dominated by a fragmented Chemists group of local manufacturers. While new - 70% of hospitals (tertiary care) are managed private hospitals wish to procure high quality by the private sector equipment, price-sensitivity is pervasive in There is an extensive three-tiered government India and purchasing decisions hinge on healthcare infrastructure comprising 23,000 persuasive cost-benefit arguments. Some Primary Health Centres and 137,000 sub- overseas companies have engaged in third centres serving the semi-urban and rural areas party manufacturing in India to avoid import and 3000 Community Health Centres. tariffs. The more ambitious have developed (Source: Ernst & Young). their own production facilities, taking CII-McKinsey Study advantage of low manufacturing costs and A joint study "Healthcare in India: The Road using India as a platform to supply the Asian Ahead" done by the Confederation of Indian market. Most large trust and corporate Industry (CII) and McKinsey & Company hospitals have invested in modern equipment mentions that India has 1.5 beds per 1000 and focus on super-specialities. Attractive people while China, Brazil & Thailand have an opportunities exist for those who can supply average of 4.3 beds. The study projects that such hospitals with a high quality, integrated changing demographic and disease profiles and range of products, supported by an extensive rising treatment costs will result in healthcare service network. Manufacturers of innovative, spending more than doubling over the next 10 new products must adopt a long term approach years. Private healthcare will be the largest along with a marketing & communications component of this spending in 2012, rising to strategy to the Indian market. Manufacturing Rs 1560 billion (US$ 39 billion) from the capability is most pronounced in the western current level of Rs 690 billion ($17 billion). It region (specifically Maharashtra and Gujarat), could rise by an additional 390 billion (US$ 9.7 though entrepreneurs in all regions are looking billion) if health insurance cover is available to for technology transfer and JV manufacturing the rich and middle class. agreements. Regional and national distributors are keen to establish links with UK Medical Equipment manufacturers, though service quality and cost-benefit are important issues. In 2008, the total medical equipment and devices market was an estimated Rs. 125 One of India?s largest medical technology billion. This market is expected to reach Rs. companies, Trivitron group has established a 220 billion in 2009. Of the total medical high-end medical technology park in Chennai. technology market in 2008, imported products Trivitron has signed three collaboration UK Trade & Investment Sector briefing: Healthcare opportunities in India agreements with overseas companies (Aloka orthopaedics, geriatrics, maternity and from Japan, Byosystems from Spain and trauma/critical care. Brandon Medicals from the UK) to manufacture medical equipment in this park. Key Market Players Disposable products play a significant role in Apollo Hospital Group the industry. India has a large number of local ( manufacturers supplying disposables. However the quality of local products is not world-class. Established in 1983, Apollo Hospitals has 8500 The market for medical plastics and laboratory beds across 53 hospitals in India. It is one of supplies is growing fast and there is a niche Asia?s largest healthcare groups. The group segment for high-end single-use CE marked runs under the leadership of its founder disposables. chairman Dr. Prathap C Reddy and managing Hospitals director Dr Preetha Reddy. Until the early 1980s, Government-run hospitals and those operated by charitable Apollo Hospitals Group, is an integrated organisations (trust hospitals) were the main healthcare organization with owned and providers of subsidised healthcare. However, managed hospitals, diagnostic clinics, the last two decades have seen the dispensing pharmacies and consultancy mushrooming of corporate and privately run services. In addition, the group?s service hospitals, both small hospitals (popularly called offerings include healthcare at the patient?s nursing homes, which typically have between doorstep, clinical & diagnostic services, medical 4and 25 beds) and large tertiary care facilities. business process outsourcing, third party Most large trust and corporate hospitals have administration services and health insurance. invested in modern equipment and focus on To enhance performance and service to super-specialities. The private sector accounts customers, the company also makes available for 70% of primary medical care and 40% of the services to support business, telemedicine all hospital care in India. They also employ services, education, training programs & 80% of the country?s medical personnel. research services and a host of other non-profit projects. According to one estimate there is a demand for 80,000 multi or super-speciality beds in Apollo has hospitals in major Indian cities India, but construction over the next few years including Ahmedabad, Bangalore, will meet only 5% of the requirement. This Bhubaneshwar, Bilaspur, Chennai, Delhi, shortfall has resulted in the proliferation of Hyderabad, Kakinada, Kolkata, Madurai and small private ?nursing homes? in profitable Vishapatanum. They also have super speciality niches such as cardiology, developed by hospital Apollo Bramwell Hospital in Moka, doctors as an alternative source of income. Republic of Mauritius with their joint venture These doctors lack the funding and partner British American Investment group. management skills necessary to establish large, private multispeciality as well as super- Their group brands include Apollo Clinics, speciality hospitals. Till recently, interest rates Apollo Pharmacy, Apollo Munich Health on such greenfield projects were prohibitively Insurance, Apollo Global Projects Consultancy, high and exchange rate exposure had limited The Cradle Apollo and Life Apollo Healthstreet. foreign investment in hospital construction. The specialities they serve include Heart, The Apollo Hospitals Group has pioneered the Orthopaedics, Spine, Cancer Care, corporate organisation structure for hospitals in Gastroenterology, Neurosciences, Nephrology India. Wockhardt, Escorts, Fortis Healthcare & Urology, Critical Care and Preventive Health and Max India are other major companies in Care. the healthcare delivery space with a chain of multispeciality hospitals. In future, such They have alliances with companies including hospital groups plan to develop networks of AIG International Group, American Life diagnostic centres across the country and Insurance Company, Vanbreda, International provide patients with multi and super-speciality SOS, Seven Corners, Companion Global Health hospitals (based in the large metro cities), Care, Emergency Assistance Japan, GMC vertically integrating the provision of primary, Services, International Claims Service and secondary and tertiary care. Key therapeutic Prestige International. areas are cardiology, nephrology, oncology, UK Trade & Investment Sector briefing: Healthcare opportunities in India Apollo Hospitals has JCI accreditations for 7 of Healthcare is one of the leading chains of its hospitals, the largest by any hospital group hospitals in India. The hospital?s state of the in the region. art infrastructure is one of the best in Delhi with over 275 ICU beds and leading Fortis Healthcare Ltd technologies. ( The Max Group also includes a Health Fortis Healthcare Limited (FHL) is engaged in Insurance company, Max Bupa Health providing the latest in internationally Insurance, a joint venture between Max India recognised medical care to patients with a and Bupa Finance Plc., UK which was variety of ailments and medical conditions. incorporated in 2009 and a Clinical Research Their network consists of Super Speciality business, Max Neeman, both of these are fully Hospital Hubs that concentrate on one or more owned subsidiaries of Max India Limited. specialities. These hospitals are interconnected to a larger network of multi-speciality hospitals Other important hospitals include: that ensures patient access to expert care for any speciality. All India Institute of Medical Sciences (AIIMS) Delhi ( FHL is the one of the largest private healthcare Sancheti Hospital, Pune companies in India with a network of 62 ( Hospitals. It recently acquired the Wockhardt Aditya Birla Hospital, Pune Group of Hospitals. ( Reliance Healthcare - both groups Most of their hospitals are multi-specialty Reliance Industries Ltd ( and hospitals, which provide secondary and tertiary Reliance Health Ventures Limited healthcare to patients. Some of them also ( include super-specialty ?centers of excellence? Wockhardt Hospitals providing quaternary healthcare to patients in ( key specialty areas such as Cardiac care, Lilavati Hospital ( Orthopedics, Neuro-sciences, Oncology, Renal Hinduja Hospital care, Gastroenterology and Mother and child ( care. Manipal Hospital ( Narayana Hrudalaya In addition, two of their hospitals, Escorts ( Heart Institute & Research Centre at New Delhi Christian Medical College, Vellore (www.cmch- (?EHIRC?) and Escorts Heart Centre at Raipur (?EHCR?), focus primarily on cardiac patients, Global Hospital ( with EHIRC serving as a super-specialty MIOT Hospital ( ?center of excellence? for cardiac care. With Escorts Hospitals, Fortis Healthcare runs the Leading Medical Device & diagnostics largest cardiac care program across the world. companies in India include: They also operate Fortis La Femme, a Johnson & Johnson ( ?boutique? style hospital that focuses on Siemens ( women?s health and maternity care. GE Healthcare Max Healthcare Philips ( ( Becton Dickinson ( Smiths Medical ( Max Healthcare commenced operations in 2001 Arjo Huntleigh ( and is India's first provider of comprehensive, Randox Laboratories ( seamlessly integrated, world-class healthcare Smith & Nephew (http://global.smith- services. It is primarily focused on the National Capital Region (NCR) of Delhi, and is well known on its way to become the region's key Education & Training healthcare provider in the private sector. With The Medical Council of India (MCI) over 930 Beds and 8 hospitals in Delhi, over ( and the Dental Council of 1500 physicians and 3500 support staff Max India were set up under Acts of Parliament with UK Trade & Investment Sector briefing: Healthcare opportunities in India a view to regulate medical and dental made it mandatory for all hospitals to establish education in the country. Under the provisions an effective clinical waste management of Regulations of the two statuary bodies, no system. medical or dental college can be established or increase their capacity without prior approval of the Central Government. Opportunities There is a pressing need for qualified specialist India is now emerging as a healthcare hub in nurses and paramedics and qualified hospital Asia due to the growing number of multi and administrators. Several private hospitals have single superspeciality tertiary care hospitals. invested in nursing education, but are Customer expectations for quality healthcare concerned about loyalty: trained nurses often from private hospitals is high and most urban leave India, attracted by the higher salaries hospitals are striving to provide state-of-the- offered in the Gulf countries. art care in almost all healthcare specialities. Information Management The intention of these leading private hospitals Indian healthcare is plagued by a lack of is to provide world-class international quality standardisation and accreditation, highlighting healthcare service at affordable rates. As a the need for information management consequence, medical tourism (or medical expertise. This aspect of the market covers a value travel) is a high interest area for these variety of sectors including public health, hospitals. The rapid expansion in the sector by insurance, hospital management, clinical way of several greenfield and expansion research and clinical trials. Information projects in hospitals and medical colleges Technology, a core competence of the southern across India provides immediate opportunities and western region, facilitates management of for UK healthcare technology, equipment and information. According to a report by service providers and consultants. Springboard Research, India has the fastest Opportunities for UK healthcare and medical growing healthcare IT market in Asia, with an technology companies in India are growing - expected growth rate of 22 per cent, followed key areas are detailed below: closely by China and Vietnam. In fact, the Indian healthcare technology market is poised Hospital Infrastructure to be worth more than US$ 254 million by 2012. There is considerable scope for There are hospital project design and partnership in the field of Health Informatics consultancy opportunities as a large number of (the application of IT to health data) and the private hospitals are being set up in the larger UK experience in the collection of information cities. Fortis Healthcare Ltd will increase the to establish standards in both public and number of beds from the present 1790 to private sectors would be well received in India. 4,000 over the next five years. Apollo Hospitals Healthcare Services plans to increase the number of its clinics from Two services that are finding growing the present 50 to 250 numbers in the next importance are emergency medical services couple of years. There are also several smaller (EMS) and clinical waste management. In both regional players who have announced plans of cases there is a willingness for the private and setting up new greenfield hospitals in smaller public sectors to work together to implement towns and cities. effective systems. EMS and clinical waste initiatives involve a host of products and Opportunity also exists for overseas services including education, consultancy, and organisations to set up Hospitals in India. equipment. The specific services and International Hospital groups that have entered stakeholders must be clearly defined and India through the FDI route include Columbia financial responsibilities made clear from the Asia from Malaysia, Pacific Healthcare Holding outset. EMS and clinical waste are services and Parkway from Singapore, Emaar from the implemented at the municipal level. A Middle East and Prexus Health Partners from successful pilot in a particular city could the US. establish a model to be used in others. EMS is most conducive to the comparatively advanced Medical Equipment and Devices infrastructure that characterises the cities of the South, while clinical waste projects have There is a need for sophisticated hospital generated great interest across all regions of equipment, especially operating theatre India as a recent Supreme Court ruling has UK Trade & Investment Sector briefing: Healthcare opportunities in India products. In view of the relatively low customs will become vital as the number of tertiary duty rates (9.2%-25%) combined with an carehospitals increase. increasing number of healthcare centres specialising in advanced surgery, India offers There is an opportunity for UK substantial opportunities for the direct supply Universities/training providers to provide medical education in India in association with of high-technology, specialised medical local medical colleges. This association could equipment, products and systems. There is be by way of sharing of curriculum, faculty good demand for imported medical exchange and student exchange programmes. consumables, especially high quality CE Doctors in India are inclined towards UK marked products in specialised/niche medical processes and accreditation bodies. segments. Several have worked in the National Health Service before returning to India and have Diagnostic Kits, Reagents and hand-held strong links with the UK?s medical fraternity. Diagnostic Equipment The growth of the diagnostics/analytics sector India has a high incidence of infectious has also identified a need for training in diseases (eg tuberculosis, malaria, AIDS and biochemical engineering. The development of Hepatitis B). In accordance with world practice, medical services such as clinical waste it is mandatory to test for major infectious management and emergency medicine will diseases. This has resulted in a growing market generate specific educational requirements eg for diagnostic kits and reagents. Imports paramedic training. However it is important for constitute 50% of this market. Hand- UK healthcare education providers to define held/portable diagnostic equipment (eg for collaborative projects in precise commercial blood sugar, Blood Pressure testing etc) is also terms. a fast growing segment. India has around 45 million diabetics. Other Growth Areas Emergency Medical Services and Trauma E-healthcare / Telemedicine Care is a growing area in India with several state governments seeking to replicate the UK/ This is a high-growth area and most public European models. There are also opportunities hospitals (funded by State governments) and for British involvement in the area of setting up private single and multi-superspeciality of Hospices as well as day care centres or hospitals have gone in for customised Hospital ambulatory facilities. The health Management Systems and other medical based insurance/managed healthcare business is IT products. Though telemedicine is in its also at a take-off stage. BUPA has recently tied infancy in India, it is beginning to take root. up with Max Healthcare to form Max BUPA There are already some successful initiatives in Health Insurance. New opportunity areas this segment (eg Apollo Hospitals). There is include personalised boutique healthcare, also a Tata Consultancy Services (TCS) medical malls, multiple independent clinics, promoted website: special residential care with medical facilities- which is promoting its usage widely in India. meeting the needs of the elderly. Given the poor availability of quality healthcare facilities outside the large and second cities, There is a strong demand for integrated telemedicine is expected to become a viable solutions in which consultancy is grouped with business proposition. a range of products and services. UK companies would benefit by working together Medical Education & Training to create such offerings in hospital design/development, emergency medical The UK is in a position to capitalise on its services, clinical waste management and expertise in areas like Medical Education telemedicine. Research and Training, especially post graduate medical education, nursing and UK healthcare companies in India paramedic training (the Indian medical curriculum is based on the UK system and Huntleigh Technology Plc (acquired by Getinge, many doctors and surgeons have had training Sweden in January 2007) has set up a 100% at the Royal Colleges). Specialist nurse training subsidiary company in Mumbai - Arjo Huntleigh Healthcare India Pvt Ltd. Initially set up as a UK Trade & Investment Sector briefing: Healthcare opportunities in India liaison office in 1999, the subsidiary company These leads are sourced by our staff overseas was established in mid-2002. The Indian in British Embassies, High Commissions and company is doing good business with its focus Consulates, across all sectors and in over 100 being on three main product areas: Foetal markets. Monitors & Dopplers, pressure area care systems and beds and examination couches. You can be alerted to India/healthcare Randox Laboratories Ltd, UK has a successful opportunities on a regular basis by registering presence in the diagnostics/ pathology market. on the UKTI website. More on UKTI?s business opportunities service Smith & Nephew as well as Smiths Medical International also have subsidiaries in India. Other players include Omega Diagnostics, Algeos and Bupa which has a JV with Max India. In general, the healthcare and medical technology sector in India offers several exciting opportunities for cooperation with suitable UK companies and organisations. Upcoming Healthcare Projects Major corporate hospital groups are making significant investments in Health Cities (or Medi-Cities)? a fast growing business segment in the private healthcare infrastructure space: Strong emphasis on Education, Research & Development Approx 15-20 Health Cities are expected to come up in the next 5 years Offering integrated facilities such as hotels, residential facilities, recreational facilities, golf courses These include: ?Medanta MediCity ? Gurgaon; 1,600 beds ?Fortis MediCity ? Gurgaon; 800 beds ?Fortis MediCity ? Lucknow; 800 beds ?Apollo Health City ? Hyderabad; 700 beds ?Nagpur Health City ? Nagpur; 2,000 beds ?Chennai Health City ? Chennai by Global Group; 1,000 beds ?Bengal Health City ? Durgapur; 50,000 beds ?Narayana Health City ? Bangalore; 5,000 beds ?MIOT hospitals, Chennai ? a multi-specialty medical city ?Reliance ADAG ? 60 acre health city in Kolkata ?CMCH ? Ludhiana; USD 12.2 million MediCity Source: The Economic Times, Realty Plus If you have any questions on the opportunities above, contact the UKTI India Healthcare contacts named in this report. Business opportunities aimed specifically at UK companies are added daily to UKTI?s website. UK Trade & Investment Sector briefing: Healthcare opportunities in India Major events and activities UKTI contacts UKTI supported ABHI outward healthcare Anjali Malkani trade mission to India Senior Trade & Investment Adviser Contact: UKTI Lifescience Sector Group British Deputy High Commission, Mumbai Email: Tel: (0091 22) 6650 2177 Time: 14-18 March 2010 Email: Other Sectoral Trade Fairs Sabine Platteuw Healthcare Infrastructure & Medical Life Sciences Sectors Group Technology (HIMT) 2011 UK Trade & Investment ? Dates: 2-5 February 2011 Kingsgate House ? Venue: AIIMS Campus, New Delhi, India 66-74 Victoria St. London SW1E 6SW Medical Fair India 2011 E-mail: ? Date: 25 - 27 March 2011 T: +44 (0)20 7215 4785 ? Venue: Pragati Maidan, New Delhi, India Meditek Clinica 2011 ? Date: 2-4 July 2011 ? Venue: Palace Grounds,Bangalore, India Healthex 2011 ? Date: 5-7 August 2011 ? Venue: Bangalore International Exhibition Centre,Bangalore, India Medicall 2011 ? Date: 12-14 August 2011 ? Venue: Chennai Trade & Convention Centre, Chennai, India Hospital Infrastructure India 2011 ? Date: 21-23 October 2011 ? Venue: Bombay Exhibition Centre, Mumbai, India Find full details of all India healthcare events on the UKTI website. New export events are added daily to the site and you can register to be alerted to them on a daily, weekly or monthly basis UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events UK Trade & Investment Sector briefing: Healthcare opportunities in India Next steps - How UKTI can help ? Arranging appointments British companies wishing to develop their ? Organise seminars or other events for business in the Indian market are advised to you to meet contacts and promote your undertake as much market research and company in the Indian market planning as possible in the UK. UKTI?s team in India, with its wide local knowledge and This work is available via our Overseas Market experience, can provide a range of services to Introduction Service (OMIS) a chargeable British-based companies wishing to grow their service which assists British-based companies business in the Indian market. wishing to enter or expand their business in overseas markets. This can include: ? Provision of market information To find out more about commissioning this ? Validated lists of agents/distributors work, or accessing other UKTI services and ? Key market players or potential specialist advice, please visit the UKTI website customers in the Indian market to find contact details for your local UKTI ? Establishment of interest of such office. contacts in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2010 by UK Trade & Investment. Crown Copyright © UK Trade & Investment Sector briefing: Healthcare opportunities in India
Posted: 24 February 2011, last updated 28 February 2011

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