“Challenging Times often Brings the Best Out of Us” and the Current Pandemic is likely to Offer Similar When it Comes to the Indian Healthcare Industry
At outset of this new decade 2020, the world witnessed one of the biggest and toughest health crises in the form of COVID’19. About 4.7 lakh people across the globe succumbed their lives to this pandemic over a span of just six months as on June 2020, with a count of infected one’s hovering around 90 lakhs. The scenario has been so critical that even the countries with the best health infrastructure have been short on providing adequate medical facilities, with more and more cases getting registered every day. India being no different is also coping up with this tough time. It is pertinent to note that as of June 2020, the total COVID’19 positive cases in India stand to be 4.25 lakhs, i.e. approximately 5% of the total infected cases globally. Further, the country accounts for nearly 3% of the total global deaths due to the current pandemic.
As of June 2020, the total COVID’19 positive cases in India stand to be 4.25 lakhs, i.e. approximately 5% of the total infected cases globally. Further, the country accounts for nearly 3% of the total global deaths due to the current pandemic
But challenging times often bring the best out of us, a great opportunity is underlying beneath the tough times and is likely to better shape the growth of the healthcare industry in India. The experiences gained during this time has demonstrated the potential fundamental shifts across the healthcare and well-being continuum. These shifts include the design and construction of facilities, the training of healthcare workers, sourcing and inventory management of critical care equipment and personal protective equipment (PPE) materials, and the optimal settings for care delivery and how it is reimbursed. Some of these shifts were underway in the country before the pandemic was declared and likely will now be accelerated.
In fact, well advance of the current scenario, the government of India recognized the need to reform the existing healthcare industry in the country. The testimony of this fact lies in the budgetary allocation of INR 690 Billion done for the sector in Union Budget 2020-21 on February 1, 2020. Not only this, but the government also announced the expansion of its Ayushman Bharat scheme with setting up of more hospitals in Tier-II and Tier III cities of India through Public-Private Partnership (PPP) model. Not only in setting hospital infra, but the government is enhancing private participation across the healthcare industry. One of the biggest examples of this is mushrooming of start-ups scaling virtual health offerings such as telemedicine. It is significant to note that many major hospitals in India have adopted telemedicine services and have entered the number of PPPs tie-ups which is likely to increase the said market at a CAGR of 22-27% by 2025. Some of the other identified important changes that Indian health and well-being industry can witness and offer a potential market for the private players are – flexible design & construction of new facilities to ensure an increased number of beds with an ability to quickly convert them into intensive/critical care beds, establishing a centralized ICU hub, virtual ICUs, use of artificial intelligence for operational excellence, robotic surgeries, separating ancillary functions such as imaging & test labs from core hospitals, accelerated transition to ambulatory care, technological advancements, etc.
The medical devices industry is categorized into four main segments –
i. Consumables & Implants (including stents, syringes, needles, catheters, suturing materials, bandages and dressing),
ii. Diagnostic Imaging (including electro-diagnostic apparatus, radiation apparatus, imaging parts and accessories),
iii. Instruments and Appliances (including surgical and non-surgical equipment, and other instruments and supplies),
iv. Patient Aids and others (including hearing aids, prosthetics and orthotics, pacemakers, dental products and others).
Around 60% of the manufacturers in India are mostly domestic players operating in the consumables segment and catering to local consumption. Large Multinational Corporations lead the high technology end of the medical devices market with extensive service networks, accounting for a market share of 75-80%. India is the 4th largest medical device manufacturing market in Asia and holds significant potential to be a leader in this space by 2030. Presently, the medical device industry in India holds a market size of INR 840 Billion. With, 100% FDI allowed under the automatic route for both brownfield and greenfield projects, ease in the regulations for manufacturing medical devices & equipment and the likely global shift in setting manufacturing base from China to India, the market size of medical device industry in India is anticipated to see a five-fold growth and hover around INR 4000 Billion by 2025
Instruments and appliances hold the largest market share of the medical devices industry in India with 34%, thus anticipates a market size of INR 1360 Billion by 2025. Diagnostic devices also hold a significant percentage share of 31% in the total market size, hovering around INR 260 Billion as of 2020. Of the total market size of diagnostic devices, imaging parts & accessories such as contrast media, medical X-Ray films (flat and rolled), X-Ray tubes and other imaging parts/accessories hold the major chunk. Segment-wise detailed market size projections for medical device industry in India by 2025.
Further, it is worth noticing that India is emerging as a strong market for wearables & mobile devices with approximately 3 Million Units sold in 2019 and expected to reach a magnanimous sale of 129 Million Units by 2030. The current scenario has been a blessing in disguise for the healthcare industry opening many new avenues for growth. In fact, there is a good chance of many non-healthcare giants to expand their expertise into the said industry. The Healthcare industry in India has already been one of the largest contributors to the economy –both in terms of revenue and employment. Further, the current situation will certainly increase the demand for healthcare services intrinsically in the country both in the case of B2B and B2C. High usage of technology in terms of advanced analytics, artificial intelligence, machine learning, and going digital is likely to become one of the biggest markets of the healthcare segment in the coming times, attracting many foreign players to invest in homegrown tech start-ups.
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