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Healthcare

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Healthcare

June, 2011

Brief Overview

The Indian healthcare market is one of the prominent contributors to the country’s gross domestic product (GDP) having attracted large number of players- domestic as well as international – during the past few years. Highly qualified doctors and scientists, state-of-the-art technology and low costs have helped India become an attractive global destination for medical tourism, clinical studies, and research and development (R&D) programs.

The sector offers massive growth potential and a chance to capitalise on its expansion, especially as the country sees a rise in the incidence of lifestyle-related diseases. A growing elderly population paired with a rise in income levels also emphasise the need for better facilities in the country.

The sector comprises the hospitals and allied sectors such as diagnostics and pathology, medical equipment and supplies, and medical tourism

Healthcare – Market Size

The US$ 50 billion-a-year health care industry has grown rapidly and is now the second-largest service-sector employer in the country, providing jobs to about 4.5 million people directly or indirectly. The Indian healthcare sector will double its size to US$ 100 billion by 2015, according to ratings agency Fitch.

By 2020, the Indian healthcare industry is estimated to be worth US$ 275.6 billion. Currently, 8 per cent of India’s GDP is spent on healthcare. India needs to spend at least US$ 80 billion more in the next five years to meet targets, according to Mr Pradipta K Mohapatra, Chairman, Executive & Business Coaching Foundation India Ltd and Past Chairman, Confederation of Indian Industry (CII), Southern Region.

According to another report ‘Healthcare Opportunities in India’ by UK Trade and Investment (UKTI), India’s healthcare industry is estimated to reach US$ 75 billion by 2012 and US$ 150 billion by 2017.

Healthcare – Trends and Investments

Apollo Hospitals Enterprise Ltd and University College London (UCL) have signed a memorandum of understanding (MoU) to collaborate their efforts in training and clinical research. The strategic partnership would aim to promote and conduct educational and research initiatives in health sciences.

The rural healthcare sector is also on an upsurge. The Rural Health Survey Report 2010, released by the Ministry of Health, stated that the number of Sub Centres existing as on March 2010 increased from 146,026 in 2005 to 147,069 in 2010. The report further stated that there is an increase of 437 primary health centres (PHCs) in 2010. Moreover, Number of nurses at PHCs and community health centres (CHCs) have increased from 28,930 in 2005 to 58,450 in 2010.

As per the data released by the Department of Industrial Policy and Promotion (DIPP), the drugs and pharmaceuticals sector has attracted foreign direct investment (FDI) worth US$ 2.4 billion between April 2000 and April 2011, while hospitals and diagnostic centres have received FDI worth US$ 1.03 billion in the same period.

With an intention to revolutionise the critical care segment, Philips Electronics India is ready to develop the country’s first virtual ICU soon. The company is already having discussions with major multi-specialty tertiary care hospital groups to launch a technology called eICU by 2012.

Wipro Technologies has launched a service that aims at helping drug development owners (DDOs), clinical research organisations (CROs) and regulators to improve collaboration for multi-region clinical trials. The service, Wipro Clinical Collaboration Portal is a secure cloud-based productised solution

Foraying into the healthcare sector, Manappuram Health Care Ltd plans to invest US$ 222.27 million over 2011-16 to set up a chain of medical, dental clinics and diagnostics centres across South India. The entity is a venture of the Manappuram Group of companies.

Fortis Healthcare plans to launch low cost hospitals in smaller towns under a new brand and has set a target of 25 hospitals in three years.

Significantly, in the last year or so, investors have shown significant investors interest in India's US$ 2-3 billion a year eye care market currently dominated by individual ophthalmologists, government hospitals and charitable trusts.

Specialist eye hospitals chain Vasan Healthcare is in advanced discussions for the sale of its 15 per cent stake to Singapore sovereign wealth fund GIC for around US$ 75-100 million