Medical Diagnostics - India - Sample

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The medical diagnostics market accounts for 10% of the healthcare sector’s revenues and is estimated to be worth INR 37.9 bn in 2008. In India, 60-70% of medical treatments are based on laboratory …

The medical diagnostics market accounts for 10% of the healthcare sector’s revenues and is estimated to be worth INR 37.9 bn in 2008. In India, 60-70% of medical treatments are based on laboratory diagnostics tests. Demand for better healthcare services from a population with growing incomes, huge scope for outsourcing, and increasing health insurance coverage is driving the market. Although it remains highly fragmented, the market is witnessing the rapid expansion of organized diagnostic centres adopting innovative business models. Moreover, an increasing number of diagnostic centres and tests is proving lucrative for foreign and domestic IVD manufacturers.

The report begins with an overview on the industry including market size and growth. Diagnostic market is segmented into diagnostic test services market and diagnostic products/instruments market. An analysis of drivers explains growth factors such as increase in life-style related diseases, changing demographics, medical outsourcing, medical tourism, increasing medical insurance coverage and rising PE/VC investment. The key challenges identified include a biased import duty structure and the lack of accreditation/ certification of diagnostics centres.

A large share of medical diagnostics kits and reagents are imported. Therefore, the report provides a detailed study of the rules and regulations applicable to manufacturers/suppliers. The competition section contains a snapshot of the current market scenario. The major players in diagnostic test services market and domestic diagnostic equipment manufacturers have been profiled which includes the business outlook of each company.

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  • 1. Medical Diagnostics - India April 2009
  • 2. Executive Summary SAMPLE Market Drivers & Challenges Rules and Regulations Competition
      • Medical Diagnostic accounts for x% of the healthcare industry in India
      • Diagnostics market comprises of
        • Diagnostic Services Market : Estimated at INR XX bn in 2008
        • Diagnostic Products Market: Estimated at INR YY bn 2008
      • India has more than A laboratories
      • Diagnostic equipments market is regulated by both central and state government
      • Major governing authorities include U,V,W,X
      • Regulatory process for diagnostics equipment is segmented into
        • Critical - A
        • Non critical - B
      • Manufacturers need an import licence and product registration certificate to import diagnostic equipments
      • Diagnostic test services market is highly fragmented with many unorganized players
        • Some of the major players are A,B,C,D
      • Foreign players (like U, V, W ) account for a% share in diagnostic equipment market
        • Some of the major domestic manufacturers are X,Y,Z
      • Drivers: Increase in lifestyle-related diseases, changing demographics, growth in medical outsourcing, medical tourism, nascent but growing medical insurance, rising PE/VC investments
      • Challenges: Difference in import duty on diagnostic kits for public and private sector and Lack of accreditation/certification of diagnostic centers
  • 3.
    • Market Overview
    • Drivers & Challenges
    • Rules & Regulations for Manufacturers/Suppliers
    • Competition
    • Key Developments
  • 4. Indian diagnostics market is witnessing significant growth with major contribution from the In-Vitro Diagnostic (IVD) segment
    • Indian diagnostic market comprises of
      • Diagnostic test services market
      • Diagnostic products/instruments market
    • Diagnostic market accounts for x% of healthcare sector
    • India currently has over A hospitals and B diagnostic laboratories
    • About c% of the treatments in India are based on lab diagnostic tests
    SAMPLE Market Overview Diagnostic Test Services Market Source: g% Microbiology h% Coagulation Immunology c% Haematology d% Critical care e% Urine Routine f% Others a% BioChemistry b% U 2006 V 2007 W 2008 b% INR bn IVD Instruments & Reagent Market IVD Test Segments (2008) 2006 Y 2007 Z 2008 a% INR bn X Market size estimation is difficult as diagnostic market is highly unorganized In 2008, IVD services market was INR XX bn
  • 5. Drivers & Challenges Increase in lifestyle-related diseases Changing demographics Rising PE/VC investments Increasing penetration of medical insurance Rapid growth of India as a destination for medical tourism Growth in medical outsourcing Drivers Lack of accreditation/certification of diagnostic centers Difference in import duty on diagnostic kits for public and private sector Challenges
  • 6. Organized pathlabs are rapidly expanding using the hub and spoke model, including small, independent labs in the network
    • Highly fragmented with ~X laboratories:
      • Hospitals: a%
      • Independent labs: b%
    • Among the labs in India
      • Automated – u%
      • Semi - Automated – v%
      • Manual – w%
    • Organized players account for z% of market and expanding with ‘hub and spoke’ model:
      • Reference labs act as regional hubs and are usually located in large metros
      • Collection centres are located in hospitals, nursing homes, pathology labs, doctor’s clinics etc.
      • Satellite labs and collection centres are either owned or franchised
    • As organized players grows their share, small, independent labs are:
      • Becoming franchisees in the hub and spoke model
      • Partnering with large chains on referral basis
      • Getting acquired by large chains, which lowers the cost of expansion and start-up time for the latter
    SAMPLE CC Reference Lab CC CC CC Satellite Lab Satellite Lab CC CC CC CC Diagnostic Testing Market Structure Hub and Spoke Model
    • Reference labs : Hub with comprehensive or specialized testing capability
    • Satellite labs : Limited testing capability; ‘feed’ reference labs
    • Collection centres (CC) : Collect samples for forwarding to either a satellite lab or reference lab
    • A variation in this model is the absence of satellite labs and the existence of only reference labs and collection centres
    Source:
  • 7. Manufacturers – IVD Products/Instruments Market
    • The IVD products market in India is primarily dominated by foreign companies
    • Global IVD companies like A,B,C,D have strong presence in the Indian market
    • Domestic players have forayed into the market and are establishing themselves by producing cost effective and quality goods
    • a% of diagnostic medical equipment and supplies is imported
    • Low-cost reagent kits are being imported from X,Y and Z
    SAMPLE Players in the market IVD Products Market Share (2008) Foreign Players b% Domestic Players a% Source: 14%
  • 8. Major Players – Diagnostic Test Services Market (1/2) SAMPLE Note: This list is not exhaustive Source:
    • Established an international alliance with U for testing
    • Planning to set up -- labs and -- collection centers by 20--
    • Expand operations in southern and western regions investing INR X mn
    • Planning to invest INR Z mn in brand building
    • Started in 19--
    • A labs and B sample collection centers
    • Accreditation: NABL, CAP
    Y
    • Growing inorganically
    • It is looking at overseas expansion as well as outsourcing opportunities
    • Plans on increasing their portfolio to X more labs
    • Targeted revenue of INR X bn by 20--
    • In 20--, acquired two labs in North India and a majority stake in Bangalore based YY
    • Started in 19--
    • U laboratories across V cities globally, W laboratories in India, X collection centers
    • Capability to carry over A routine investigations with over B technologies - e.g. biochip, DNA sequencing, pathology, radiology
    • ICICI Ventures owns a% of the company
    • Accreditation: CAP, NABL
    Z
    • Entered into a JV with V to set up a diagnostic laboratory in Hyderabad at an investment of USD YY mn
    • Started in 19--
    • Diagnostic facilities in their subsidiary U
    • Facilities allow for investigation in Biochemistry, Haematology, Clinical Pathology, Microbiology, X-ray, Ultrasound with Color Doppler, ECG, Echo Cardiography and Treadmill
    X Business Outlook Overview Company
  • 9. Thank you for the attention About Netscribes Netscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives. The Medical Diagnostics report is a part of Research on India’s Healthcare Industry Series. For more detailed information or customized research requirements please contact: Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Netscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. Natasha Mehta, CFA Phone: +65 8448 0449 E-Mail: [email_address] Gagan Uppal Phone: +91 98364 71499 E-Mail: [email_address] Research on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick insights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries on