Healthcare Scenario - India

Current Healthcare Landscape 103,000 crores / annum spend on healthcare 5.2 % of GDP 86,000 crores is the healthcare delivery market 17,000 crores is the retail pharma market This spending matches that of other developing countries as a percentage of GDP but is low on a per capita basis Therefore,it lags behind other developing countries on key health indicators like life expectancy,infant mortality & morbidity

103,000 crores / annum spend on healthcare

5.2 % of GDP

86,000 crores is the healthcare delivery market

17,000 crores is the retail pharma market

This spending matches that of other developing countries as a percentage of GDP but is low on a per capita basis

Therefore,it lags behind other developing countries on key health indicators like life expectancy,infant mortality & morbidity

Share of different payors 100%=86,000 crores Private providers capture 64 % of 86,000 crores

100%=86,000 crores

Private providers capture 64 % of 86,000 crores

Breakup of government spend 100%=17,000 crores

100%=17,000 crores

Secondary & Tertiary Care Government spend utilization among various strata of society 100%=10,000 crores Poorest 40 % receive only 20 % of govt. spend on secondary & tertiary care

100%=10,000 crores

Poorest 40 % receive only 20 % of govt. spend on secondary & tertiary care

Distribution of private hospitals by bed size 100%= 35,000 – 45,000 pvt hospitals & nursing homes Avg. size of hospital = 22 beds

100%= 35,000 – 45,000 pvt hospitals & nursing homes

Avg. size of hospital = 22 beds

Key findings of current private spending Private spending on healthcare delivery 69,000 crores 61 % of this is spend on OPD services = 44,000 crores Indicates low levels of affordability & a disease pattern dominated by infections 39 % on IPD services = 25,000 crores 85 % of IPD spend is in 5 areas : cardio,cancer,accidents,infections & maternity Urban Indians & the rich account for a disproportionate share of the spend

Private spending on healthcare delivery 69,000 crores

61 % of this is spend on OPD services = 44,000 crores

Indicates low levels of affordability & a disease pattern dominated by infections

39 % on IPD services = 25,000 crores

85 % of IPD spend is in 5 areas : cardio,cancer,accidents,infections & maternity

Urban Indians & the rich account for a disproportionate share of the spend

Key findings of current private IPD spending Private IPD spending , 100%=25,000 crores 4250 17 5,800 Maternity 5500 22 4,100 Infections 4750 19 9,700 Accidents 3250 13 29,600 Cancer 3500 14 29,600 Cardio Value of total private IPD market -crores % of total private IPD market Rs.per inpatient treatment Disease segment

Private IPD spending , 100%=25,000 crores

Healthcare spending by income segment 100 % = 1 bn 69,000 25,000 44,000 Higher share of rich : higher price/treatment hospitilisation 24,000 Rs compared to avg.8000 Rs higher treatment rate (50 % higher than avg.)

Higher share of rich :

higher price/treatment

hospitilisation 24,000 Rs

compared to avg.8000 Rs

higher treatment rate

(50 % higher than avg.)

Healthcare spending – urban vs rural 100 % = 1 bn 69,000 25,000 44,000 Higher share of urban : higher proportion of rich households (20 % compared to 2%) better access & treatment rates

Higher share of urban :

higher proportion of rich

households (20 %

compared to 2%)

better access & treatment

rates

Road Ahead - 2012 Private spending on healthcare delivery 156,000 crores because of increase population will lead to increase treatments change in socio-economic mix will lead to 8 % increase in treatment rate & 30 % increase in avg.price paid Change in prices – 26 % increase in price per treatment Change in mix of diseases – 50 % increase in prevalence of lifestyle diseases will lead to 12% increase in treatment rate & 7 % in price This would lead to a change in GDP from 5.2%to 6.2% Richest 15%will account for 50% of all private healthcare spending & 60% of inpatient spend Private spending would increase by another 39,000 crores if the insurance is likely to impact on middle-income households approx. 350 million in 2012 leading to achieving GDP spending to 7.5% & private spending on healthcare delivery to 195,000crores

Private spending on healthcare delivery 156,000 crores because of

increase population will lead to increase treatments

change in socio-economic mix will lead to 8 % increase in treatment rate & 30 % increase in avg.price paid

Change in prices – 26 % increase in price per treatment

Change in mix of diseases – 50 % increase in prevalence of lifestyle diseases will lead to 12% increase in treatment rate & 7 % in price

This would lead to a change in GDP from 5.2%to 6.2%

Richest 15%will account for 50% of all private healthcare spending & 60% of inpatient spend

Private spending would increase by another 39,000 crores if the insurance is likely to impact on middle-income households approx. 350 million in 2012 leading to achieving GDP spending to 7.5% & private spending on healthcare delivery to 195,000crores

Road Ahead - 2012 6.2 – 8.5 5.2 GDP - % 14 22 Infections % - IPD 17 19 Accidents %-IPD 16 17 Maternity % -IPD 19 13 Cancer % - IPD 18 14 Cardio % - IPD 74,000 crores 25,000 crores IPD spending 82,000 crores 44,000 crores OPD spending 156,000 crores 69,000 crores Total Pvt. spending 2012 2001 Parameter

Health Infrastructure * Per 1000 Population Rs.1,00,000 cr. (U.S.$ 22 Bn.) Total Healthcare Market 1.08 Bn. Population 3,00,000 Medical Reps 5,00,000 Chemists 171 Medical Colleges 1,64,000 Primary Health Centres/ Community Health Centres 9,14,543 (0.84)* Hospital Beds 17,300 Hospitals 8,36,000 (0.77) * Nurses 6,25,130 (0.58) * Doctors

Health Indicators 2004-05 1980-81 1950-51 36.7 146.0 25.0 40.8 54.0 110.0 12.5 33.9 65.4 Life Expectancy (years) 60.0 Infant Mortality Rate (per 1000 live births) 8.0 Death Rate (per 1000) 24.8 Birth Rate (per 1000)

Disease Burden in India – but only – 2% of world wide GDP 1% of world HEALTHCARE INVESTMENT 16% of world wide POPULATION 18% of world wide MORTALITY 20% of world wide MORBIDITY

1% of world HEALTHCARE INVESTMENT

Malaria staging a resurgence with ~50% rise in incidence of P-Falciparum Malaria, Dengue & Chikungunya. No significant decline in TB infection with growing incidence of drug resistance HIV/AIDS an epidemic in making – from a few thousand in the early 1990s to a working estimate of 5.1 million children and adults living with HIV/AIDS in 2003 of whom ~39.6% are women/ children. Globally India is second only to South Africa in terms of the overall number of people living with the disease High Morbidity due to incidence of Water-borne infections Growing mortality through Life style diseases Source: http://www.avert.org/aidsindia.htm ; http://www.avert.org/indiaaids.htm ; Health challenges ahead for India

Malaria staging a resurgence with ~50% rise in incidence of P-Falciparum Malaria, Dengue & Chikungunya.

No significant decline in TB infection with growing incidence of drug resistance

HIV/AIDS an epidemic in making –

from a few thousand in the early 1990s to a working estimate of 5.1 million children and adults living with HIV/AIDS in 2003 of whom ~39.6% are women/ children.

Globally India is second only to South Africa in terms of the overall number of people living with the disease

High Morbidity due to incidence of Water-borne infections

Growing mortality through Life style diseases

Source: http://www.avert.org/aidsindia.htm ; http://www.avert.org/indiaaids.htm ;

Health challenges ahead for India

Source: India’s Union Health Ministry, 2004 Statistics Results of India’s Health Reforms… … but Challenges remain Eradicated >39,792 N/A Guinea worm, number of cases Eradicated >44,800 Polio, number of cases 1.78 2.2 2.7 75.0 Malaria, millions of cases 2.79 3.74 57.3 38.1 Leprosy, cases per 10,000 people 2003 2000 1981 1951 Diseases in India

Source: India’s Union Health Ministry, 2004 Statistics

Results of India’s Health Reforms…

… but Challenges remain

in USD Per capita drug expenditure in India is among the lowest (no reimbursement / low govt. spend) Source : OPPI Government spending on healthcare is just ~ 0.9% of GDP against ~ 5% of global average. Huge burden on out of pocket expenditure limits the per capita drug expenditure Liberalisation of insurance sector is likely to fuel market growth

Government spending on healthcare is just ~ 0.9% of GDP against ~ 5% of global average.

Huge burden on out of pocket expenditure limits the per capita drug expenditure

Liberalisation of insurance sector is likely to fuel market growth

Healthcare Spend As % Of GDP Spend Source : WHO 6.0 7.9 10.9 5.8 7.6 14.6

Who spends ? Source: WHO

The real issue of concern is access to medicines Diseases of poverty and the 10/90 Gap, International Policy Network, November 2004 Therefore this exercise can at best address issues within 35% of the Indian population that can access medicines. These 350 mn people are largely clustered around urban centres where health care facilities exist. Industry can work with government to ensure that access levels are maintained and further improved in the post patent era.

Common Myths: Medicine Costs are too High Reality: Medicines = Small %age of Healthcare Expenditure 7% Others 8% Miscellaneous 20% Transport 17% Hospitalisation 24% Diagnostic Investigations & Pathological Tests 15% Medicines 9% Doctor’s Fees