Even as the Indian healthcare industry is set to become a $75 billion industry by 2015 taking a leap jump from the present $40 billion, there is need for massive investments from both public and private sectors to meet the healthcare demand, according to Kewal Handa, former managing director, Pfizer and past president, All India Management Association (AIMA).
Intellectual Property (IP), innovation, healthcare infrastructure, insurance coverage, disease prevalence, and patient population are the key fundamentals driving the healthcare industry into the future, Handa added.
Quoting the Ernst & Young report, he said the current density demand indicated shortfall of hospital beds, doctors and nurses. The estimated requirement by 2025 is 1.75 million beds, 0.7 million doctors and 1.6 million nurse. Achieving this target will require a total investment of US$ 77.9 billion.
Pharma market is expected to grow to US$ 54 billion. In 2010, it was cardiovascular and diabetes which are the fastest growing and the two diseases will continue to register 18 per cent and 20 per cent growth in terms of hospital admissions and therapies, he said.
The healthcare spends too are largely out of pocket market estimated at 75 per cent given the low government spending on healthcare. Of course, the government spending on healthcare is likely to remain at one to two per cent for the next 10 years.
It would only be the rising incomes and infrastructure improvements which would create new opportunities. This is opening up the market for private hospital chains which could expand both geographically especially in the rural areas and in terms of capacity in the urban zones. There is ample scope for the development of private specialty hospitals and private hospitals to drive adoption of treatment standards, he said.
While urban centres should clearly be the main focus, rural is the next frontier and should not be ignored. Increasing disposable income will disproportionately impact the urban population, said Handa who was in Bengaluru in connection with the AIMA conference.
With support from government, private hospital chains can grow the channel. The attractive tax breaks have seen private hospital chains taking the opportunity to expand. Hospital chains will grow to $10 billion by 2020. Specialized centres will emerges for secondary and tertiary care which include eye procedures and chronic care. These private chains will drive adoption of treatment protocols, set price levels, and facilitate building of brands.
Further, the government has plans to expand the benefits of healthcare. It is committed to provide larger access with free medicines, generics pharmacies, insurance coverage, universal healthcare and expansion of price control, he pointed out.
In addition, technology is also driving the future of healthcare. There is need to expand reach and increasing in-clinic effectiveness, engage physician community through digital media, optimize marketing spend and grow revenue, Handa said.
From a pharma perspective, there is a distinction between local competitors and multinational companies as the latter disappears given the high level of partnership and acquisitions. Today MNCs succeed through global practices with local market approach. Indian companies are gaining acceptance due to their transnational presence. However, there is consolidation of market results in high entry barrier. This is where wide basket of therapies is viewed critical for growth. Therefore what is being observed is that IP, infrastructure and insurance are set to catapult healthcare to the next level of growth, said Handa.