Consulting Firm Deloitte in India is seeing a positive environment for the private equity (PE) players and venture capitalists (VCs) in Indian healthcare space as they have significantly enhanced their funding in the healthcare space to almost US$ 1.3 billion in 2012 from US$ 345 million in 2009.
Over the five years, the fund infusion has tripled with a rapid increase of private equity and venture capital funds into Indian healthcare. “This augurs well but the need is to further increase the investments for progressive and innovative development of the sector. Investors can prove to be important facilitators for these collaborations and innovations,” Charu Sehgal, senior director and lifesciences leader, consulting firm Deloitte in India told Pharmabiz over email.
A majority of the investments have either been growth-stage deals or late-stage ventures which amounted to US$ 0.7 billion invested in late stage ventures of the total US$ 1.3 billion in 2012. The investors need to increasingly partner with entrepreneurs and explore early-stage investment to drive business model innovations and not just product innovations. Such innovations, going forward, will largely be achieved through collaborations amongst stakeholders, she added.
Healthcare in India has historically been plagued with issues of inequitable access, limited affordability and below par quality of care. However, recent developments have put healthcare at a very interesting juncture where multiple entities are taking initiatives aimed at improving the country’s healthcare financing and delivery.
Both the government and the private sector are working towards innovative solutions to our healthcare issues. The Government has set out a vision of universal health coverage and is committing itself to increasing expenditure on health; the private players have been undertaking several innovative measures geared towards improving access, affordability and quality. The initiatives undertaken range from low cost hospitals for tier 2/3 cities to cheaper no-frills medical devices and diagnostics to increase usage of technology for home based care.
While a start has been made, these innovations have largely been at an individual entity level. Healthcare is a complex sector and successful health outcomes depend on the smooth functioning of several stakeholders along the healthcare continuum. These include providers, payers, pharmaceutical companies, medical technology and equipment manufacturers as well as the medical education players. Innovations driven by single entities will not be able to reach the desired scale and impact. Stakeholders will increasingly need to ‘collaborate to innovate’, said the Deloitte senior director and lifesciences leader.