The government’s focus on creating healthcare facilities in rural India is crucial for providing primary healthcare services to the rural population. This helps in improving access to healthcare services for people living in remote areas.
In addition, the government’s efforts to ensure the availability of diagnostics are important for early detection and treatment of diseases. This helps in improving healthcare outcomes and reducing the burden on patients.
The funding of medical insurance through Ayushman Bharat is a significant step towards providing financial protection to the low-income population. It helps in making healthcare affordable and accessible to those who cannot afford it.
The government’s initiative to promote the use of generic medicines through Jan Aushadhi centres aims to reduce the cost of healthcare and increase the availability of affordable medicines. This is particularly beneficial for low-income individuals who rely on medication for their healthcare needs.
Furthermore, the government’s investment in research and development in medical technologies and diagnostics through various labs and the Indian Council of Medical Research (ICMR) is essential for advancing healthcare innovation and improving the quality of healthcare services in the country.
In 2023, the Indian healthcare industry continued to grow and reached a value of USD 372 billion. This growth was driven by both the private sector and the government. The government has been playing a critical role in the sector by focusing on creating healthcare facilities in rural areas for primary healthcare and ensuring the availability of diagnostics. They have also been funding medical insurance for the low-income population through Ayushman Bharat and promoting the use of generic medicines through Jan Aushadhi centres. Additionally, the government has been investing in research and development in medical technologies and diagnostics through various labs and the Indian Council of Medical Research (ICMR). The government’s spending on healthcare now accounts for 2.1% of GDP, which is 33% higher compared to FY19. Furthermore, the government has been allocating investments to support healthcare start-ups and the overall ecosystem.
On the other hand, the private sector has been investing strongly in capacity creation across areas (hospitals, diagnostics, medical devices etc.) as well as laying the foundation for long-term growth through skill development.
Medical insurance penetration has grown rapidly over the past few years. Out-of-pocket spending on healthcare is now at 45 per cent (in 2020) compared to 63 per cent in 2014.
Key Emerging Trends in 2024 for the Indian Healthcare Industry
1. COVID-Induced Transformations in Healthcare
* The COVID-19 pandemic has brought about significant changes in the healthcare landscape of India, with specific trends in patient behaviour that are here to stay.
* Telemedicine and Remote Healthcare have seen a surge in popularity, thanks to advancements in mobile and internet connectivity, making it more accessible to patients across the country.
- Leading hospitals and private players have embraced this shift towards virtual healthcare, offering consultations and follow-ups remotely.
2. Consolidation in Hospitals Sector
* A noticeable trend in the healthcare industry is the consolidation of hospitals, where large PE firms, MNCs, and national chains are acquiring smaller standalone hospitals in both major cities and Tier-2/3 towns.
- Factors such as the lack of succession planning in family-owned hospitals, compliance challenges like EWS reservations, and difficulty in competing with larger establishments have contributed to this trend.
3. Increased Indigenisation and Local Manufacturing in India
* The push for local manufacturing of medical devices and components has gained momentum in India, with a focus on moving beyond mere assembly.
* The successful PLI scheme of the Government of India has provided a boost to this initiative, which will continue to grow in 2024 with the implementation of the Public Procurement Order.
* Developing MedTech clusters and enhancing the GeM platform will further drive the localization of healthcare equipment.
4. Advent of Digital Tech-driven Healthcare
* Digital technologies are set to revolutionize healthcare practices in various areas, including diagnosis technologies utilizing AI in medical imaging and smart wearables for real-time diagnostics.
* Service delivery enhancements through automation and omnichannel platforms, along with the optimization of healthcare delivery utilizing big data and analytics, will reshape the industry.
* Point of Care Testing technologies will improve the accessibility of tests in remote areas, although quality standards, reliability, and costs must be carefully monitored.
5. Govt.-Industry Partnerships
* Public-private partnerships will play a vital role in increasing the availability of quality testing at government hospitals, especially in rural regions.
* Strengthening collaborations between the government and industry will be crucial in addressing the training and skill gaps prevalent in the healthcare sector.
6. Focus on Compliance and Quality Standards
* 2024 will witness heightened regulatory scrutiny on the medical devices industry, particularly with implementing standards for Class C and D devices.
* Ensuring uniform quality standards, testing protocols, and validation processes will be imperative for the industry’s growth and sustainability.
* The standardisation of diagnostic labs will also see a boost, with the widespread adoption of accreditations for maintaining quality standards.
An Overview of the Indian Pharma Industry in 2023
The Indian healthcare industry has witnessed robust growth in 2023, building upon the momentum gained during the COVID-19 period. Specifically, the pharma sector has maintained its strong position, with projections indicating a healthy growth trajectory in various segments. Let’s delve into the details of the Indian pharma industry landscape in 2023.
1. Domestic Pharma Market Trends
✧ Shift Towards Volume Growth: The traditional success model based on brand recognition, distribution, and doctor reach is evolving. Price pressures and increased competition necessitate a focus on volume rather than just value growth in the domestic market.
✧ Emphasis on Quality: The government is prioritizing quality standards, leading to a crackdown on sub-standard players. This trend favours consolidation among quality-conscious players, both in-house and through contract manufacturing.
✧ Differentiation Strategies: Successful pharma players are adopting strategies centred around speciality products, targeting regional micro-markets, and enhancing patient engagement through digital initiatives and holistic healthcare approaches.
2. Exports Market Dynamics
✧ Challenges in the US Market: Pricing pressures, heightened competition, and regulatory hurdles pose challenges to growth in the formulations export segment. Indian players need to navigate these complexities effectively.
✧ Focus on Diversification: Indian exporters are diversifying their product portfolios to include complex generics and novel formulations. This diversification strategy is crucial for sustained growth in the global market.
✧ R&D Priorities: Research and development efforts are primarily directed towards innovation in formulation and delivery technologies for complex generics. Limited emphasis on new chemical entities (NCEs) highlights the industry’s strategic focus.
3. APIs Landscape
✧ Indigenous Production: Government initiatives like the Production Linked Incentive (PLI) scheme aim to reduce dependence on Chinese APIs. Indian companies are ramping up efforts to localize intermediate products and enhance competitiveness.
✧ Market Expansion: The emphasis on indigenisation and import substitution is expected to accelerate market growth in the medium term. With a focus on competitive intermediates, the API segment is poised for significant transformation.
✧ Consolidation and Expansion: Private equity-led consortiums are driving consolidation and investments in the API sector. This trend is likely to bolster scalability and pave the way for potential forays into contract development and manufacturing organizations (CDMOs).
In conclusion, the Indian healthcare industry, particularly the pharma sector, is primed for continued growth and evolution in 2023. As the landscape undergoes significant shifts driven by regulatory changes, market dynamics, and technological advancements, stakeholders must adapt strategically to harness the full potential of this thriving sector.
Remember, the future of the Indian healthcare industry is bright, and the opportunities for innovation and growth are boundless. Stay tuned for more insights and updates on the dynamic landscape of healthcare in India. Let’s collectively work towards a healthier and more prosperous future!
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