Despite the pandemic having a severe impact on a number of
industries, the diagnostic sector is set to have a speedy recovery. A drastic
shift amongst the consumers is expected wherein more focus will be upon
wellness and preventive testing. In pre-Corona pandemic stage, the major
diagnostic service providers such as Dr Lal Path Labs, SRL Diagnostics and
several others were facing the issues like price increase, volume pressure and
rising cost base but post-corona virus outbreak, the worry has shifted to the
sustainability of the business. However, some players are bucking the trend by
adopting innovative strategies and outlooks to stay afloat.
Impact on Diagnostic Laboratory
Market Offerings: Like any other businesses, the diagnostics sector is also
facing severe bottlenecks and patient volumes have come down significantly. As
the lockdown continues, people seek medical care only for emergency or acute
conditions and consequently, demand for diagnostic tests has also reduced. An
assessment by the Federation of Indian Chambers of Commerce and Industry (FICCI)
and Ernst and Young (EY) estimated that the lockdown is likely to result in
operating losses for this quarter of INR 13,400-22,000 crore for hospitals and INR 600-2,200 crore for diagnostic
labs.
Government Initiatives: Initially, it was only the
government labs which were allowed to do testing within India. However due to
high demand, the government gave permission to private labs, who have
accreditations, to also test for COVID-19. According to the government of
India, a cap of INR 4,500 has been set on COVID testing. Despite the Center providing
this figure, the state of Karnataka has imposed a cap of INR 2,250, thereby
increasing the pressure on private labs. One of the biggest cost components is
reagents, priced at INR 800-1,500, and with the cost of transportation and
labour, the figure works out to approximately INR 2,500. An undue cost pressure
is being witnessed in the market, with advance payments becoming a norm for all
manufacturers & suppliers and deferred payments being witnessed from
hospitals (both private and government) to diagnostic players. Few of the
private firms which are allowed to do Covid-19 testing include Dr. Lal
Pathlabs, SRL Diagnostics, Roche Diagnostics etc.
Research on Vaccines: Pune-based Serum Institute
of India (SII), founded by Cyrus Poonawalla in 1966, is the world's largest
vaccine manufacturer, which produces over 1.5 billion doses and immunizes. It
launched three critical initiatives for defeating COVID-19 virus - one with
UK's Oxford University, one with US-based biotech company Codagenix, and its
own recombinant BCG vaccine. The clinical trials have already commenced in the
UK. The company is simultaneously initiating production as well, in the hope
that when the trials are successful, they would have the first batch of doses
ready for use by September or October. Each vaccine is going to cost
approximately INR 1,000. The decision
has been solely taken to have a jump-start on manufacturing, in order to have
enough doses available and the distribution of the doses will commence only
once the trials are successful and the vaccine is efficacious as well as safe
for use.
Strategies Adopted by Diagnostic Laboratories Players:-
Medall Healthcare: The company has increased
its focus on home collection services and has witnessed a significant growth in
home collection for routine samples across all regions it is operating.
Neuberg Diagnostics: This industry player
ramped up their ‘Anywhere Anytime’ services (home collection service) to offer
free round the clock lab services at the doorstep during the lockdown period.
Neuberg’s full-fledged sample collection and ECG services are offered in
Chennai, Bengaluru, Cochin and Hyderabad.
SRL Diagnostics: This company has
partnered with ‘Housejoy’ in Bengaluru to develop mobile testing vans for
conducting routine pathological tests, primarily in red zones, it also has witnessed
a huge surge in demand for home pick-up of samples. It has also planned to start its
drive-through sites/centers for Covid testing in Jammu by June 2020. It already
has drive-through sites operational in Gurgaon, Chandigarh and Mumbai.
Other Players: Few major players are also eyeing acquiring smaller unorganized players
during this time as many of these unorganized players are facing difficulty in
sustaining their business and the major organized players see this as an
opportunity to expand their operation and customer reach by acquiring existing
business, post an evaluation of their customer catchment area, technology,
quality controls etc. to decide on finding the right targets
to takeover.
Increasing Demand from the Corporate Sector: Dr Dangs laboratories (a major market player) received significant
number of emails from private companies requesting them to test their employees
so that they can resume work. Max Healthcare also confirmed they had been
receiving requests from corporate sector to conduct tests. Airlines and air
travelers have also added to the
rush in
getting RT-PCR tests. Air travelers now need a negative RT-PCR test 48 hours
before they travel, which has resulted in further increase in demand for Covid tests
in the country.
Expectations of the
Industry from the Government: The health industry is significantly strained due to revenue
losses in the current quarter. The industry believes that in the true spirit of
a public-private partnership (PPP), the government should release timely
payments (usually within a week) as per the agreements signed with private
laboratories and hospitals. Rationalization of goods and services tax (GST) for
healthcare services at 0% or 5%, instead of the current exemption from GST, is
a long-standing request of the health sector, which should be considered now.
Due to the exemption, hospitals and labs cannot claim input tax credit, while
the cost of several input products and services has increased in the GST
regime.
Industry’s Future-The Way
Forward: Short-term
interest-free or concessional interest rate loans to address the liquidity gap
in the industry should be facilitated by the government. However, laboratories
need to sustain operations at full scale to support testing for covid-19, which
is increasing on a daily basis with the rise in the number of reported cases in
the country crossing 2,10,000 cases as of 3rd June 2020.
It is expected that post-Covid pandemic, testing for
wellbeing would increase as people will now be making a conscious effort to
stay fit, however testing for sick care would still dominate the market. The
overall market for wellness and preventive diagnostics was approximately 6.0%
in the financial year 2018. It is expected that preventive care/wellbeing
testing segment will now grow at a CAGR of approximately 20.0% over the next
three financial years. Higher literacy levels are expected to increase
awareness of preventive and curative healthcare and in turn boost the demand
for diagnostic services. Health tracking mobile applications and online
services such as booking appointments online for preventive healthcare
checkups, booking a path/lab test, obtaining reports online will further augment
growth in this industry in future.
Key Segments Covered:-
India Diagnostic Laboratories Market
Revenue Segmentation by Government and Private Labs
Government Labs
Private Labs
India Private Diagnostic Laboratories
Market
Revenue Segmentation by
Pathology and Radiology
Pathology Sector
Radiology Sector
Revenue Segmentation by Pathology
Clinical Biology
Hematology
Surgical
Pathology
Histopathology
Clinical
Microbiology
Molecular
Biology
Others
Revenue Segmentation by
Radiology
X-rays
Sonography
MRI
CT
Scans
Mammography
PET
Others
Revenue Segmentation by Business Model
Standalone
Diagnostic Chains
Hospital Based Labs
Revenue Segmentation by Diagnostic Chains
Regional Chains
Large PAN-India Chains
Revenue Segmentation by Tier I, II and III Cities
Tier I cities
Tier II cities
Tier III cities
Revenue Segmentation by Organized and Unorganized Players
Revenue Segmentation by Type of Customers
Referrals
Walk Ins
Corporate Client
Revenue Segmentation by Payment Method
Out of Pocket Expenditure
Corporate Spending
Insurance
Key Target Audience:-
Government Diagnostic Labs
Private Diagnostic Labs
Research Labs
Medical Insurance Companies
Medical Device Manufacturers
Industry Associations
Government Bodies
Investors/VC’s
Time Period Captured in the Report:-
Historical Period: FY’2015-FY’2020
Forecast Period: FY’2020-FY’2025
Companies
Mentioned:-
Dr. Lal Pathlabs
SRL Diagnostics
Metropolis Healthcare
Thyrocare Technologies
Medall Healthcare Pvt Ltd
Suraksha Diagnostics Pvt Ltd
Suburban Diagnostics
Neuberg Diagnostics
For More Information on the research report, refer to below
link:-
Related
Reports:-
Contact Us:-
Ken Research
Ankur Gupta, Head Marketing & Communications
+91-9015378249
No comments:
Post a Comment