India Diagnostic Laboratories Market Outlook to 2025: Ken Research

Analyst at Ken Research in their latest publication “India Diagnostic Laboratories Market Outlook to 2025 - By Government and Private Labs, By Radiology and Pathology, By Organized and Unorganized Players, By Business Model (Standalone, Hospital Based and Diagnostic Chains), By Cities (Tier I, Tier II and Tier III cities) and By Payment Method (Out of Pocket Expenditure, Insurance based and Corporate Spending” believe that the market is highly fragmented and there is a dire need for strict regulations. These regulations would help bring about uniformity along with high quality testing standards in the industry. The report further talks about the ecosystem of the diagnostic labs present in India along with a number of segmentations such as radiology and pathology, types of models used, organized and unorganized players and many more. It also provides an investment model for a franchise lab to open up in India. There have been a number of research projects focusing on innovative and less invasive forms of testing. Some of the challenges faced by this industry include price differentiation, lack of knowledge at the consumer end and lack of regulations. Despite the COVID-19 pandemic, this industry sees a bright future. People will be more aware of their health & lifestyle choices and hence, there would definitely be a rise in wellness/preventive testing, helping the diagnostic laboratory market of India to grow further in the coming years.

Industry Overview

The market is highly fragmented with only four major PAN-India level players. It is still at its’ growing stage. However, the unorganized sector dominates the market’s revenue currently. The highest penetration of the labs is in Tier I cities, which is also the place for their reference labs. Digitalisation in the chain of diagnostics has helped remove mistakes from the time the samples have been collected to the last process of delivering the report to the customer. The major drivers for this market include the high elderly population and the shift from non-communicable to communicable diseases in India. Radiology test market has evolved over time with the advancement in the existing technology of imaging machines such as PET-scan which added more clarity in the diagnosis of the patient’s disease. Whereas for pathology, the segment has gained dominance in the market owing to the fact that it is the preferred line of diagnosis for the majority of diseases prevalent in India including infectious diseases.

Industry Segmentation

The report explores segments such as government and private diagnostic labs within the country. It is the private diagnostic labs market which is further broken down into various segments. The market is dominated by unorganized players. Medical insurance in the country is currently focused upon the clinical side and not so much towards the diagnostic sector. As of now, majority of the payment is done through out of pocket expenditure. There are a number of standalone centers in the market which hold the highest share. The diagnostic chains are further split into regional and PAN-India level labs. Within the Indian market, there are a number of doctors who have tie ups with labs and hence the customers coming from a referral hold a prominent share in the overall market. The revenue earned by a lab from a referral customer is split between the doctor and the lab. In the future, it is expected that testing for wellbeing would increase as people are now making a conscious effort to stay fit, however testing for sick care would still dominate the market.

Bottlenecks Faced in the Industry

Due to lack of regulations, there are hardly any barriers to entry. As a result there are a number of labs which have opened throughout the country. Majority of them fail to follow protocols and lack accreditations. There is also a lack of price standardization due to which there is a high level of discrepancies between diagnostic test prices of Tier I and Tier III cities. The penetration of labs in the rural parts of India is also low. When compared to a developed market like that of UK wherein 80% of the medical expense is incurred by the government, India falls behind in both aspects and is inclined towards out of pocket expenditure.

Competition Scenario in the Industry

The market structure is highly fragmented with unorganized players dominating the industry and has presence majorly in Tier-2 and Tier-3 cities. In the past few years, there have been a number of acquisitions and mergers with larger players acquiring smaller players helping the organized sector grow. It also facilitates a larger reach and more comprehensive test menus. There are majorly four PAN-India players which are well established in the market, they include Dr. Lal Pathlabs, Thyrocare Technologies, Metropolis Healthcare and SRL Diagnostics. These labs give utmost focus on research and development in order to introduce new and less invasive tests.

Future Strategies-The Way Forward

Government regulations are in focus which would help in streamlining the market in the coming years. As more companies enter the organized sector, there would be an increasing emphasis on the hub and spoke model in order to bring in volumes required for a commercial entity to survive in the market. Growth of 3D printing, which allows radiologists and clinicians to bring to life body parts and tumors which were previously available only as flat diagrams, will help revolutionize the market. India is set to increase its public health spending to 2.5% of its GDP by 2025 which would help cut down on out of pocket expenditure on healthcare services. This would be a major boost to the diagnostic sector of the industry. Consumer satisfaction would be a focus point in order to retain brand equity. Home sample collections are expected to further increase thereby bringing in convenience to the patient and facilitating further penetration of organized players in the market.

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

Key Topics Covered in the Report:-

Spread of Communicable and Non-Communicable Diseases in India

Market Sizing Analysis of Diagnostic Labs in India

Ecosystem of Diagnostic Labs in India

Operating Models in India Diagnostic Labs

Pricing Analysis in India Diagnostic Labs Market

Value Chain Analysis of India Diagnostic Labs Market

Decision Making Parameters for a Diagnostic Lab

Issues and Challenges in the Industry

Government Regulations in the Industry

Segmentation by Radiology and Pathology

Segmentation by Type of Business Model (Standalone, Hospital Based Labs and Diagnostic Chains)

Upcoming Trends and Technologies in the Market

Competition Scenario and Market Share

Investment Model for a Franchise Lab in India

Success Stories of Diagnostic Labs in India

For More Information on the research report, refer to below link:-

India Diagnostic Laboratories Market

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Ken Research

Ankur Gupta, Head Marketing & Communications

Ankur@kenresearch.com

+91-9015378249

Rise in Demand of Dairy Products to Drive Dry, Condensed, and Evaporated Dairy Product Manufacturing Market: Ken Research

The dry, condensed, and evaporated foodstuff manufacturing market consists of sales of dry, condensed, and evaporated dairy products by entities (organizations, sole traders and partnerships) that produce dry, condensed and evaporated milk and dairy substitute products. The dairy companies operating in the industry package distribute their products over various distribution channels to both individual customers and commercial establishments. The global dairy products industry is beginning to gain more strength as the innovations in technology for providing better quality products, service, measurement and reach of the dairy products and statistically improvised results have made dairy products industry to be one among the most important contributor to the worldwide economy. Of all the products, milk represents quite 35% of overall dairy products consumption within the market. Milk is used by almost all the global population, and used for several purposes, so the milk leads the dairy products market. Milk is the central component of the average diet of majority. Higher demand from emerging economies across the globe and higher feed prices at dairy farms have driven milk prices to shoot up and at the same time, the economic slump has led to lowering of demand over the higher margin for the dairy products.

According to the study “Dry, Condensed, And Evaporated Dairy Product Manufacturing Report 2019” Some of key manufacturers are Nestlé S.A, The J.M. Smucker Company, GCMMF PVT LTD, Magnolia Inc., Goya Foods Inc ,Danone, Amul, Nandini, Dean Foods, Fonterra and Unilever.

Dairy products industry comprises of companies which operate by selling primarily milk, cheese and butter products. Operators in the dairy product industry mainly manufacture dairy products such as pasteurized milk, cream, yogurt, and dry, condensed and evaporated milk. The dairy products industry also manufactures substitute dairy products made up of soybeans and other nondairy ingredients. Dairy products industry has been volatile, particularly due to the fluctuations in raw milk prices and economic recession. But dairy products industry is one of the most dynamic markets worldwide and it is growing rapidly in almost all demographics with thriving success.

Asia Pacific is one of key and leading region for the dairy products manufacturing market followed by Western Europe being the second largest region for dry, condensed, and evaporated dairy product manufacturing market. However, the African region is the smallest region in terms of volume and value for global dry, condensed, and evaporated dairy product manufacturing market.

The demand for clean label products is increasing rapidly due to significant rise in awareness of healthy eating. Clean label dairy products don't contain additives, artificial flavor enhancers, dyes or artificial preservatives. Also, many food service and retail grocery chains are stating lists of ingredients that can't be present in food items in their stores or restaurants. Based on an analysis customers within the UK and Russia nearly 70% of consumers purchasing dairy and bakery products are conscious of clean labels and therefore the presence of unpolluted labels influences their buying decisions and 30% of consumers are trying to find some quite clean label claim.

For More Information, Click on the Link Below:-

Dry Condensed and Evaporated Dairy Product Manufacturing Market

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Ankur Gupta, Head Marketing & Communications

Ankur@kenresearch.com

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Assessment of Existing Product Line Market Outlook: Ken Research

In energetic markets, corporates must continuously announce new products and services to keep up with fluctuating consumer wants and needs. Innovative product generation comprises several stages and a great level of financial investment and has no promise of success. The marketplace is never stagnant: it is energetic and fast fluctuating, and the requirement for the products is continuously fluctuating as needs, requirements, and technology all modification. As a result, corporates must always estimate their existing product line and look for methods to guarantee that it is up to date and in line with customer desires. Unremitting decisions must be finished concerned whether new-fangled products should be added or whether old products should be unconcerned.

In addition, Prodigious Product improvement and conservation are problematic for abundant businesses. It competently includes improving the product lines to match the progression of technology and market modifications. At the same extent, it requires internal organizational conversions to influence functional excellence. Intermittently, the coordination skirmishes. Yet somehow, each business must attempt to develop their skills and proficiencies in this critical substance.

The Ken Research completely recommends your operative observations and knowledge sustenance you and your business comprehend much attain from the good product line stratagems. This comes organized in the practical and opportunely understood. In addition, Ken Research has proficiency in the Decision-Making Analysis in Risk Assessment which can assist you actively to advance the skillful product portfolio comprising a mix of products with different growth rates and market shares.

Whereas, the operative boom up in the product line strategies are the principal of astonishing product improvement and management. For instance, what some don’t recognize is what creates product line strategies, nor do they examine how to transform the poor strategies to better strategies. The market research report of Ken Research can categorically help you to realize the whole the market size of your fundamental product line progresses, trends, growth drivers, issues and challenges, market stage, principal geographies for the market entry, user trends and product innovations, Assessment of Existing Product Line and future calculations.

Although, when the collective, product line strategizing and road diagramming create a powerful technique. The smart managers use this approach to synchronize and speed up an occupation that pulls together and engenders the critical dynamics correlated to a line of products. This sounds unassertive and straightforward, but it is unhinged and thought-provoking. It purposes knowledge winning, business analysis, and strategic thinking. And its utilities towards evolving a product line both competitively and parsimoniously.

Our product line strategies permit you to the gross the improvement of opportunities in the unrelated market segments. We benefit you in intensifying your product line by make to order your remaining product policies and services of inaugurating the new product policy that gratifies the regular requirements in the target segments. We enthusiastically help you in intensifying a product line to enhance consumer loyalty. Not only has this, but our product portfolio strategy can also fund you in articulating a gifted product strategy that can permit you to surpass your business objectives and targets.

For More Information on the assess product portfolio, Click on the Below Link: –

https://www.kenresearch.com/present-product-line.php

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Ankur Gupta, Head Marketing & Communications

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The Future of Diagnostics Market in India: Ken Research

Despite the current situation of COVID-19, the diagnostic market of India has witnessed strong growth. As consumer behavior shift towards preventive testing, there would be more focus and research on molecular and genetic testing. Government initiatives with respect to introduction of industry regulations and insurance could be a game changer for the industry in the coming years.

In conversation with Mr. Arindam Haldar, Chief Executive Officer at SRL Limited, we attempted to seek his opinion and understand his side of story to ‘India Diagnostic Laboratory Market’. He suggested that the diagnostic industry is sure to come back efficiently post the pandemic. They have been focusing on high end testing and are using artificial intelligence to build algorithms which would make testing easier and accurate.

Here are some excerpts of the interview:

Q1. In the past few years, what have been the major trends in the market? According to our research, genetic testing is one sector which has a high potential for growth. What are your view points on the same?

On a broader perspective, yes, the market has been growing in the past five years. There have been a number of trends at the testing level, market level and at the consumer level. Genetic testing would definitely would one of it. There has also been a shift towards preventive testing for the general public. At an overall level, health awareness and consciousness amongst customers is on the rise, and large private chain labs are also improving market accessibility, making sure the highest level of tests are available at all market through their hub & spoke model.

Q.2)  The industry is highly dominated by the unorganised sector. How do you think this affects the overall market?

The organized part of the sector is still minimal. It is difficult to get authenticated; research based proper data, however the general understanding is that the organized sector, which includes national and regional level players, contributes to roughly 17-18% of the overall revenue for the industry.

I would also like to further bifurcate what we call the unorganised sector. The balance 82-83% has a fair play of single owner labs along with labs which are hospital based. The truly unorganized (single lab ownership outside a hospital) would contribute to about 46-47%, however that too is facing a change, because of a number of mergers and acquisitions being witnessed in the market , wherein, the bigger companies are taking over the smaller ones. As for the hospital based lab, it also depends on the kind of hospital, its bed size, the modlaities performed, and level of professionalism, which defines this segment.

Q3. With respect to regulations, despite having the Clinical Establishment Act of 2010, only 17 states have adopted the same. What is your opinion on current industry regulations?

Regulations, or rather the lack of it, are definitely one of the major challenges faced by the industry. At times patients fail to notice, however it affects them as well. The lack of accreditations and quality consciousness within the industry is a serious concern. There are a number of licenses that are needed however; there are hardly any entry barriers. As a result, anyone is able to open a lab. Unlike a large hospital, which would be requiring a large amount of investments, the diagnostic labs do not require that kind of capital. And while we do have a Clinical Establishment Act, the extent of implementation varies from state to state, and finally the quality regulations are predominantly self-professed and self-regulated by labs which believe in quality.

What we need to understand is that the patients or doctors do not get visibility of the actual testing process inside the labs. It is only the final report which is received and close to 70% of doctors’ decisions are based on them. Hence, it is extremely important to have a stringent quality control system in the labs. If I speak about SRL, we have 43 NABL accredited labs, largest in the country. All the other labs are also NABL ready. Us, along with a number of other big companies do follow the same system. If all the labs in the country start following this, it would definitely help the industry grow.  As of now, we want the government to be stricter and bring in norms to push quality standards. Along with the implementation of stricter quality control, there is a dire need for the government to increase healthcare spending.

Q4. If we divide the market into pathology and radiology, according to us ~60% of the share comes from pathology. Would you agree to the same?

Broadly yes, the split would be 60-40, with pathology in the lead. My belief is that the scalability for a pathology lab is higher. For the same, one could always use a hub and spoke model by which economies of scale can be achieved. The growth rate for pathology, due to its geographical spread along with its ability to transport samples, will surely be higher. At the same time with an overall growth of the diagnostic sector, radiology would also grow but may not be at the same pace as a pathology lab, and high end radiology will be mostly centred around hospitals having the relevant medical program.

Q5. If we divide the market on the basis of Tier I, tier II and tier III cities, would it be right to say that majority of the revenue comes from Tier I and Tier II cities? Would this also be because of the concentration of reference labs in these cities? If not, what would be the reason for the same?

Tier I and tier II do provide the majority of the business for diagnostics. However, I do not feel that the location of reference labs dictates this trend. Despite having reference labs in the metropolitan cities, if I speak of SRL, we have the ability to pull in samples from tier II, tier III and rural regions with the help of our regular logistic systems. And this is how it works in the hub and spoke model which is followed by most of the established players.

What we also need to consider is the kind of testing done in reference labs. They mostly have high end esoteric tests, which are related to severe diseases, and people are willing to wait for the results of the same. It is very different for a regular blood based routine tests which might take only a couple of hours to provide results, and the customer expectation of turnaround time is different.

The main reason for the split of revenues from different tiers is because of lack of qualified medical and para medical professionals in smaller cities. It is extremely difficult to get a qualified molecular biologist in a remote district of the country.  We fail to have expert doctors in the smallest of labs. It is for the same reason that high end testing cannot take place in such areas and as a result the revenue share is minimal. Thus, for most major surgeries or complicated medical conditions, patients do travel to nearest large cities, state or district headquarters, where you have better clinics and hospitals. The lab diagnostics revenue mirrors the same trend, as it is a corollary business segment.

Q6. Would medical insurance be a game changer in the market of diagnostics?

Currently testing cost in India is almost 1/5th of that in the United States of America, however it is still not affordable to many middle and lower class families. As of now more than 60% of the expenditure is out of pocket expenditure , insurance coverage would be in single digit and the remaining would be a corporate spent and a little bit of government initiatives taken place in some of the states.

The government is currently trying to bring in schemes such as Ayushman Bharat, which if entered, the diagnostics sector would do wonders as individuals with an Ayushman ID would have an access to diagnosis.

Despite our costs being lower, the reagents and equipments are the same if compared to any other country; and our doctors in the country are equally qualified as their western counterparts. Also, most of the equipment used for conducting tests in India are imported and also come with the impact of import duty. The only way a commercial enterprise can survive in the market would be by consolidating volumes, and getting higher efficiencies from their lab machinery and manpower. This is especially true for high end tests.

Thus, diagnostics tests and OPD coverage under medical insurance for paying patients, and government schemes like PM JAY for poorer sections of the society would surely help both the consumers along with the players in this industry.

Q7. If we divide the market on the basis of the models such as diagnostics chains, hospital based labs and the standalone clinics, how the revenue split be between them?

According to me, the organized (national and regional diagnostic chains) would have about 16-17% of share, hospital based labs would have a share of 36-37% and the balance 46% would be for the standalone labs.

However, in the future there is a possibility of change. The hospital based labs would remain the same but an increase of organized diagnostic chains’ revenue salience to atleast 20% can be expected. This would be at the cost of the standalone labs. Some of the reasons for the same would include mergers and acquisitions wherein the bigger players take over the smaller players. Along with this, the current situation of COVID will make it difficult for the smaller players to sustain in the market.

Q.8. How do you think COVID-19 will affect the diagnostics department of the country?

As of now, I believe that because of the lockdown, there is a short term stump in sales even in healthcare, as it is with other industries. But I strongly believe that in diagnostics, the recovery would be at a faster pace and in an extremely efficient manner. Once can’t specifically mention the exact number of months, but it should be less than a year.

There would be a number of new trends with respect to consumers, company spending and even the involvement of the government. The consciousness amongst consumers is definitely set to go up, people would want to understand their immunity levels in general. People also understand what molecular testing is, thanks to higher consciousness of RT PCR tests for COVID-19. There would not only be a rise in preventive checkups but also in preventive genetic testing.

Even for the corporates, spending on the health of their employees would go up. I also hope the government expenditure on healthcare would increase in the coming years. The aim should be to reach out to the people who currently do not have an access to medical healthcare facilities.

Q9. SRL being a major part of this industry, how do you see its growth in the next few years? What are the future plans for the company?

Despite the pandemic, we remain bullish on the future. We expect the challenges to be short term in nature and we expect to get back to normal in the long run. We are expecting a number of growth areas for the same, first being the specialized side of the business such as molecular biology and clinical pathology. Our specialization also lies in the same. People have recently started talking about RT-PCR tests due to Covid tests being done on this platform, but for us we had our first one back in 2002. If I’m not wrong, we were probably the first private lab outside a hospital to conduct the same in India. Being in the molecular sector for this long, our expertise lies here. We expect both B2B and B2C sales of the same to grow.

Along with that we are also focusing on new technologies such as AI and data analytics to help us improve testing. We are currently working with Microsoft on artificial intelligence to develop algorithms for two fields namely histopathology and cytogenetics. This would assist pathologists to reduce subjectivity in their results and increase the speed of response.

On the market side, we are constantly trying to increase our accessibility. The hub and spoke model has been the easiest way to do so. Most of the collection centers are franchised making it easier and it becomes an asset light expansion.

So for us, it’s a mixed approach including product strategy and a market accessibility which would hopefully help us grow in the future.

For any queries or feedback, reach out at namit@kenresearch.com

For More Information, Click on the Link Below:-

India Diagnostic Laboratories Market

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Contact Us:-

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Ankur Gupta, Head Marketing & Communications

ankur@kenresearch.com

+91-9015378249

Diagnostic Laboratory Markets in India-A Healthcare Revolution in the Making: Ken Research

With COVID-19 causing a drastic change in industries, the health industry is also expected to see a considerable change. “Precaution is better than cure” is quite suitable for the Indian consumers as there has been a drastic shift towards preventive testing wherein individuals are now getting tested for diseases as soon as the slightest of the symptoms occur, helping the diagnostic laboratory market to grow further during this period.

In conversation with Dr. Kunal Sharma, Pathology Section Head- SRL Reference laboratory and Consultant Oncopathologist- Fortis Hospitals, Bangalore, we attempted to seek his opinion and understand his side of story to ‘India Diagnostic Laboratory Market’. Here are some excerpts of the interview:

1. As you have been a part of this industry for a number of years, how do you think the trend has changed over time? Were there any major shifts witnessed in the market?

I have been heading the section of Pathology for SRL in Bangalore and also work as a consultant for Fortis Hospitals in the city. In addition, I am a part of the Covid Consultative Group (CCG), a govt. recognized task force composed of policy makers, doctors, lawyers, and other industry experts which reports to the Health Minister, CM and Central representative for the state of Karnataka, to deal with the management of COVID-19 in the state. I mainly specialize in Oncopathology and lead the centre of reference for Uropathology and Flowcytometry in Bangalore. As far as the diagnostic market is concerned, with regards to the recent trends, there has been emergence of a number of startups dealing in specialized testing, targeting only specific specialties and modalities. Besides the biggest national players such as SRL, Dr. Lal Path labs, Metropolis and Thyrocare, there are players like Medgenome, Oncquest laboratories and Core which are mainly into molecular diagnostics and oncology. The big three as I call them, namely SRL, Dr. Lal Path labs and Metropolis Healthcare Limited also have well defined segments of high end testing in their test menu.  In oncology, we are moving into the era of targeted treatment. Earlier the anti - cancer drugs would target all the rapidly growing cells in the body, causing side effects such as hair loss, nausea etc.  We are now focusing on targeted drugs which would target cells which harbour a specific mutation which is detected through molecular tests. This results in more specific treatment with lesser side effects. Tests such as FISH and NGS are being used to diagnose, prognosticate and determine treatment options for diseases.

2. Despite being the healthcare sector wherein regulations should be a must in order to have accurate reports, this industry does not have standardized regulations. What has been the effect of the same?

The regulatory body for healthcare in India is NABL. Despite their constant efforts, the industry is still predominantly unregulated. There is lack of standardization throughout the rural and semi- urban areas. Even in molecular testing modalities like NGS, inter lab variations are a plenty. The testing protocols, kits and technical SOP followed by Lab A may not be the same as followed by Lab B resulting in discrepancies in the reports issued. For the general public, they would prefer a report from a well-established Lab like SRL as these labs put in a lot of research into their testing and have the highest accreditations like CAP and NABL ensuring most stringent quality practices. Also, the stakes for bigger labs are much higher and they cannot afford to have wrong results. Startups are mainly focusing on putting something in the market, before anybody else does, so they can create a niche for themselves and play a disruptive role in terms of pricing. But industry leaders have a bigger responsibility.

3. About 70% of the revenue for the industry comes from unorganized players. What are your views on the same?

The market definitely has many unorganized players who are mainly focusing on increasing their valuation so as to sustain in the market. In order to gain momentum, they strive to lower their costs. Introduction of new tests at a cheaper rate is a common strategy used. The unorganized players are mostly concentrated in the tier 2 and tier 3 cities. However, there is still high dependence on the players which have a PAN India presence with a broad base of collection centers and franchisee labs.

Another change is in reporting regulations. In 2018, the Medical Council of India came up with a rule and the Supreme Court made it a mandate that all the lab reports including those under the scope of genetics will have to be signed by a MD doctor. I feel more than a technical stand point, this actually helps to regularize the reporting and prevent unregulated practices.

4. If we divide the industry into radiology and pathology, which do you think dominates the market?

In terms of their contribution towards the overall market, 58% of the revenue would be from pathology and 42% from radiology. The pathology business is the first step towards testing and is highly scalable as blood samples can be easily shipped to a remote, centralized location attaining economies of scale. However, what we also need to keep in mind is that despite being a relatively more cut-based practice, something that still exists; the margins involved in radiology are higher. Having said that, both go hand in hand and one would not be able to survive without the other.

5. The laboratory industry can be classified into hospital based labs, independent/stand-alone labs and polyclinics. With respect to India, what do you think is most common?

Standalone labs are the preferred choice because they would have a share of 47% followed by hospital based labs with 37% and diagnostic chains with 16%. Diagnostic chains have grown rapidly as they have a higher bargaining power allowing them to keep their input costs lower than standalone centers. They cater to walk-ins and also regular health checkups. Wellness and preventive health is becoming a major focus with urbanization. For a hospital based lab, they mostly cater to illness. Along with this, a majority of the hospital CAPEX would go into the clinical side.

6. With the entire pandemic going on, how do you think COVID-19 is going to impact the industry?

With COVID, the scenario will surely change. From an industry perspective, what we need to understand is that a number of industries such as tourism and airlines have gone into recession. But for healthcare, it is here to stay. The way people treat life would change. Initially, the symptoms which were ignored would now be given more attention to. More preventive measures would be taken, which would help the diagnostic lab industry to grow. We are actively looking for a vaccine for the same. There are a number of institutes such as the Serum institute which is currently doing their research for a vaccine. Once a proper cure is available, we might be getting back to a normal life. I feel that by December or latest May next year we should have an answer to it.

7. How has the growth for the diagnostic industry been in the Tier 1, Tier 2 and Tier 3 cities of the country?

Tier 1 and tier 2 cities would be in the lead. The urban population, which is ~28% of the country’s population, contributes up to 65% to the overall revenue of the diagnostics industry. Reference labs are mostly concentrated in the tier 1 cities where as tier 2 and 3 have collection labs or labs conducting routine testing. For high end testing, the samples are couriered to their reference labs. However, with the introduction of digital pathology, the model has been changing. For instance, the reference labs are facing heavy loads of sample and despite the large number of workforce; the sample size at times can be overwhelming. As a result strategies are developed through digital pathology platforms to get the pathologists in other labs to report these cases. Slides can be scanned and images can be sent to other labs where the reporting can be performed.

8. With the whole lockdown, the government of India has tried to regulate the telemedicine market. How would that have an impact on the diagnostic industry of India?

Like in India we have NABL, the US has College of American Pathologist (CAP) and they are also accrediting a number of labs in India. If we take the example of CAP, it mobilizes its members to directly lobby the Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services to give pathologists the workforce flexibility they require to manage the COVID-19 pandemic.

With the lockdown, what the CAP has done is that it has given signatory authorities for digital pathology platforms. Regulatory authorities are trying to bring in laws for the same. The digital pathology market is only here to grow. We are looking at a billion dollar industry. Philips, Leica, Roche and other companies have already come up with such technologies.

9. As of date, only about 15-20% of the Indian population has health insurance. How would insurance affect the diagnostic industry?

There are mainly two things that we need to look at. Firstly, approximately 75% of the expenditure on health is done privately in India. Majority of the population doesn’t have health insurance and even for the people who have it, it is mostly in the clinical sector and not for diagnostic. But what we also need to understand is that with high end tests entering the market like molecular and genetic testing some of which cost in thousands and lakhs, the cost is equivalent to the treatment of a less complicated disease. The other problem that lies is that for diseases like cancer, you cannot start the treatment until there has been an exact diagnosis of the same. These diseases have extremely specific protocols which can only be instituted once the individual has the complete diagnosis. And it is for the same reason; health insurance needs to have a broader prevalence in this segment. As of now, majority of the payment is through out of pocket expenditure.

10. How do you think the diagnostics industry of the country would change in the next five years?

Because of COVID, one thing is for sure, that a lot of small players would not be able to sustain in the market. We would be looking at a number of mergers and acquisitions. Along with this, diagnostics will play a major role in the lives of the people. Now is the time when the experts need to come together and have indigenous production of testing kits. Some of the top institutional investors are backing the diagnostics sector of the country and helping in investments. India is still behind in testing; however we have been able to do a decent job because our active surveillance system is extremely good. The primary health workers are focusing on contact tracing which has helped to keep the situation under control.

11. As SRL is one of the major players in the market, what would be their USP in the diagnostic sector? What are the future plans for the company?

We at SRL focus a lot on principals such as patient care and doctor feedback. With the help of this, we actively take feedback on what kind of testing is in need in the market. Along with this, we on-board people who are best in the business and probably have the most detailed and robust research and development wing. This helps us to validate routine and high end tests with absolute focus on quality of testing and reporting. As industry leaders, we make sure; we keep improving and delivering the best in diagnostics. I will not be able to share any company specific information though, but all I can say is, you can expect the best from us, always!

Verbatim:

“For me and many experts, the era of diagnostics in India has just begun. With exponential rise in cancer and infectious diseases like COVID-19, people will understand the need for accurate, proper and timely diagnosis.”

For any queries or feedback, reach out at namit@kenresearch.com

For More Information, Click on the Link Below:-

India Diagnostic Laboratories Market

Related Report:

Diagnostic Laboratory Market in India – From Preventive Testing to a Wellness Approach

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