1. Healthcare IndustryBy Group 2; Section B Neha Sikarwar; Roll No. 12 Souvik Roy; Roll No. - 14 Boby Sebastian; Roll No. - 16 Rahul Bedi; Roll No. - 18 Vipul Bajaj; Roll No. - 20

2. Objective To study the various aspects of the Health careindustry in India with respect to the Marketingsegmentation, issues at hand and opportunities ofgrowth. 3. Flow of Presentation Brief Overview of Indian Medical TourismHealthCare Sector Ayurveda Emerging and Re- Surgical Equipmentsemerging diseases Pharmaceuticals in India Indian healthcare Research andinfrastructureDevelopment Telemedicine Labour Force Health Insurance Market Survey Analysis(India) Recommendations Nutraceuticals Market 4. Brief Overview The Healthcare Sector comprises of Hospitals Diagnostics Pathology Equipment and Supplies Medical Tourism Telemedicine, etc It is one the prominent contributors to Indias GDP. It attracts large number of domestic as well as internationalplayers India has become an attractive destination for Medical Tourism Clinical Studies Research and Development Programs There is massive growth potential and scope for expansioncopyright (your organization) 2003 5/5/2012 5. HealthCare : Market Size The HealthCare Industry is presently worth $50bn. Second largest service sector employer in thecountry. Provides jobs for 4.5mn people directly or indirectly. Ratings agency Sitch estimates doubling of size ofthe sector to $100bn by 2015. 6. Indian HealthCare : The Growth Story A sudden in paradigm shift in the last five years. This shift has become visible only in the last twoyears. A shift from an unorganized to an organizedstructure. It was earlier seen only as a social sector but nowthere is a move towards corporatization. Apollo pioneered the trend of corporate hospitals inIndia. 7. Factors for the HealthCare boom in India7 Strong Indian Economy Increasing options for Healthcare Financing Increasing Opportunities in Healthcare delivery Better Profitability (15-20% EBIDTA) Earlier Break Even (2-3 years) Medical Tourism Increasing demand from within the county 8. Increasing Demand from Within the Country8 9. Top Health Care Companies and Hospital Chains9 APOLLO LIFE SUN HEALTHCARE NICHOLAS PIRAMAL INDIA PVT. LTD WIPRO GE HEALTHCARE SERUM INSTITUTE OF INDIA LTD CIPLA CADILLA HEALTHCARE RANBAXY FORTIS HEALTHCARE 10. Emerging & Re-Emerging Diseases Pneumonia - The deadliest Acute respiratory infections (ARIs) are responsible for most deaths in the developing nations. HIV/AIDS - Over 33 million people are living with HIV/AIDS worldwide. There is still no cure on the horizon. Worst affected is sub-Saharan Africa 11. Emerging & Re-Emerging Diseases(contd) Diarrhea - It imposes a heavy burden on developingcountries - accounting for 1.5 billion bouts of illnessa year in children under five. The burden is highestin deprived areas where there is poor sanitation,inadequate hygiene and unsafe drinking water. Tuberculosis (TB) - a disease once thought to beunder control, has bounced back with a vengeanceto kill 1.5 million people a year - even more when incombination with HIV/AIDS. Nearly two billionpeople - one-third of the worlds population - havelatent TB infection 12. Emerging & Re-Emerging Diseases(contd) Influenza - It is a greatly misunderstood disease. Each year we confront seasonal, or interpandemic influenza. Seasonal influenza kills about 250,000 to 300,000 people each year throughout the world Measles - It is the most contagious disease known to man. It is a major childhood killer in developing countries - accounting for about 900 000 deaths a year 13. In an era of increasing globalization, emerginginfectious diseases are everybodys problem SARS - Nearly three years ago, the world experienced anothernewly emerging microbea previously unknown corona virusthatcaused severe acute respiratory syndrome (SARS). Fortunately, themorbidity and mortality associated with the SARS outbreak were notas great as what we observe every year with influenza. The SARSoutbreak turned out to be a classic study in epidemiology withregard to tracking the point source, the spread, and thecontainment. SARS first appeared in Guangdong Province in China. Itwas not reported to authorities until it emerged in Hong Kong, whenan index case, which traveled from Guangdong to Hong Kong, stayedat the Metropole hotel and infected at least 14 people. Thoseindividuals did some traveling throughout the world. Within monthswe had an epidemic that temporarily transfixed the world and didextraordinary economic damage in Canada, China, and Hong Kong,and other countries. There were 8,098 reported cases and 774deaths. 14. Indian Healthcare Infrastructure As on December 2010, there were 335 medicalcolleges which were recognized by the IndianMedical Council. As on 2001, a total of 5, 39, 00 MBBS doctors wereregistered with the Medical council number ofPhysicians and specialists available is less than theestimated requirements. The current doctor population ratio is 1:1800. Though at present approximately 50000 doctors arebeing produced annually in the nation, but thenumber needs to go up. 15. Indian Healthcare Infrastructure(contd) By 2020, the Indian healthcare industry is estimated to be worth US$ 275.6 billion. Currently, 8 per cent of Indias GDP is spent on healthcare. India needs to spend at least US$ 80 billion more in the next five years to meet targets, according to Mr Pradipta K Mohapatra, Chairman, Executive & Business Coaching Foundation India Ltd and Past Chairman, Confederation of Indian Industry (CII), Southern Region. 16. Survey Analysis on Infrastructure 51% of the surveyed population believes that there isconsiderable difference between performances ofhospitals in their region. 39% of the population believes that quality of govt.hospitals is bad and 35% of population believes thatthe quality is just an average. 18% believes that thequality of the govt. hospitals is very bad. Only 8%believes that quality of govt. hospitals are good. 17. Survey Analysis on Infrastructure(contd) 57% of the population believes that quality of private hospitals is good and 22% of population believes that the quality is just an average. 21% believes that the quality of the private hospitals is very good. 83% of the population is of the opinion that cost of private hospital is quite expensive. 18. Measures Taken to Improve Medical practitioners to undergo knowledge and skill upgradation and recertification every five years areproposed in the Tenth Plan. Promoting Open Universities for providing continuous upgradation of medical knowledge Setting up of Medical Grants Commission for funding newGovernment Medical and Dental colleges Developing decentralized district based health manpowerplanning that would meet the demands of healthservices, and encouraging all States to establishUniversity of Health Sciences (UHS) 19. Telemedicine Telemedicine is the ability to provide interactive healthcare Real-Time utilizing modern technology and Store and Forward telecommunications.(asynchronous): Various telemedicine Home Health usage modelsTelemedicine 20. Recommendations More medical colleges Attract more FDI investment Student exchange programmes More special medical schemes Branding Healthcare Industry Preserve and promote Ayurvedic Medical System Telemarketing and social marketing Seminars and workshop (build awareness; stop corruption) 21. The Health InsuranceMarket of India 22. Need of Health Insurance Government Hospitals: Inadequate facilities Expensive Medicines: Diagnostic charges are beyondcommon mans reach. High cost of Specialists. Tax benefit under section 80 D of the Income Tax Act 23. Standard Health Insurance: Features Room and boarding expenses provided by the hospital Nursing expenses Diagnostic and medicine expenses Other Services: Surgeon, Anesthetist, MedicalPractitioner, Consultants, Specialistfees, Anesthesia, blood, oxygen, operation theatreexpenses, cost of surgical appliances, medicines anddrugs and similar expenses. Pre-hospitalization and post hospitalization expensessubject to conditions and limits. 24. Companies Category Non-Life Insurance: Public: Companies like Oriental, National Insurance, United India, etc. Private: Companies like ICICI Lombard, Reliance, Bajaj Allianz, etc. Specialized Health Insurance Companies:Offers Core Health Insurance services & Products only.Examples: Star Health & Allied Insurance, Apollo DKV Insurance Life Insurance Companies:Addresses following needs: Saving Pension Retirement InvestmentPlayers are LIC and other private players 25. Market Segmentation Working Class Individuals Working Professionals with Family. Students Senior Citizens Small and Medium Enterprises/ Corporate Houses: 26. Product Ranges Individual Health Insurance Products (Single Person). Family Health Insurance Senior citizen Health Insurance Individual Personal Accident Overseas Travel Health Insurance Group Health Insurance Policy for corporate / Organization 27. Industry Statistics 28. Inferences Dominance: The four state-owned general insurers,account for almost 60 per cent of the premiums writtenin the first nine months of this fiscal. National Insurance Company: sharp rise in premium of54% during the period. Private players: ICICI Lombard: at top position third spot in the industry with a growth of over 70 per cent and a market share of 13.2 per cent, Star Health & Allied Insurance (Star Health) with a share of 11.5 percent. 29. NUTRACEUTICALS MARKET Dietary supplements To fill nutritional deficiencies in food To prevent diseases 30. Segmentation Functional foods Functional beverages Mineral supplements 31. Challenges Lack of awareness Lack of Trust among People Lack of regulations Expensive Products 32. Major Companies Amway India-NUTRILITE Herb lifeDistribution channel: Multi-level Marketing 33. MEDICAL TOURISM 34. MEDICAL TOURISM INTRODUCTION 20% growth rate History International healthcare accreditation organizations MEDICAL TOURISM IN INDIA 30% growth rate 9500 crores by 2015 Health capital of India 35. ADVANTAGES OF INDIA Quality and experience of doctors and surgeons Most doctors and nurses are fluent in English Latest medical equipments Quality of nurses Low cost 36. COMPETITION Thailand, Singapore, Malaysia and Philippines arethe major competitors Thailand is more popular for cosmetic surgery. In complex procedures Singapore has a technologyadvantage. Cost in Thailand is also less than Singapore The Malaysian government is aggressively promotingmedical tourism. 37. SOURCE MARKETSOURCE: http://www.tourism.gov.in 38. SOURCE OF FINANCIAL SUPPORTSOURCE: http://www.tourism.gov.in 39. AYURVEDA INTRODUCTION Increasing popularity in Western Countries Availability of good infrastructure HERBAL TOURISM IN KERALA Kerala is becoming one of the major destination ofherbal tourism Kerala has an excellent network of hospitals International standard of facilities 40. SURGICAL EQUIPMENTS World market growing at a rate of 6% from 2010 Market is highly price sensitive. Good network of distribution channels Powered Instruments :- 47% of the total market Non-Powered Surgical Instruments:- blades,scissors etc Wound Closure Devices:- staplers, wound closurestrips etc 41. Pharmaceuticals in IndiaThe Indian pharmaceutical industry is the worlds second-largest byvolume.Indias bio-tech industry clocked a 17 percent growth with revenuesof Rs.137 billion ($3 billion) in the 2009-10 financial year .Bio-Pharmaceutical was the biggest contributor generating 60percent of the industrys growth at Rs. 8,829/- crore, followed by bio-services at Rs.2,639/- crore and bio-agri at Rs.1,936 crore. 42. Pharmaceuticals in India (contd) 42 The first pharmaceutical company was BengalChemicals and Pharmaceutical Works, which still existstoday as one of 5 government-owned drugmanufacturers, formed in Calcutta in 1903. For the next 60 years, most of the drugs in India wereimported by multinationals either in fully formulated orbulk form.copyright (your organization) 20035/5/2012 43. Governments RoleEncouraged growth of drug manufacturing in the early 1960s, and withthe Patents Act in 1970, enabled the industry to become what it is today.The patent act removed composition patents from food & drugs, and though itkept process patents, these were shortened to 5 to 7 years.Lack of patent protection made the Indian market undesirable for multinationalcompanies & while they went out, Indian companies took their place.They carved a niche in both the Indian & world markets with their expertise inreverse-engineering new processes for manufacturing at low costs.Very few companies have taken steps towards drug innovation, the industry hasbeen following the older model. 44. Overview Purely Indian pharmaceutical companies is fairly low. Mainly operated, controlled by dominant foreign companies havingsubsidiaries in India. In 2002, over 20,000 registered drug manufacturers in India sold $9billion worth of formulations & bulk drugs. 85% of these were sold in India, while over 60% were exported, mostly to the U.S. & Russia. Players in the market are mostly SMEs; 250 of the largest companies control 70% of the market. Thanks to the 1970 Patent Act;multinationals represent only 35% of the market, down from 70% thirtyyears ago. 45. Overview (contd..) Pharmaceutical companies operating in India, even the multinationals,employ Indians at all levels. Mirroring the social structure, firms are very hierarchical. Home grown pharmaceuticals, are often a mix of public & private enterprise. Leadership passes from father to son & the founding family holds a majorityshare. Globally, India currently holds a modest 1-2% share, growing at around10% per year. There are 74 U.S. FDA-approved manufacturing facilities in India. More than in any other country outside the U.S.A. In 2005, almost 20% of all Abbreviated New Drug Applications (ANDA) to theFDA were filed by Indian companies. 46. Top 10 Pharmaceutical Companies in India, as of 2010. Rank CompanyRevenue 2010 (Rs crore) Revenue 2010 (Rs billion)1 Cipla4,198.9641.989Ranbaxy24,162.2541.622(taken over by Daiichi Sankyo in 2008)3 Dr. Reddys Laboratories 3,763.7237.6374Sun Pharmaceutical2,463.5924.6355 Lupin Ltd2,215.5222.1556Aurobindo Pharmaceutical2,081.1920.8017 GlaxoSmithKline1,773.4117.7348 Cadila Healthcare1,61316.139Aventis Pharmaceutical 983.809.838 10 Ipca Laboratories 980.44 9.8044 47. Patents The industry is being forced to adapt its business model to recentchanges in the operating environment. The 1st & most significant change was the January 1, 2005 enactmentof an amendment to Indias patent law that reinstated productpatents for the first time since 1972. The WTOs Trade-Related Aspects of Intellectual Property Rights (TRIPS)agreement, which mandated patent protection on both products & processesfor a period of 20 years. India was forced to recognize not only new patents but also patents filed afterJanuary 1, 1995. The new patent legislation has resulted in fairly clear segmentation. The multinationals narrowed their focus onto high-end patients who make uponly 12% of the market, taking advantage of their newly bestowed patentprotection. Meanwhile, Indian firms have chosen to take their existing product portfolios &target semi-urban & rural populations. 48. Product development Indian companies are adapting to the new environment. Firms have made their ways into the global market, By researching generic competitors to patented drugs Following up with litigation to challenge the patent. Those who can afford it, have set their sights on an evenhigher goal: new molecule discovery. Initial investment is huge, but companies are promised hefty profitmargins & recognition globally. Local firms have been investing money into their R&Dprograms or have formed alliances. 49. Small & Medium enterprises The outlook for small and medium enterprises (SME) is not as bright. The excisetax of 16% on the MRP of their products. Was a major issue. Larger companies were cutting back on outsourcing & business is shifting tocompanies with facilities in tax-free states of - Himachal Pradesh, Jammu &Kashmir, Uttaranchal & Jharkhand. But in a matter of a couple of years the excise duty was revised on two occasions,first it was reduced to 8% & then to 4%. As a result, the benefits of shifting to a taxfree zone were negated. This resulted in, factories in the tax free zones, to start up third party manufacturing. Under this these factories produced goods under the brand names of other parties on job work basis. As SMEs wrestled with the tax structure, they were also scrambling to meet thedeadline for compliance with the revised Schedule M Good ManufacturingPractices (GMP). While this should be beneficial to consumers & the industry at large, SMEs havebeen finding it difficult to find the funds to upgrade their manufacturing plants,resulting in the closure of many facilities. 50. Challenges All of these changes are ultimately good for the Indian pharmaceutical industry,which suffered in the past from inadequate regulation and large quantities ofspurious drugs. They force the industry to reach global competitiveness, however they have alsoexpose some of the inadequacies in the industry. Its main weakness is an underdeveloped new molecule discovery program. Market leaders such as Ranbaxy spend only 5-10% of their revenues onR&D. This disparity comes when advances in genomics have made researchequipment more expensive than ever. The drug discovery process is further hindered by a dearth of qualified molecularbiologists. Due to disconnect between curriculum & the industry, pharmaceuticalcompanies in India also lack the academic collaboration. 51. Research & Development The Indian government has recognized R&D as an important driver in thegrowth of their pharmaceutical businesses & conferred tax deductions forexpenses related to research & development. They have granted other concessions as well, such as reduced interest ratesfor export financing and a cut in the number of drugs under price control. Government support is not the only thing in Indian pharmaceuticals favour. companies also have access to a highly developed IT industry that can partnerwith them in new molecule discovery, related R&D. 52. Labour Force Indias greatest strengths lie in its people. India also boasts of well-educated, English-speaking labour force that isthe base of its competitive advantage. Although molecular biologists are in short supply, there are a number oftalented chemists who are equally as important in the discovery process. In addition, there has been a reverse brain drain effect in whichscientists are returning from abroad to accept positions at lower salariesat Indian companies. Once there, these foreign-trained scientists can transfer the benefits of theirknowledge and experience to all of those who work with them. Indias wealth of people extends benefits to another part of the drugcommercialization process as well. With one of the largest and most genetically diverse populations in any single country, India can recruit for clinical trials more quickly and perform them more cheaply thancountries in the West. Indian firms have just recently started to leverage. 53. Survey Analysis & Recommendations 54. Thank You54