Indian Healthcare & Medical Devices IndustryChallenges & Opportunities

Current Status

Growth Drivers

Growing middle class

Rising income

Growing and aging population

Growing urbanization

Growing medical tourism

Healthcare Insurance Penetration

Source: FICCI, Ernst & Young Study

90% patient needs primary and secondary care

Healthcare Demand Vs Supply

Urban

Semi-Urban

Maximum concentration of corporate healthcare

Highly fragmented and unorganized sector, focus mainly on secondary care

HEALTHCARE SERVICES SUPPLY IN INDIA

TertiaryCare

SecondaryCare

PrimaryCare

Conditions requiring care from specialized clinics and facilities

Segment that require constant medical attention, including short period of hospitalization

The basic healthcare facilities for common & minor ailments, and where prevention is most effective

HEALTHCARE SERVICES DEMAND IN INDIA

Rural Even Primary & Secondary care is at times elusive

Healthcare Demand Vs Supply

SecondaryCare

PrimaryCare

Segment that require constant medical attention, including short period of hospitalization

The basic healthcare facilities for common & minor ailments, and where prevention is most effective

HEALTHCARE SERVICES DEMAND IN INDIA HEALTHCARE SERVICES SUPPLY IN INDIA

HospitalsNursing homes

Private practitioners

District & Taluk Hospitals

Community Health Clinics

Primary health clinics

Government Funded Focus

Opportunities in the bottom of the pyramid

TertiaryCare

Conditions requiring care from specialized clinics and facilities

Opportunities: Infrastructure

Bed Physicians Nurses

7.4 1.8 7.5High Income Countries

4.3 1.8 1.9Middle Income Countries

1.5 1.5 1.6Low Income Countries

1.5 1.2 0.5India

World Average 3.3 1.5 3.3

Per ‘000 population

India Healthcare Infrastructure: Key Statistics *

* Healthcare in India : The road ahead - CII & McKinsey, Data as of 2001** Opportunities in Healthcare “Destination India” –E&Y and FICCI, Data as of Jan 2007

To reach the target number of beds to population ration 1.55: 1000/ 2:1000

To meet 2012 demand requires investment of US$ 77.9- 88.8 billion**

Bed Physicians Nurses

7.4 1.8 7.5High Income Countries

4.3 1.8 1.9Middle Income Countries

1.5 1.5 1.6Low Income Countries

1.5 1.2 0.5India

World Average 3.3 1.5 3.3

Per ‘000 population

India Healthcare Infrastructure: Key Statistics *

* Healthcare in India : The road ahead - CII & McKinsey, Data as of 2001** Opportunities in Healthcare “Destination India” –E&Y and FICCI, Data as of Jan 2007

To reach the target number of beds to population ration 1.55: 1000/ 2:1000

To meet 2012 demand requires investment of US$ 77.9- 88.8 billion**

India target’s to reach a bed to thousand-population ratio of 1.85 to 2 by 2012

Beds in excess of 1 million needed to reach the ratio of 1.85*

To meet 1012 demand requires investment of US$ 77.9-88.8 billion**

Need for private sector investment amounts to US$ 69.7 billion

Opportunities: Telemedicine

80% of the medical facilities are concentrated in the urban area while 73% of the population resides in the rural area

Public Private Partnership

Radiologist

Pathologist

Cardiologist

Second Opinion

Ophthalmologist

Oncologist

Generalist

From patient treated by lower educated doctor

To patient connected to a multi specialty network

Health for the poor consists merely of general physician

Healthcare available and affordable for all

Opportunities: Medical Value Travel

4,50055,000Hip Replacement

4,50048,000Knee Surgery

40,0003,00,000Bon Marrow Transplant

30,0002,50,000Liver Transplant

4,400100,000Heart Surgery

IndiaUS

Cost (US$)Procedure

4,50055,000Hip Replacement

4,50048,000Knee Surgery

40,0003,00,000Bon Marrow Transplant

30,0002,50,000Liver Transplant

4,400100,000Heart Surgery

IndiaUS

Cost (US$)Procedure

India’s Cost Advantage

Indian medical tourism market could touch USD 1.5 billion by 2012

Over 272,000 tourists traveled for medical treatment in 2007 contributing USD 656 millionin 2007

Patents are expected to save 60% - 95% of the total treatment costs in India

Government has created special visas for medical tourism

Opportunities: Health Insurance

Source: FICCI, Ernst & Young Study

Health insurance projected to grow to US$ 3.8 billion in 2012

Merely 10% of Indian population has got health insurance cover so far

Medical Devices: Overview

Source: FICCI, Ernst & Young Study

The medical devices and equipment market growing at 15percent per year

Almost 65 per cent of the medical devices is imported

US, Germany and Japan are meeting 85 % of the demand

Most of the multinationals in medical technology hasentered India to explore the booming market

Medical Devices & Equipment Import: Category wise

Medical Devices: Demand Scenario

Medical Devices: Opportunities

A traditionally price sensitive market, shifting towards a health conscious,technology demanding population

Tertiary care mostly driven by the private healthcare players who arealways ready to invest on the best and expensive equipments for theirpatients

Indian Government’s National health policy also aims to increase and upgrade health care facilities

Government acknowledges need for foreign/ private involvement in medical technology

The duties on medical equipments have been reduced over a period of time

Most critical medical devices do not require duties