Industry monitor indian healthcare sector november 2014

Disclaimer: All information contained in this report has been obtained from sources believed to be accurate by Gyan Research and Analytics (Gyan). While

reasonable care has been taken in its preparation, Gyan makes no representation or warranty, express or implied, as to the accuracy, timeliness or

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Industry Monitor – Indian

Healthcare Sector

November 2014

Industry Monitor - Indian Healthcare Sector November 2014

2 | P a g e © Gyan Research and Analytics Pvt. Ltd., 2014

Table of Contents

1. In Focus – Ebola Virus in India ........................................................................................................ 3

2. Industry Statistics .......................................................................................................................... 5

3. Product Scan – Private Hospitals .................................................................................................... 7

3.1. Key Players – Private Hospitals ................................................................................................ 8

4. Company News Brief – Healthcare and Pharmaceutical Sector..................................................... 10

4.1. Pharmaceutical Companies: .................................................................................................. 10

4.2. Hospitals and Service Providers: ............................................................................................ 11

5. Industry News Brief ..................................................................................................................... 13

6. Mergers & Acquisitions ................................................................................................................ 15

7. Company Scan: Apollo Hospitals Enterprise Limited ..................................................................... 16

8. Upcoming Events ......................................................................................................................... 19



1. In Focus – Ebola Virus in

Ebola Virus Disease (EVD) is the latest epidemic ravaging mankind. Earlier known as Ebola

haemorrhagic fever, it is a fatal illness with no vaccine and no detailed treatment. The virus is

initially transmitted by wild animals,

thereafter it spreads in the human

population through human to human

transmission. The recent Ebola

outbreak in West Africa is the most

major and complex outburst and has

been responsible for more deaths

than all other epidemics combined.

Guinea, Sierra Leone and Liberia are

the most severely affected countries.

The World Health Organization has

declared Ebola as public health

emergency of international concern.

Scientists have alerted that the virus

could spread across the world from

West Africa within three weeks.

Ebola virus has so far infected 20,000 people by October 2014 and 70 percent of the patients have

died. Most of the infected are in the age group of 15 to 44. Care givers and health workers are also

at high risk. More than 300 healthcare workers have been infected and 50 percent of them did not

survive.Though there has been no case of an Indian suffering from the disease so far, around 44,700

Indians live in Ebola affected countries. Indian airports need to be on high alert and screen

passengers coming in from the affected regions. Further, there is an urgent need for diagnostic

centers and testing facilities. Treatment centers and isolation wards must also be available in case

someone tests positive.

Ebola symptoms are easily noticeable in an infected person. Therefore, even though currently there

is no known cure, the spread of the disease can be checked by efficient measures. The Ministry of

Prevalence and Death-Ebola 2014 Outbreak

Country Prevalence Deaths

Guinea 1760 1054

Liberia 6619 2766

Mali 1 1

Nigeria 20 8

Senegal 1 0

Sierra Leone 4862 1130

Spain 1 0

United States 4 1

Source: World Health Organization



Health has started conducting mock drill treatments for potentially infected patients. State

authorities have designated hospitals, which will be checked by inspectors from central government.

Nearly 50,000 kits containing “personal protective equipment” have been distributed to healthcare

workers to protect them from getting and spreading the disease.

Successfully containing the Ebola virus from spreading will depend largely on the region where it

emerges. For instance, if it surfaces in Kerala, where the public health infrastructure is more

advanced, suppression would be easier than in states like Bihar where medical facilities are poor.

Only two public centers – The National Institute of Virology in Pune and The National Center for

Disease Control in Delhi - are currently equipped to diagnose the disease. The Health Ministry has

confirmed that of the 96 blood samples tested for Ebola so far, none has been found positive.



2. Industry Statistics

Number of Food and Drug Administration (FDA) approvals from India (2008 – 2014)

Year Number of Approvals

2008 264

2009 208

2010 221

2011 89

2012 103

2013 68

2014 (till July) 32

Source: MedIndia, Asian Journal of Pharmaceutical and Clinical Research



Indian Pharmaceutical Sector – Market size (USD Billion)

2009 2010 2011 2012 2013E

11.2 13.8 15.6 17.4 20.18

Export Revenue (USD Million)

Aug 2013 Apr—Aug 2013 Aug 2014 Apr-Aug 2014 % Change Apr-Aug

2014

1,186.65 6,112.7 1,270.13 6,476.06 5.94

Import Revenue (USD Million)

Aug 2013 Apr—Aug 2013 Aug 2014 Apr-Aug 2014 % Change Apr-Aug

2014

421.55 2,284.4 489.74 2,316.32 1.39

FDI in Pharmaceutical Sector (USD Million)

FY2011 FY2012 FY2013 FY2014 FY2015 (April-July)

209 3,232 1,123 1,279 886

Source: IBEF, Directorate General of Commercial Intelligence and Statistics, Department of Industrial Policy and

Promotion



3. Product Scan – Private Hospitals

The private sector accounts for 80

percent of the India’s healthcare delivery

market. This is the highest share of

private healthcare anywhere in the

world. The segment is expected to grow

at the Compounded Annual Growth Rate

(CAGR) of 12 percent from 2013 to 2017,

to reach USD 125 billion by 2017 from

USD 78.6 billion in 2013. Private

hospitals include nursing homes, mid-

tier and top-tier private hospitals.

The growth of this segment has been

primarily driven by increase in the

number of Tier – ΙΙ and Tier- ΙΙΙ cities.

Rising income levels and exposure to

international standards of quality have

contributed to the rise in demand for

quality private healthcare. The growing

popularity of medical tourism has also

boosted demand for private hospitals.

Private hospitals are able to charge a

premium of around 20 to 25 percent

more for medical tourists, than what it

does for local patients.

Considerable private equity investments

in private hospitals chains, not only in

78.6188.27

99.13

111.31

125

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

2013 2014F 2015F 2016F 2017F

USD

Bill

ion

Market Size of Private Hospitals in India

Source: Business Standard, Gyan Research and Analytics

12,000

8617

4400

3649

1912

1800

0 5,000 10,000 15,000

Fortis Healthcare

Apollo hospitals

Manipal Group of Hospitals

Arvind Eye Hospitals

Care Hospitals

Max Hospitals

Number of Beds

Number of Beds in Top-five Private Hospitals in India

Source: Company Websites & Gyan Research and Analytics



the urban areas but also in rural regions, are contributing appreciably to the growth of the private

hospital sector. Large corporations have also begun venturing into this lucrative business. This trend

is expected to continue into the foreseeable future as well.

3.1. Key Players – Private Hospitals

Fortis Healthcare Limited – Fortis Healthcare Limited is a leading, Pan Asia-Pacific healthcare

delivery provider with an asset base in five countries. The segments of the company include

diagnostics, primary care, day care specialty and hospitals. Currently, Fortis operates its healthcare

services in India, Singapore, Dubai, Mauritius and Sri Lanka through 65 healthcare facilities, over

10,000 beds and 240 diagnostics centers. In India, it has hospitals in Delhi, Amritsar, Kolkata, Navi

Mumbai, Hyderabad, Jaipur, Bengaluru, Chennai and Noida. Fortis Healthcare specializes in nuclear

medicine, oncology and general surgery and medicine.

Apollo Hospitals Enterprise Limited - Apollo Hospitals Enterprise Limited is an Indian hospital chain

founded in 1983 and based in Chennai. The company has hospitals in India, Sri Lanka, Bangladesh,

Ghana, Nigeria, Mauritius, Qatar, Oman and Kuwait. Apollo was among India’s first group of

hospitals to be awarded International Healthcare Accreditation by the US-based Joint Commission

International (JCI). The hospital chain specializes in robotic surgical systems, cosmetic surgery, bone

marrow transplant, infertility cure and hand microsurgery. Apollo also runs the SAHI (Society to Aid

the Hearing Impaired) and the CURE Foundation, which is focused on cancer screening and cure.

Max Healthcare Institute – Max Healthcare Institute is based in New Delhi. The institute is a wholly

owned subsidiary company of Max India Limited. The hospital operates 11 centers in Delhi, NCR and

the neighboring Punjab region. The company provides services such as nuclear medicine and cardiac

imaging, labs, scans, cardiac pacing, electrophysiology, maternity services, general surgeries, urology

and pulmonology.

Sterling Hospitals – Sterling Hospital is one of the largest hospital chains in Gujarat. It is owned and

managed by Sterling AddLife India Limited. Sterling’s multi specialty hospitals have a presence in six

major cities of Gujarat – Ahmedabad, Vadodara, Rajkot, Mundra, Bhavnagar and Gandhidham. It

also has three satellite centers in Kalol, Mehsana and Himmatnagar. The areas in which Sterling



provides medical care are, cardiology, neurology, hematology, oncology, reproductive medicine,

critical and emergency treatment. Surgery treatments include CVTs, neuro and onco surgeries,

nephrology and general surgeries.

Vasan Healthcare Group – The Vasan Healthcare Group is based in Trichy, Tamil Nadu. It has more

than 170 eye care hospitals and 30 dental care hospitals across India, including two multi-specialty

hospitals in Trichy. Vasan Eye care hospitals are day care centers for treating eye ailments.



4. Company News Brief – Healthcare and Pharmaceutical Sector

4.1. Pharmaceutical Companies:

FDA bans Ranbaxy from copying AstraZeneca and Roche drugs – The US Food and Drug

Administration (FDA) has tentatively banned Ranbaxy Laboratories Limited from cheap copy of

AstraZeneca Plc’s heartburn drug Nexium. FDA has also revoked approval from Ranbaxy to copy

Valcyte an AG’ antiviral of Rosche Holdings. Ranbaxy’s quality control issues have led to this

consequence.

Dr. Reddy gets FDA approval to launch Valcyte – FDA approves Dr. Reddy Laboratories to launch

generic version of Valcyte in the US market. The approval will fetch Dr. Reddy a sale of USD 30 to 40

million. The drug is prescribed to patients with Acquired Immuno Deficiency Syndrome (AIDS).

Cadila gets FDA warning – Cadila Pharmaceuticals Limited got a word of warning from FDA for not

following good manufacturing practices in its factory in Ankleshwar in Gujarat. The company violated

quality standards and did not achieve overall observance with Current Good Manufacturing Practices

(CGMP).

Aurobindo Pharma becomes the fifth most valuable pharma firm – Aurobindo Pharma’s stocks

surged 21 percent in October 2014, making it the fifth most valuable pharma company. Aurobindo

surpassed companies like Ranbaxy Laboratories, Cadila Healthcare, Divi’s Laboratories and Glaxo

Smith Kline Pharmaceuticals in market capitalization ranking.

FIPB rejects HBM’s deal to buy stake in Amanta Healthcare – Swiss investment firm HBM

Healthcare investments Ltd. proposed to buy stakes in Amanta Healthcare, a Gujarat based

healthcare company. The deal was rejected by the Foreign Investment Promotion Board (FIPB), the

nodal government body monitoring foreign investment in India. For HBM Healthcare this could have

been a debut deal in India.



US’s export ban on Wockhardt unlikely to be lifted until next year – The US’s ban on products from

two of Wockhardt’s plants are unlikely to be lifted until next year. Last year, the USFDA halted

exports from the drug maker to the United States, over issues of quality control. The ban is largely

responsible for the fall in the company’s net profit.

4.2. Hospitals and Service Providers:

CCI rejects complains against Apollo Hospitals – The accusation of unjust business practices against

Association of Healthcare Providers, Apollo Hospitals Enterprise and Yashodha Hospital by the

competition commission of India (CCI). An individual has charged that the Association of Healthcare

Providers has directed the private hospitals to withdraw the cashless medical facilities available to

Central Government Health Scheme beneficiaries.

Renovation Work starts at MY Hospital in Indore – Renovation work on the largest government

hospital of Central India, MY Hospital, in Indore, has started. The hospital authorities are

refurbishing the hospital, beginning with civil construction to making it rodent free. This was

revealed at a press conference held by the Divisional Commissioner. The new plan proposes to up-

grade private wards and install music systems in the hospital.

New scanners for military hospitals in Kolkata – The Command Hospital, Eastern Command,

acquired a new state-of -art GE Discovery 690 PET CT scanner, considered among best in the world.

The process to procure and setup the equipment was started two years ago. This is an important

development as the military hospital in Kolkata serves Army, Navy, Air Force as well as para-military

personnel serving in the Eastern and North-Eastern part of the country.

Sterling Hospital enters into a joint venture with IHHC – Gujarat-based Sterling Group of Hospitals

entered into a joint venture with Indian Home Healthcare (IHHC), to set up Asilia Home Healthcare.

The latter will cater to the home healthcare service segment that provides nursing and medical

services at home. The area of operation will include Gujarat, Madhya Pradesh and Rajasthan.

Apollo Hospitals to add 2,175 beds over next three years – Apollo Hospitals Enterprise targets

opening 12 new hospitals with an investment of USD 332.62 million. The company plans to add



2,175 beds in the next three years. Most of the hospitals will be super-speciality facilities, while one

of them will be multi-speciality and another a reach hospital.



5. Industry News Brief

India allocates USD 28 billion for Universal Health Plan – India plans to spend around USD 28 billion

on universal healthcare schemes, under which free drugs, diagnostic tests and insurance cover will

be provided to all its citizens. The scheme under the National Health Assurance Mission is to be

rolled out in a phased manner from April 2015. To start with, three to four districts in each state will

be selected to roll out the scheme.

Bombay High court approves Pfizer and Wyeth merger – The Bombay High court approved the

amalgamation of Wyeth Ltd. and the drug firm Pfizer. In November 2013, both Pfizer and Wyeth

announced the merger of their India operations under a single brand to boost their business. The

new entity will operate under the Pfizer brand.

Three Indian states proactive in personal healthcare – Maharashtra, Tamil Nadu and Karnataka

have emerged as the top three states in collecting health insurance premium. According to the

Associated Chamber of Commerce and Industry of India (ASSOCHAM), in FY2013, Maharashtra

collected health insurance premium worth USD 710.33 million, followed by Tamil Nadu and

Karnataka. The three states together accounted for over half the gross health premium collected in

India in FY2013.

India Post to launch new stamps to highlight medical tourism – India Posts will release stamps on

liver transplant in recognition of India’s achievement in global medical tourism. India is placed

among the top-three medical tourism destinations in Asia. The stamp will acknowledge the progress

and milestones achieved by the Indian medical fraternity.

Fidelity invests USD 9.75 million in Cygnus Medicare – Delhi-based Cygnus Medicare, which

operates a chain of specialty hospitals, has raised USD 9.75 million funding from Fidelity Growth

Partners, India, and Somerset Indus Capital Fund. Fidelity owns 28 percent stake in Cygnus. The

company plans to use the fund to expand into small towns. It aims to provide super specialty

healthcare to Tier-ΙΙ and Tier-ΙΙΙ cities in North India.



RSBY to be transferred to NHAM – The Labour Ministry’s Rashtriya Swasthya Bima Yojna (RSBY) is

set to be transferred to the Health Ministry as part of the National Health Assurance Mission

(NHAM). The NHAM plans cover all aspects of healthcare including primary, secondary and tertiary

healthcare. RSBY will be responsible for providing secondary healthcare benefits.



6. Mergers & Acquisitions

Company Investment

Cipla buys 60 percent stake in Sri Lankan firm USD 14 million

Sun Pharmaceutical Industries acquires stake in Ranbaxy

Laboratories

USD 3.2 billion

Apollo Hospitals to acquire Hetero Med pharmacy stores USD 2.3 million

Source: Business Standard, Economic Times



7. Company Scan: Apollo Hospitals Enterprise Limited

Company Details and Overview

Sector Hospitals and Medical Services

Turnover INR 36816.3 million

Chairman/MD/CEO/President Dr. Pratap C. Reddy

No. of Employees 35,883

Company Overview Apollo Hospitals Enterprise Limited is an Indian Hospital chain based in

Chennai. It was founded by Dr. Pratap C. Reddy in 1983. The company has

hospitals in India, Sri Lanka, Bangladesh, Ghana, Nigeria, Mauritius, Qatar,

Oman and Kuwait. Apollo was among India’s first group of hospitals to be

awarded International Healthcare Accreditation by the US-based Joint

Commission International (JCI). The hospital chain specializes in robotic

surgical systems, cosmetic surgery, bone marrow transplant, infertility

cure and hand microsurgery. Apollo also runs the SAHI (Society to Aid the

Hearing Impaired) and the CURE Foundation, which is focused on cancer

screening and cure.

Contact Details 19, Bishop Gardens, Raja Annamalaipuram

Chennai ( Madras) - 600028

Tamil Nadu, India

Phone – 28290956, 28293896

Fax – 28290956

E-mail : [email protected]

mailto:[email protected]



Business Areas

Growth Strategy and Business Model

The Apollo Hospitals has undertaken major reorganization of its top leadership, with the objective of

accelerating its growth and furthering its strategic goals. The strategic re-alignment will enable the

company to focus on growth opportunities in hospitals, pharmacies and clinics. The company aims to

deepen the focus in each of these verticals as well as drive synergies between them using

technology to foster wellness, innovation and productivity. In future, Apollo aims to focus on high-

end specialties and procedures.

Group Companies

Apollo Munich Health Insurance - joint venture with Munich Health

Apollo Health Street Limited - BPO and IT Services Company

Apollo Pharmacy - largest retail pharmacy chain in India

Apollo Health and Lifestyle Limited - lifestyle clinic service

Apollo Telemedicines Enterprises Limited - telemedicine service provider

Equipment World - medicine equipment advisory

Family Health Plan Limited - health insurance and third party administrator

Keimed - pharmaceutical procurement and supply chain management company

MedVarsity Online Limited - develops online medical content along with NIIT



Financial Standing – Standalone

Financials of Apollo Hospitals Enterprise Limited (in INR million, except Ratios)

FY2010 FY2011 FY2012 FY2013 FY2014

Sales 18,257.80 23,319.60 28,000.70 33,177.90 38,616.30

Operating Profit 2861.8 3809.30 4725.80 5535.50 6138.60

Net Profit 1519.60 1817.20 2309.90 3091.10 3307.20

Net Worth 15417.70 17721.60 23522.70 27275.90 29647.20

Debt Equity Ratio 0.45 0.48 0.24 0.33 0.34

Return on Net Worth

(RONW) (%)

9.85 10.66 9.98 11.33 11.15

Net Profit Margin (%) 8.20 7.73 8.16 9.23 8.51

Return on Capital Employed

(%)

11.57 13.03 14.04 13.13 12.72

Interest Coverage Ratio 7.71 6.31 7.29 6.56 5.83

EPS (in INR) 24.60 14.57 17.18 22.22 23.77

Source: Annual Report of the Company, year ending March 31



8. Upcoming Events

Event Organiser Date Venue Highlights Contact Details

BioPharma India Convention, 2014

Terrapinn Holdings Ltd

Nov 18 - Nov 19, 2014

Hyatt Regency Hotel, Mumbai, India

The 12th Annual BioPharma India Convention will focus on the development of biosimilars and vaccines, innovations in biologics manufacturing, regulatory compliance and growing pharma issues in India today.

rachel.james@terrapinn.

com

http://www.terrapinn.co

m/conference/biopharm

a-india/

P-MEC 2014 UBM Asia Dec 2 - Dec 4, 2014

Bombay Convention and Exhibition Centre, Mumbai, India

Latest trends and innovations the pharmaceutical market has to offer

[email protected]

http://www.cphi.com/in

dia/home

3rd India Med Expo, 2014

G India Technologies

Dec 12 – Dec 14, 2014

Hyderabad Trade Exposition Center, Shilpa Park Rd., Madhapur, Andhra Pradesh - 500084

Conferences, seminars, product launches and networking opportunities will be some of the highlights of this event.

[email protected]

sales.indiamedexpo@g

mail.com

CPhi, India, 2014

Chematek Dec2 – Dec 4, 2014

Bombay Convention and Exhibition Center, Mumbai, India

This event will facilitate companies to pick up high quality, low cost pharma solutions.

ivanpapandrea@chem

atek.com

[email protected]



http://www.terrapinn.com/conference/biopharma-india/




http://www.cphi.com/india/home

http://www.cphi.com/india/home









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Delhi NCR, INDIA

Phone: +91-120-4235181

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Industry monitor indian healthcare sector november 2014

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Transcript of Industry monitor indian healthcare sector november 2014