Prof. (Dr.) Prashant Mehta©

M.Sc, Ph.D. (Chemistry), MBA, Ph.D. (Management)

National Law University, Jodhpur

DECODING THE INDIAN HEALTHCARE SYSTEM Emerging Prospects

My Talk Today

•News Makers

•Healthcare Industry

•Key Growth Engines

•Key Inhibitors

•Market Challenges

•Healthcare (Bio-medical & Hospital )Wastes

•Constitutional Provisions

•Landmark Cases

•Regulatory Framework

•Bio-medical Waste Handling Rules, 1998, Amended Rules 2008, Draft Rules 2011

•Handling of Bio-medical Wastes

•Conclusions

•Snap Shots

•References

INDIAN HEALTHCARE LANDSCAPE

“The growing demand for quality healthcare in INDIA and

the absence of matching delivery mechanisms pose a great challenge

to all stake holders and an even greater opportunity for different

service providers.

Trends

• Indian economy is growing at 5.6 percent despite negativeglobal economic conditions.

• Size of the Indian Healthcare Industry is nearly US$ 35 billion

• It contributes over 5 percent to GDP of the country

• It offers employment to over 4 percent population

• Indian Healthcare Industry is growing at rapid pace of 17percent year on year basis. It is fastest growth in the world.

• Healthcare Infrastructure and Resources in India includes:

229 medical colleges, 6,00,000 practicing doctors, 18,000 newdoctors qualifying every year, 15,000 hospitals, 875,000hospital beds, 737,000 nurses, 3,50,000 retail pharmacies,50,000 pathology laboratories and other facilities.

Source: Industry Focus, 2012

Growing INDIAN Economy

GDP GROWTH RATE GLOBAL SHARE – INDIA GDP (%)

Source: International Monetary Fund, World Economic Outlook (2010)

Ever Growing Clinical Statistics: India

• Cancer: 3 million

• Diabetes: 34 million

• HIV: 8-10 million

• Epilepsy: 8 million

• Hypertension: 150 million

• Schizophrenia: 1 million

• Asthma: 40 million

• Alzheimer's: 1.5 million

• Cardiac-Related Deaths: 2 million

• Tuberculosis related Deaths – 0.3 million

• Malaria related Deaths – 0.2 million

• Pharmaceutical – US$10 billion growing at 12% despite global

economic pressures

• Hospitals/Nursing Homes – $12 billion – growing at 20%

• Medical Equipment – $2 billion, growing at 15%

• Clinical Lab Diagnostics –US$2 billion – growing at 30%

• Imaging Diagnostics – US$1 billion – growing at 30%

• Other Services (includes Training and Education; Aesthetics and

Weight loss; US$2 billion – growing at 40%

• Retail Pharmacy; etc.– US$2 billion – growing at 40%

Source: Industry Focus, 2012

Growth Trends, Allocation and Spending : India

Source: Planning Commission

Rs. In Crores

Main Growth Engines: Indian Healthcare

Source: Business Standard, Economic Times, Health site

Components of Healthcare Industry: India

Source: Hospital Market India By Research on India

US $78.6 billion, 2012

Indian Healthcare Sector - Benefitted By

Source: Health Ministry, Government of India

Pharmaceuticals Market: India

Growing and Ageing

Population

Growing Sick Population

Rising Incidence of Non

Communicable and Infectious

Disease

Improved Access to Healthcare

Higher Affordability

Source: Business Standard, IMS Health, 2010Source: PWC Analysis, 2010/India

Healthcare Expenditure: Growth and Share

Source: Business Standard, Hospital Market Research on India, World Bank, Business Monitor Report

Healthcare Expenditure: Projections

Source: Economic Times, 2013

Indian Health Expenditure vs. Major Economies

Source: World Health Statistics, 2013, WHO, ICMR, Aranca Analysis

Medical Equipments Technology Sector: India

• The medical technology sector, which plays a vital role in thedelivery of healthcare services in India was valued at 2.75billion USD in 2008 (National Institute of PharmaceuticalEducation and Research, Ahmedabad).

• It is expected to reach 14 billion USD in 2020 at acompounded annual growth rate of approximately 15%.

• The medical equipment segment forms the largest share ofthe medical technology sector with over 55% of the total sizeof the market.

• The medical implants segment constitutes the next biggestsegment with over 25% of the market.

Source: PWC Analysis, NIPER - Ahmedabad

Diagnostics Sector: India

• In India, the in-vitro segment of the industryaccrued revenues of US $463.50 million in 2012,which is estimated to touch US $1,254 million by2018 growing over the last 5 years at an estimatedCAGR of 20%.

• The principal areas of growth include haematology,biochemistry, complex molecular diagnostics, andspecialty diagnostics.

• The increase in the number of hospitals, healthcarefacilities, development of healthcare infrastructure,the advancement of medical equipment, andcomplexity of diseases has propelled the growth ofthis industry.

• With 40,000 independent pathology laboratories inthe country, the industry is highly competitive andprice driven

• Presently, the lab testing market is largely serviced bysmall unorganized players and hospitals

• By 2010, two million patients are expected for clinicaltrials in India; translating into 20 million tests

Insurance Growth and Penetration: India

Source: ISI Analytics, Healthcare Industry, 2010, General Insurance Council of India, 2010

The Indian economy is growing and willcontinue to provide conducive macro-environment for the industry. Thegovernment is increasing its spend onhealthcare.

The Indian healthcare insurance industryis currently very small and limited, but isexpected to grow at a CAGR of 15%.

Around 80% of healthcare expenditure isfinanced out of pocket. Insurancepenetration will go up dramatically as outof pocket payment for medication is not amodel anywhere in the world.

Traditional Medicinal Care: India

Source: Ministry of Health, RNCOS, KPMG, Aranca Research

Noticeable Trends

The traditional medical sector is developing Traditional Knowledge Digital Library to prevent companies from claiming patents on such remedies. There is growing interest from numerous private equity firms in the traditional healthcare sector in India

Leading Brands And Players

Vicks VapoRub, Amrutanjan Balm, Zandu Balm, Moov Pain Cream and Halls Lozenges are among the leading ayurvedic brands in India. Many big players such as Apollo, VLCC and Manipal Group are also setting up wellness centres across India, with traditional healthcare remedies as the focus of their offerings

Services Offered

Ayurvedic medicines offer traditional Indian health remedies based on natural and herbal ingredients. The sector has broadened its offerings and now includes services on diet and nutrition, yoga, herbal medicine, humor therapy, and spa services

Market Size

The traditional (ayurvedic) medical care market in India was valued at about US $1.4 billion in 2010, and this is expected to rise at a CAGR of 20 per cent over 2011–15

Policy Support: By Government of India

•The benefit of section 10(23G) of IT-Act has been extended to provide long-term capital to hospitals with 100 beds or more. Government is encouraging the PPP model to improve availability of healthcare services provide financing.

Encouraging Private Sector

•The benefit of section 80-1B has been extended to new hospitals with 100 beds or more that are set up in rural areas, such hospitals are entitled for 100 percent deduction on profits for five years.

Encouraging Investment in Rural

areas

•Incentives and tax holidays are being offered to hospitals providing healthcare travel facilities.

Incentives for Medical Tourism

•Allocation of US $5.6 billion, an increase of 20 percent from FY12. Hospitals with at least 100 beds are eligible for 150% deduction from capital expenditure, and exemption on service tax. In 12th Plan US $83 billion was allocated by Planning commission.

Union Budget FY 13

•Custom duty on life-saving equipment has been reduced to 5% from 25%, and exempted from countervailing duty. Import duty on medical equipment has been reduced by 75%, high depreciation on prices of life saving equipment upto 40%..

Tax Incentives

•NHRM was set in 2005-2012 to ensure provisions of effective healthcare to the country’s rural population. This initiative has helped in reduction of Infant Mortality Rate (IMR), Maternal Mortality Rate (MMR), and Total Fertility Rate (TFR).

National Rural Health Mission

(NHRM)

•To cater to the healthcare needs of slum dwellers ban Health Mission (NUHM), 2005 across urban India. This initiative caters to nearly 42.6 million slum developers spread across 640 towns and cities in India

National Urban Health Mission

(NUHM)

•Scotland is extending assistance to Indian pharmaceutical and biotech companies. The country intends to partner with India in stem cell research, clinical trials, regenerative medicine, and affordable healthcare.

International

Co-operations

•Indian government has extended support for improving the quality of healthcare delivery. In line with this, the Union Cabinet approved USD333.61 million to set up the National Cancer Institute.

Establishment

of Facilities

Source: Union Budget FY 2013, Health Ministry, planning Commission, RBI, Deloitt, Livemint

FDI In Healthcare Sector: India

Source: Business Today, Planning Commission of India, Department of Industrial Policy and Promotion

The Indian Pharmaceutical industry hasattracted US $1707.52 million worth of FDI inthe period between April 2000 and April 2010.This FDI is exclusive of investments in shares ofIndian firms. Acquisitions of local players bylarge MNCs illustrate the increasing level ofinterest shown in the Indian market.

Advantage India

Strong Demand Healthcare revenue in India is set to reach US $280 billion by

2020 and expenditure is likely to expand at a CAGR of 12% over 2012-2015

Attractive OpportunitiesInvestment in healthcare infrastructure both hard (hospitals) and soft (R&D, Education ) is set to rise, medical tourism is emerging as one of

the most lucrative area

Quality and AffordabilityThere is a large pool of well trained medical professionals in the

country. Compared to peers it has a comparative advantage in the cost of offering high quality medical services.

Policy Support To develop India as global hub for healthcare, policy support in form of reduced excise, customs duty, service tax exemption, and NHRM

program to boost rural healthcare

Market Size

US $72 billion, 2011

Expected to be US $280 billion, 2020

Source: KPMG, Hospital Market India by Research on India Aranca Research

ReferencesCORPORATE RESEARCH REPORTS:

• HEALTHCARE IN INDIA: A REPORT BY BOSTON ANALYTICS, JANUARY 2009• GLOBAL INFRASTRUCTURE: TREND MONITOR INDIAN HEALTHCARE EDITION: OUTLOOK 2009 –2013 BY

KPMG• STRATEGIES FOR PROVIDING EQUITABLE HEALTHCARE, BY ECS LIMITED, MARCH 2008• PHARMACEUTICAL OFFSHORING LANDSCAPE, ZINNOV MANAGEMENT CONSULTING, SEPTEMBER 2008• INDIAN PHARMACEUTICAL INDUSTRY ON COURSE OF GLOBALIZATION, DEUTSCHE BANK RESEARCH,

APRIL 2008• HEALTHCARE IN INDIA: EMERGINGMARKET REPORT 2007 BY: PRICEWATERHOUSE AND COOPERS (PWC)• HEALTHCARE OUTLOOK, TEN INDUSTRY TRENDS 2007, A QUARTERLY REPORT BY TECHNOPAK, FEBRUARY

07 / VOLUME 1• HEALTHCARE OUTLOOK, NEW PARADIGMS IN HEALTHCARE DELIVERY 2007, A QUARTERLY REPORT BY

TECHNOPAK, FEBRUARY 07 / VOLUME 2• HEALTHCARE OUTLOOK, TRENDS IN HEALTHCARE DESIGN 2007, A QUARTERLY REPORT BY TECHNOPAK,

FEBRUARY 07 / VOLUME 3• HEALTHCARE, MARKET OVERVIEW, INDIA BRAND EQUITY FOUNDATION (IBEF) OCTOBER 2007• OVERVIEW OF THE HEALTHCARE INDUSTRY IN INDIA, THE INDO ITALIAN CHAMBER OF COMMERCE AND

INDUSTRY, APRIL 2007• HEALTHCARE REPORT: BY ERNST & YOUNG, INDIAN BRAND EQUITY FOUNDATION (IBEF), 2006• BOOMING CLINICAL TRIAL MARKET IN INDIA: RNCOS REPORT, NOVEMBER 2007• DRAFT NATIONAL PHARMACEUTICALS POLICY, 2006, PART - A (CONTAINS ISSUES OTHER THAN

STATUTORY PRICE CONTROL), DEPARTMENT OF CHEMICALS AND PETROCHEMICALS, GOVERNMENT OFINDIA, DECEMBER 28, 2005

• HEALTH ATTAINMENTS AND DEMOGRAPHIC CONCERNS: NATIONAL HUMAN DEVELOPMENT REPORT,2001: CHAPTER 5

• THE STATE OF HUMAN DEVELOPMENT: NATIONAL HUMAN DEVELOPMENT REPORT, 2001: CHAPTER 1• HEALTHCARE IN INDIA, CARING FOR MORE THAN A BILLION: BY SRIVATHSAN APARAJITHAN Y, MATHUR

SHANTHI, MOUNIB EDGAR L., NAKHOODA FARHANA, PAI ADITYA AND BASKARAN LIBI, IBM INSTITUTEOF BUSINESS VALUE, IBM GLOBAL BUSINESS SERVICES

• CASE STUDY ON MANIPLE CURE & CARE: INDEGENEOUS CONCEPT THAT COMBINES HEALTHCARE ANDRETAIL IN A SINGLE FORMAT: BY PRICE WATER HOUSE AND COOPERS(PWC) AND DYNAMIC VERTICALSOLUTIONS

• INDIAN PHARMACEUTICAL INDUSTRY: ISSUES AND OPPORTUNITIES: RESEARCH AND MARKETS REPORT (http://www.researchandmarkets.com/reports/35229)

SUMMARIES:

• INADEQUATE REGULATIONS UNDERMINE INDIA'S HEALTHCARE: BY: MUDUR GANPATI: BMJ 2004;328;124- DOI:10.1136/BMJ.328.7432.124-A

• HEALTH CARE IN INDIA: LEARNING FROM EXPERIENCE: BY THEWORLD BANK GROUP• HEALTHCARE INDICATORS: BY MS. MUKHERJI SRIMOTI, COMMERCIAL SPECIALIST, THE U.S.

COMMERCIAL SERVICE IN INDIA, THE AMERICAN CENTER, NEW DELHI• INDIA’S NATIONAL HEALTH SYSTEM PROFILE:WHO• OPPORTUNITIES IN HEALTHCARE: “DESTINATION INDIA”: FICCI AND ERNST & YOUNG.• RURAL HEALTH CARE SYSTEM: THE STRUCTURE AND CURRENT SCENARIO• INTRODUCTION TO NURSING AND HEALTH CARE DELIVERY SYSTEM IN INDIA• A POLICY FRAMEWORK FOR REFORMS IN HEALTH CARE, PERSPECTIVES ON HEALTH CARE IN INDIA: BY

PRIMEMINISTER’S COUNCIL ON TRADE AND INDUSTRY• FAILURE OF PUBLIC HEALTHCARE SYSTEM: CJ: BY SINGH CHANDRA SHEKAR, FEBURARY, 2008• FINANCING THE HEALTH CARE SECTOR IN INDIA: BLOG BY DR SINGH HARMEET, MBA (BIRMINGHAM)• IN CHINA, INDIA, HEALTH CARE BURDEN SHIFTS TO POOR, GROUND-LEVEL IMPLEMENTATION 'IS SIMPLY

NOT THERE': BY POWELL ALVIN, HARVARD NEWS OFFICE• STRENGTHEN THE INDIAN HEALTHCARE INDUSTRY (RECOMMENDATIONS): MODE 1 GATS REPORT INDIA

PAGE 83, 84• ROLE OF PRIVATE SECTOR IN HEALTH CARE IN INDIA CHALLENGES, OPPORTUNITIES & STARTEGIES: BY

LATH G K, CEO, APOLLO HOSPITAL BILASPUR, MP• UNHEALTHY PRESCRIPTIONS: THE NEED FOR HEALTH SECTOR REFORM IN INDIA: BY SUNIL NANDRAJ,

INFORMING REFORMING, THE NEWSLETTER OF THE INTERNATIONAL CLEARING HOUSE OF HEALTHSYSTEM REFORM INITIATIVES ICHSRI, APRIL-JUNE 1997, PP. 7-11.

• MEDICAL TOURISM IN INDIA: ISSUES AND CHALLENGES: BY CHACKO PHEBA, THE ICFAI UNIVERSITYPRESS.

• HEALTH INSURANCE IN INDIA: OPPORTUNITIES, CHALLENGES AND CONCERNS: BY MAVALANKAR DILEEPAND BHAT RAMESH, IIM AHMEDABAD

• INDIA BRAND EQUITY FOUNDATION (IBEF), MARCH 2013, AUGUST 2013 REPORT (WWW.IBEF.ORG)• HEALTHCARE INDIA SECTOR NOTES, MAY 2014, (WWW.IIMJOBS.COM)• INDIAN HEALTHCARE SYSTEM – OVERVIEW AND QUALITY IMPROVEMENTS, DIRECT RESPONSE, 2013:04,

SWEDISH AGENCY FOR GROWTH POLICY ANALYSIS , WWW.GROWTHANALYSIS.SE• INDIAN PHARMA, INC.: CAPITALIZING ON INDIA’S GROWTH POTENTIAL, www.pwc.com/India• INDIAN PHARMA INC. CARING FUP OR NEXT LELVEL OF GROWTH, www.pwc.com/India

ReferencesWebsites:

• www.technopak.com• www.kpmg.com/infrastructure• www.ibef.org• www.dbresearch.com• www.dynamicverticals.com• www.bostonanalytics.com• www.ibm.com/healthcare/hc2015• www.pwc.com/globalhealthcare• www.wikepedia.com/healthcare• www.ficci.com• www.timeswellness.com• www.fortishealthworld.com• www.whoindia.org• www.who.int• www.mohfw.nic.in• www.crisil.com• www.pharmabiz.com• www.pharma.org

Journals

• JOURNAL OF THE ACADEMY OF HOSPITAL ADMINISTRATION• INDIAN JOURNAL FOR THE PRACTICING DOCTOR• JOURNAL OF HEALTHCARE AND MEDICAL TECHNOLOGY AND MANAGEMENT• INDIAN JOURNAL OF MEDICAL ETHICS• THE PHARMA REVIEW AND PHARMA TIMES• JOURNAL OF HOSPITAL PHARMACY

Other Publications:

• MINISTRY OF HEALTH, GOVERNMENT OF INDIA• INDIAN MEDICAL COUNCIL & INDIAN DENTAL COUNCIL• EXPRESS HEALTHCARE MANAGEMENT• INDIAN HEALTHCARE FEDERATION• MEDICA: PHARMACEUTICAL INDUSTRY PUBLICATIONS• MEDICA: HEALTHCARE SERVICES PUBLICATIONS

Chapters:

• COMPETITION CONCERNS: THE PHARMACEUTICAL INDUSTRY BY CUTS INTERNATIONAL• CHAPTER 10: DRUG PRICE DIFFERENTIALS ACROSS DIFFERENT RETAIL MARKET SETTINGS: AN ANALYSIS

OF RETAIL PRICES OF 12 COMMONLY USED DRUGS: BY GODWIN S K AND VARATHARAJAN D., HEALTHADMINISTRATOR VOL: XIX NUMBER 1: 41-47

• HEALTHCARE POLICY AND ADMINISTRATION IN INDIA: BY SAPRU R K, STERLING PUBLICATION, IIEDITION, CHAPTER 15, PAGES 228-249.

My Books:

• Indian Health Sector and Healthcare System: A critical Insight, LAP Lambert Academic Publishing,Germany, 2012, ISBN-10: 3659268895, ISBN-13: 978-3659268892, Prashant Mehta

• Indian Retail Analytics: An In-depth Study of Indian Retail Market, its Dimensions, Opportunities,Problems, and Prospects, LAP Lambert Academic Publishing, Germany, 2012, ISBN-10: 3659147303,ISBN-13: 978-3659147302 PrashantMehta

My Publications:

• Legal Provisions and Management Perspectives of Biomedical and Hospital Waste in India. JournalClub for Management Studies (JCMS),1(II), 11-36 (2014).Dr. Prashant Mehta. ISSN No : 2394 - 3033, V –1, I – 2, 2014

• Biomedical Waste Disposal: Indian Perspective: Scholasticus, Journal of National Law University,Jodhpur Vol. 5 No. 1, September 2007, Prashant Mehta, ISBN: 0975-1157, Indexed