Healthcare in India is undergoing transformation across the continuum. Technology is redefining possibilities in healthcare delivery and expanding global industry leadership of biotech and pharma while seeking elusive solutions for sustainably addressing India’s needs. Devices and diagnostics are moving into an era of growth driven by unmet clinical needs and greater focus on domestic manufacturing. While there is robust growth across segments, challenges abound and call for attention from both policymakers and industry to sustain the momentum across segments.
Innovation is a common catalyst across the segments for driving growth, increasing value creation, creating sustainable competitive advantage and expanding Making-in-India. In this White Paper, we highlight key innovation trends across healthcare continuum with particular emphasis on the Indian landscape and means to foster greater engagement in manufacturing. With National Health Policy 2017 recently being approved by the Cabinet, healthcare expenditure intended to be increased to 2.5% of GDP and India embarking on a planned approach to bridging the healthcare divide while maintaining industry competitiveness, timing is optimal for this discussion.
Pharmaceuticals – Embracing Innovation to Zoom beyond Current $36Bn
The Indian pharmaceutical industry is a strong incumbent manufacturing success story with significant global leadership in generic formulations and close to $15Bn of exports. Historical industry growth has been largely driven by volumes but future avenues for expanding market footprint and progressing in the value chain entail high focus on innovation adoption. Leading pharmaceutical companies are graduating from substitutable generics and foraying into specialty pharma and complex generics that provide higher pricing and margins in regulated markets and greater competitive advantage in out-of-pocket markets such as India. Additionally, there is selective engagement by the industry in novel drug discovery and development and India- innovated molecules are now a reality. In the drug discovery and development segment, we note increasing use of bioinformatic tools and predictive in-silico modeling. While Indian industry has limited engagement in discovery and development, CROs continue to enjoy notable presence and have embraced this innovation trend. On a relative plane, innovation in manufacturing lags behind and calls for near term attention, especially given the looming quality concerns.
Medical Devices – Innovation Adoption for Expanded Clinical Possibilities
India is at the verge of a tectonic shift and innovation will be a key driver of change in addition to market and regulatory aspects. Prominent innovation trends in the segment include emerging use of 3D printing in medical applications across product development and commercial manufacturing, increasing pursuit of drug device combinations for life cycle management and competitive advantage, innovations in biomaterials expanding possibilities, pervasive use of robotics, artificial intelligence and machine learning for developing smart devices, and leveraging Internet of Things (IoT) to progress towards a more connected continuum of care.
We note a robust and vibrant startup innovation landscape with several ventures focusing on technologically sophisticated yet contextually relevant innovation. Early stage non-dilutive funding has stimulated the startup ecosystem and institutional pipeline has been nurtured as well. At the industry end, there is significant appetite to absorb new technologies, progress in the value chain and build competitive product portfolios. While role models are now emerging, several structural elements across policy, regulatory and markets continue to be deterrents for significant investment in the sector by both Indian companies and multinationals. We believe this segment holds potential for expanding manufacturing but draw attention of all stakeholders to the challenges emphasized in the last section of this White Paper.
Innovations in Diagnostics – Expanding Access and Empowering Clinicians & Consumers
Diagnostics as a segment has witnessed robust growth driven by expansion in overall healthcare delivery, increased use of diagnostics and better healthcare access. We expect 15-20% growth to continue and the segment becoming more receptive to widespread adoption of innovation advancements. In diagnostics delivery, notable trends include greater emphasis on consumer convenience, increase in home collection of samples, digitization of reports and continuing pursuit of PPPs as a means to bridge the infrastructure gap. New frontiers in product innovation include genomics, less invasive testing approaches such as liquid biopsies, and more sensitive and multiplexed Point-of-Care tests across primary care, critical care and home use products. While the innovation landscape in India is very encouraging, widespread adoption challenges need to be addressed to realize the value of the country’s innovation pipeline.
Healthcare delivery – Technology Led Transformation and Inclusive Growth
Healthcare delivery comprises about 65% of the Indian healthcare market and reflects growth rates north of 20%. Despite the robust growth, there are significant unmet needs and inefficiencies across the spectrum and glaring inequities in access to healthcare. These challenges have inspired quintessential innovations that can balance cost and quality. We note an active landscape of innovation in delivery models with involvement of public and private sector, and proliferation of startups pursuing technology led solutions in healthcare delivery. Innovations in healthcare delivery are driving patient convenience, increasing efficiency and expanding healthcare access.
Marching towards Make-in-India – Way Forward and Recommendations
Biotech and pharma are successful incumbent Make-in-India segments and devices and diagnostics segments hold potential to expand local manufacturing by at least five fold if an enabling environment is created. In the pharmaceutical segment, we need to urgently trigger adoption of sustainable solutions to address the current quality considerations plaguing industry’s continued competitiveness. Additionally, we need to create a rewarding ecosystem where manufacture of API for domestic markets can be incentivized and the dependency on Chinese imports can end. Devices and diagnostics, on the other end, represent a segment with extreme dependency on imports and call for structural changes to nurture an attractive environment for both Indian companies and multinationals to engage in manufacturing domestically.