Medical Diagnostics - India

April 2009

Executive Summary
Medical Diagnostic accounts for x% of the healthcare industry in India Diagnostics market comprises of
Diagnostic Services Market : Estimated at INR XX bn in 2008 Diagnostic Products Market: Estimated at INR YY bn 2008

Market

India has more than A laboratories

Drivers & Challenges

Drivers: Increase in lifestyle-related diseases, changing demographics, growth in medical outsourcing, medical tourism, nascent but growing medical insurance, rising PE/VC investments Challenges: Difference in import duty on diagnostic kits for public and private sector and Lack of accreditation/certification of diagnostic centers Diagnostic equipments market is regulated by both central and state government Major governing authorities include U,V,W,X Regulatory process for diagnostics equipment is segmented into
Critical - A Non critical - B

Rules and Regulations

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Manufacturers need an import licence and product registration certificate to import diagnostic equipments Diagnostic test services market is highly fragmented with many unorganized players

Competition

Some of the major players are A,B,C,D

Foreign players (like U, V, W) account for a% share in diagnostic equipment market

Some of the major domestic manufacturers are X,Y,Z

 Market Overview Drivers & Challenges Rules & Regulations for Manufacturers/Suppliers Competition Key Developments

MEDICAL DIAGNOSTICS INDIA.PPT

Indian diagnostics market is witnessing significant growth with major contribution from the In-Vitro Diagnostic (IVD) segment
Market Overview
Indian diagnostic market comprises of
Diagnostic test services market Diagnostic products/instruments market

Diagnostic Test Services Market

INR bn
40 30 20 10 0

a% Y X

Diagnostic market accounts for x% of healthcare sector India currently has over A hospitals and B diagnostic laboratories About c% of the treatments in India are based on lab diagnostic tests

IVD Test Segments (2008)

f% e% d% c% b%
Source:

g% h% a%

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BioChemistry Immunology Haematology Critical care Urine Routine Others Microbiology Coagulation
10 5 0

In 2008, IVD services market was INR XX bn 2007 2008

2006

Market size estimation is difficult as diagnostic market is highly unorganized

IVD Instruments & Reagent Market

b% U V

INR bn

20 15

2006

2007

2008

MEDICAL DIAGNOSTICS INDIA.PPT

Drivers & Challenges

Drivers
Increase in lifestyle-related diseases Changing demographics Growth in medical outsourcing Rapid growth of India as a destination for medical tourism Increasing penetration of medical insurance Rising PE/VC investments

Challenges
Difference in import duty on diagnostic kits for public and private sector Lack of accreditation/certification of diagnostic centers

MEDICAL DIAGNOSTICS INDIA.PPT

Organized pathlabs are rapidly expanding using the hub and spoke model, including small, independent labs in the network
Diagnostic Testing Market Structure
Highly fragmented with ~X laboratories:
Hospitals: a% Independent labs: b% CC CC CC CC Reference Lab Satellite Lab CC

Hub and Spoke Model

Among the labs in India

Automated u% Semi - Automated v% Manual w%

Organized players account for z% of market and expanding with hub and spoke model:

Reference labs act as regional hubs and are usually located in large metros Collection centres are located in hospitals, nursing homes, pathology labs, doctors clinics etc. Satellite labs and collection centres are either owned or franchised

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CC
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Satellite Lab

CC

CC

As organized players grows their share, small, independent labs are:

Becoming franchisees in the hub and spoke model Partnering with large chains on referral basis Getting acquired by large chains, which lowers the cost of expansion and start-up time for the latter
Source:

Reference labs: Hub with comprehensive or specialized testing capability Satellite labs: Limited testing capability; feed reference labs Collection centres (CC): Collect samples for forwarding to either a satellite lab or reference lab A variation in this model is the absence of satellite labs and the existence of only reference labs and collection centres

Manufacturers IVD Products/Instruments Market

Players in the market
The IVD products market in India is primarily dominated by foreign companies Global IVD companies like A,B,C,D have strong presence in the Indian market

IVD Products Market Share (2008)

Domestic players have forayed into the market and are establishing themselves by producing cost effective and quality goods a% of diagnostic medical equipment and supplies is imported

Low-cost reagent kits are being imported from X,Y and Z

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a%

b%

Foreign Players Domestic Players

Source:

Major Players Diagnostic Test Services Market (1/2)

Company X Overview
Started in 19- Diagnostic facilities in their subsidiary U Facilities allow for investigation in Biochemistry, Haematology, Clinical Pathology, Microbiology, Xray, Ultrasound with Color Doppler, ECG, Echo Cardiography and Treadmill Started in 19- A labs and B sample collection centers Accreditation: NABL, CAP

Business Outlook
Entered into a JV with V to set up a diagnostic laboratory in Hyderabad at an investment of USD YY mn

Established an international alliance with U for testing Planning to set up -- labs and -- collection centers by 20- Expand operations in southern and western regions investing INR X mn Planning to invest INR Z mn in brand building Growing inorganically It is looking at overseas expansion as well as outsourcing opportunities Plans on increasing their portfolio to X more labs Targeted revenue of INR X bn by 20- In 20--, acquired two labs in North India and a majority stake in Bangalore based YY

Started in 19- U laboratories across V cities globally, W laboratories in India, X collection centers Capability to carry over A routine investigations with over B technologies - e.g. biochip, DNA sequencing, pathology, radiology ICICI Ventures owns a% of the company Accreditation: CAP, NABL

Note: This list is not exhaustive Source:

SAMPLE
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Thank you for the attention

The Medical Diagnostics report is a part of Research on Indias Healthcare Industry Series. For more detailed information or customized research requirements please contact: Gagan Uppal
Phone: E-Mail: +91 22 4098 7530 gagan.uppal@netscribes.com

Gaurav Kumar
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MEDICAL DIAGNOSTICS INDIA.PPT