Opportunity Still Exists for Diagnostic Companies in India

In spite of poor economic news elsewhere, demographics in India are fueling a robust private hospital industry, which in turn is driving testing markets.

While India's growth rate is not in the double digits as predicted earlier this decade, quarterly 2009 numbers have been positive and the IMF projects India's growth rate to be 5.8% this year--good news in a time when most developed countries are showing negative growth, according to from healthcare market research publisher Kalorama Information (New York, NY, USA) and McEvoy and Farmer (Seattle, WA, USA). India's 1.14 billion population is increasingly migrating to urban centers where there is better ability to deliver healthcare. A middle class of approximately 200 million has emerged around the cities of Delhi, Mumbai, and the southern corridor of Hyderabad and Chennai, and these urban middle-class consumers are demanding quality healthcare services. Private hospitals, insurance companies, and laboratories have sprung up to fill the fast-rising demand.

"Growth in the Indian IVD market is fueled by private healthcare dollars,” said Bruce Carlson, publisher of Kalorama Information. "Private hospitals are expanding through acquisitions and the building of new facilities, and hospitals will drive testing for the increased patient population.”

While the Indian government spends about 1% of gross domestic product (GDP) on healthcare, or $4 per person, private healthcare spending is four to five times that amount. Although only a small percentage of Indians are covered by health insurance, private insurance plans are expanding, facilitating the use of medical services without payment up-front. Private laboratory chains are thriving. SRL Ranbaxy (Haryana, India) has significant processing labs in Mumbai, Delhi, and other major cities and collects samples from 350 towns countrywide. Dr. Lal Path Labs (Gurgaon, India) has 27 labs and collects from 250 towns. Although foreign companies have not entered the private lab market in a significant way here, Quest recently opened a large facility. Siemens Healthcare Diagnostics, Inc. (Erlangen, Germany), Abbott Labs (Abbott Park, IL, USA), and Beckman Coulter (Fullerton, CA, USA) are among the other companies with significant offices in India, and other foreign companies are expected. Kalorama Information, working closely with the IVD market research firm McEvoy and Farmer, projects the Indian IVD market will grow at 15% per year as a result of this private healthcare expansion.

Kalorama Information supplies independent market research in the life sciences, as well as a full range of custom research services.

McEvoy & Farmer is a partnership between Carl McEvoy and Michael Farmer, both experienced specialists in the study of in vitro diagnostic (IVD) markets

Related Links:
Kalorama Information
McEvoy and Farmer