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Indian Diagnostics
Industry -
Challenges & Opportunities Post Corona Pandemic
Corona – Challenges Or Possibilities
The Corona pandemic has
shaken the world like never before. It has impacted lives
and livelihood, and left an indelible effect on the minds
of all of us. It has changed the world in such a way that
our next generations will not be able to imagine life as
it was before corona.
But life has to move
on, and we have to focus on our future. I have a very
positive outlook for the Indian healthcare industry. The
corona outbreak has provided India with a unique
opportunity. There is the possibility of the world focus
shifting to India as the primary producer and supplier of
APIs, IVDs and generic drug. Global business dynamics are
changing rapidly, and India has the potential to become
the alternative supplier to global drug manufacturers as
new business alignments emerge and the corona aftermath
leads to possible sanctions against some countries due to
the growing distrust.
Most of the Indian
healthcare companies have been behind-thescene ancillary
companies. The current scenario has drawn a lot of focus
to the healthcare industry and its contribution towards
the fight against corona. Its criticality and yeoman
services are being re-established, recognised and
appreciated. There is leading to a major perception shift.
In the history of
mankind this is the first time that diagnostics industry
has been in the absolute spotlight. We have suddenly moved
from under-the-carpet entity to over-the-carpet necessity.
The world has recognised the need for early warning
systems in the healthcare segment – currently for
Covid-19. This trend is going to continue for all forms of
diagnostics in the times to come. There is expectation of
phenomenal growth for the diagnostics industry. Being a
leading exporter of IVDs to the global market, we are
likely to enjoy a sizeable chunk of the global buyers
seeking test kits from our product lines.
Our cost-effective,
society-conscious and ethical business dealings will
further cement our reputation and relationship with our
publics.
Challenges Of A Diagnostics Company During
Corona (and Earlier)
As a company, we have
been able to address most of the concern areas. Our story
has been about constant analysis, introspection,
innovation and transformation.
To meet the onslaught
of the international biggies, we made our own systems and
processes very sound and robust – aggressive automation to
mitigate the risks of human error; focusing on enhancing
our CRM to keep complete tabs on customer requirements and
pain areas; a robust logistics system that ensures minimal
time lag between production and delivery to end-customer,
thus reducing the need for extensive storage facilities as
well as mitigating the losses that happen at warehouses.
We have a very stringent audit and reporting mechanism
that not only highlights impending issues, but also
ensures that performance enhancements are driven at all
levels. We continue to identify the industry best
practices, and ensure its implementation and adherence
within our organisation. We have continued to focus on our
people’s well being and progress, and they have continued
to be the champions within the organisation driving its
continuous and steadfast growth. Marketing has been
another key focus area. We continue to expand into newer
markets while further consolidating our presence in the
existing ones. We continue to maintain strong connects
with the clientele, understanding their needs, and
endeavoring to address them as much as possible.
But policy issues have
continued to hamper our work, especially the inverted tax
policy wherein raw materials are taxes more than finished
products in our segment. This results in imported IVDs
facing an unfair advantage over home grown domestic
products. Ease of business and single window clearances
and financing for projects has been another set of
concerns, coupled with over dependence on imported raw
materials.
Another aspect of
concern has been the availability of samples on which to
run tests – this is one issue that has seriously hampered
our turn-around time for developing and testing kits for
various diseases. There is a need to formulate a proper
policy in this regard and ensure further development of
the home-grown IVD segment.
Expectations From The Government
Various industry
bodies, including AiMED have jointly approached the
Finance Ministry (CBEC) to cut down import duty on raw
materials and hike import duty on finished goods, which is
the lowest in India amongst the BRIC countries. Just to
cite an example, ELISA finished products (HS Code –
38220019 List 4 Sr. No. 32) have 0% duty and 5% IGST,
whereas the raw material for ELISA kits under the same HS
code attract 5-20% import duty plus 12% IGST – tilting the
balance away from the home-grown manufacturers.
The availability of
samples for testing is another great concern, and has to
be dealt with quickly and efficiently.
Various aspects
critical for winning the race in the global healthcare
space are – ensuring a cost advantage over other nations,
faster government permissions and single-window
clearances, ease of doing business, adequate financing,
competent infrastructure and soft loans with longer
repayments. Other focus areas are – creation of large
clusters with common infrastructure, facilities, subsidies
for technological up gradations so that there is higher
sustain ability and economies of scale.
This is a long-standing
concern of both the industry and the policy makers, but
Governments have continued to drag their feet on the
subject rather than take concrete result-driven, time-line
specific actions. Speed is of great essence – if India has
to succeed in capturing a significant portion of the
market up for grabs, they have to display aggression and
garner the first mover’s advantage. Another opportunity
like this is not likely to surface for a long time.
Widespread mushrooming of pathology labs
I do not see a danger
in the proliferation of the pathological labs in the
country – in fact, it is a boon for the masses. Across the
world, the emphasis is on ensuring that the distance
between patients and point of care is mitigated. While the
bigger corporate pathological laboratories serve larger
cities and metros, the smaller pathological laboratories
are reaching the neighborhoods and rural and semi-rural
areas.
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