The outbreak of the COVID-19 pandemic was a wake-up call for countries across the globe to review their healthcare systems and re-evaluate their preparation to address global health emergencies. The first few months of the pandemic made it evident that there is a need to remain prepared for health emergencies, which is impossible without a public-private partnership. India has emerged from the pandemic as a global example for handling the crisis with utmost responsibility. The country’s healthcare system caters to a population of 1,412 million. The sector has been growing at a CAGR of 22 per cent since 2016, and has the potential to generate 500,000 jobs every year between 2017 and 2022.
Numerous factors are leading to the growth of the healthcare sector in India like the elderly population, growing middle class, a rise in lifestyle diseases among people, public-private partnerships, and the adoption of digital technologies and telemedicine. These factors have made the country ripe for new foreign investments. The private sector investments in the Indian healthcare sector mean the country can become an international hub of health tourism.
Government efforts to strengthen the sector
Over the years, the Indian government has brought conducive policies and deep structural and sustained reforms that have strengthened the sector and encouraged FDI. With access, affordability, accountability, adoption and awareness at the heart of its approach, the government has introduced schemes such as Ayushman Bharat Jan Arogya Yojana (health insurance scheme), Ayushman Health and Wellness Centres, Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) (generic medicines) and Ayushman Bharat Digital Mission (ABDM) and PM Ayushman Bharat Health Infrastructure Mission.
The policies are targetted at a better healthcare future, boosting domestic manufacturing of pharmaceuticals and medical devices. For instance, Ayushman Bharat Digital Mission (ABDM) is in line with the need for the rapid adoption of the latest technologies. It will develop the backbone to support the integrated health infrastructure and bridge the gap among stakeholders in the healthcare ecosystem through digital highways. ABDM has been introduced at the right time with the increase in digital adoption post-COVID-19 pandemic. One evidence of the benefits of digital adoption is the e-Sanjeevani app, which facilitated over five million teleconsultations and saw around 40,000 teleconsultations every day.
While digital infrastructure is vital to delivering health services in today’s time, it is only possible with a strong partnership between public and private health programmes.
Scope of medical devices market
In the post-pandemic world, especially with advancements in technologies, medical devices make for an essential part of the healthcare system. Invest India, India’s national investment facilitation agency, revealed that the size of India’s medical device industry is estimated to be $11 billion and is set to grow at a CAGR of 14.8 per cent and reach $11.86 billion in 2021-22, $65 billion by 2024 and $50 billion by 2025. The manufacturers of medical devices in India mostly cater to local consumption, and MNCs dominate the high-tech medical devices market. About 85 per cent of the total domestic demand is dependent upon imports. The sector, with the highest growth potential, is in immediate need of self-reliance. India is ranked as the fourth-largest market for medical devices in Asia.
The pandemic is a good example of bonhomie between the private and government sectors leading to an effective response. The future proposes the prospects of partnerships between the two sectors in areas like telemedicine, health IDs, health records, e-pharmacy, digi-doctor services, etc.
Production of generic drugs
India’s Active Pharmaceutical Ingredients (API) market is one of the most attractive investment destinations for global investors and equity managers. The sector has grown three-fold in the past year. It is because India is one of the largest makers of generic drugs. A generic drug is one that has the same chemical substance as the drug that was earlier protected by the patents. The Indian pharma sector also caters to 50 per cent of the global demand for vaccines, 25 per cent of the medicines in the UK and 40 per cent of the generic drug demand in the US.
The outbreak of the pandemic has further boosted the sector. It opened ample opportunities for the growth of the API market in the country. Many major countries had boycotted trade with China due to the pandemic spread, and so did India. It resulted in the emergence of manufacturing facilities in the country and improved the status of domestic players. As a pharma hub, India witnessed increased demand from across the globe for medical supplies and drugs. As a result, the Indian API market was valued at $11806.93 million in FY2021 and is expected to grow at a CAGR of 12.24 per cent in the future.
For a very long time, India has been at the forefront of vaccine production and administration. Trials of cholera, typhoid and plague vaccines, as well as research and vaccine development, all happened within the country. Throughout the first half of the 20th century, vaccine institutes were founded. The country has maintained its independence through domestic production, even if the trend has shifted from public to commercial vaccine manufacturing facilities. Since January 2011, there has been no poliomyelitis in the nation, and smallpox has been eliminated. The developed health-providing facilities not only benefitted the Indian population, but also helped the world when the COVID-19 pandemic struck, where India actively and immensely contributed to the vaccination drive of other countries as well.
However, it was not just the production of drugs that made India a leader in the health sector during the production. The large-scale production of PPE kits, testing kits, masks and vaccines made India an essential supplier across the globe when the pandemic was ravaging the countries. One example is the 62 crore COVID-19 testing kits exported by the Indian Council of Medical Research (ICMR) between July and September. Similarly, the public-private partnerships took India from suffering from mask shortage at the beginning of the pandemic to producing two lakh PPE kits and two lakh masks daily.
Shakespeare has said, “Sweet are the uses of adversity,” which fits rightly for the healthcare industry. The outbreak of COVID-19 brought a tectonic shift across sectors and industries, and in people’s lives. However, at the same time, it was an opportunity for companies to rise to the challenge and use the adverse situation to serve the world. The challenges posed by the pandemic were overcome by developing low-cost, scalable and quick solutions. It also proved to be a catalyst for expanding telemedicine and the home healthcare market. India boosted the domestic manufacturing of pharmaceuticals, supported by the PLI scheme, and opened flood gates for investments in contract manufacturing and research, over-the-counter drugs and vaccines. The growth of all these different sectors during the pandemic clearly indicates that the country has more untapped potential, which can be leveraged to make India a global healthcare service hub.