Rising Consumer Demand Fuels Innovation & Growth

The Indian consumer has become very health conscious, and this is visible in the percentage of the household spend that is being spent on health. In the recently released monthly spend data it has been realised that the average Indian household spends almost 5.9 per cent of the monthly spending on health. This has doubled since 2012 data where the number was below 3 per cent. This clearly shows two things, one is the disposable income of the Indian family has gone up and, in this context, Indian families have been prioritising health.

While this is welcome news, this also means that the entire Life Sciences and healthcare ecosystem has now to gear towards this demand that is coming in from Indian consumers which includes access to better healthcare facilities, new innovative therapies and improved strategy towards prevention and wellness.

The birth of modern Indian healthcare can be traced to the setting up of the Madras General Hospital in 1667. Since then we have come a long way today with more than 45 facilities in India that have the JCI acceleration, the third highest in Asia after Singapore and Thailand The healthcare (Hospital) sector is expected to grow almost 11 per cent CAGR for the next 3 years reaching around USD100 Billion by FY 2027. While the quality of care has significantly improved, the outcomes today for procedures in Indian corporate hospitals match global standards. This is possible not only because of the skill and experience of Indian doctors but also because of the introduction of new therapies and leveraging advanced technologies including robotic surgeries and advanced diagnostics.

The Indian pharmaceutical sector has also stepped up with expected growth of around 14 per cent CAGR. The industry is roughly around USD 50 Billion today but expected to grow to USD 130 Billion by 2030. This is not only back of exports but also due to increased demand in the domestic market with Indian consumers expecting innovative therapies in areas like biologics, immunotherapies, and nutraceuticals.

A combination of these have led to increased life expectancy in India to almost 70 years today. The role of R and  D and clinical research in this process is very critical. For the industry to improve the clinical outcomes the clinical trials need to held in India and on Indian subjects. This will lead to a big change in the way therapies are going to be developed in India. There are many barriers to research today but the first among them is the use of data for research. The DPDP Act will provide the right guard rails for the sector to start collaborating with technology platforms, startups, academic institutions as well as other independent research agencies to enhance our therapies.

Given the vast nature of our country and the population size of 1.4 billion, we may not have the luxury to adhere to traditional standards of health like 30 beds per 10,000 population as prescribed by the WHO. We will need to look at new care models, leveraging digital platforms and concepts like telemedicine and tele-ICU to cover the length of the country and enable our citizens with state-of-the-art healthcare. That is the key to increased collaboration in the ecosystem.

The government has also created new policies and programs to boost. Under PMJAY the Ayushman Bharat Digital Health Mission is now seeing in patient cover to almost 50 Crore citizens that are belonging to certain strata of society. The annual cover is also likely to be increased from Rs 5 Lakhs to Rs 10 lakh per family per year from 2023-24 onwards. This has led to an increase in procedures that are covered under this program. The government is

further looking at enhancing this through a wellness program. By August 2023, approximately 442 million ABHA numbers had been created, with 293 million patient health records associated with these ABHA accounts, enabling individuals to conveniently access and oversee their digital health records from any location at any time. Soon leveraging the health stack, we should see the creation of more Unique Health Records, faster reimbursement with the introduction of the HCX platform, and a healthier India. There are further discussions to create a paradigm for interoperability.

Health is a multi-dimensional phenomenon. There is no single parameter that determines good health, but a combination of factors. Hence it is very important that the ecosystem comes together to create innovative therapies and build a futuristic healthcare system of tomorrow. But the driver for this must come from the consumer. It is the consumer that demands better health services from the ecosystem and is willing to pay for it that enables the ecosystem to invest in R and D and develop innovative therapies to help consumer achieve their healthcare goals.

The author is Partner, Deloitte India

Vikram Venkateswaran

Guest Author