Healthcare is traditionally seen as a social sector in India, with less government focus and low budget allocation. India currently spends cumulatively 4.2 per cent of its GDP on healthcare, with just one per cent being contributed by the public sector, which is amongst the lowest globally. India’s public healthcare system is patchy, with underfunded and overcrowded hospitals and clinics, and inadequate rural coverage. It is high time that we realise the significance of healthcare as an economic development opportunity at national as well as state levels. The Indian healthcare market is growing at a CAGR of ~16 per cent and is expected to reach $280 billion by 2020. A paradigm shift in terms of our healthcare policy as well as our approach towards the sector is needed for India’s economic growth. The government needs to bring in requisite policy changes that can provide boost to the growth of health services sector in reaching out to the masses.
Reforms for medical devices sector focusing on ‘Make in India’
From a diagnostic industry perspective, our business is hit very badly due to rupee depreciation because 30 per cent of our P&L goes in chemicals to conduct tests. These chemicals are imported and are heavily taxed. We pay almost 25-30 per cent of tax on these imported chemicals. Today, the problem is that as the rupee fluctuates, our cost of importing these chemicals goes up and we can’t pass on the cost burden to our patients. The other problem is that we don’t have good indigenous chemical manufacturers in India from whom we can buy these chemicals and reagents. So, if the industry is encouraged to produce these chemicals in India, it will not only benefit these manufacturers but also the entire diagnostic industry and off course patients at large as this will even help in reducing the cost of diagnostic tests. Therefore, the ‘Make in India’ campaign should not only focus on equipment but also diagnostic chemical and reagents. Also ‘Make in India’ is being looked at as manufacture in India while ideally it should be innovate in India. Today, even in the medical devices sector, we are procuring devices from other nations and these devices have not been built for our population. The technology first needs to be calibrated to the Indian market and population. This can be avoided if we innovate for the Indian population and ‘Make in India’.
– Ameera Shah, MD, MetropolisBack