- December 13, 2015
- Posted by: Team EMeRG
- Category: APAC / ASEAN, BY MEDICAL TECHNOLOGIES, Diagnostic Imaging, GTM Strategy, Market Entry Assessment, NPI Research, Pricing Research, Value Prop Assessment
Overview: Market for Diagnostic labs in India
In India, 70% of the treatment decisions are made based on lab results. Valued at over $7Bn, the diagnostics industry in India is largely unregulated and unorganized. While accreditation is optional, there are <800 medical labs that have been accredited by NABL. This represents roughly 1% of all such labs in the country.
- 100,000 – No. of all diagnostic, radiology and pathology labs in India
- 60% – Standalone diagnostic labs as % of total labs in India
- 20% – Hospital based diagnostic labs as % of total labs in India
The market for radiology labs is comparatively more organized. Use of tele-radiology has aided the market entry of several small labs across tier II/III towns in India
Our Client: A group of renowned medical specialists (KOLs) in Southern India
Challenge Statement: Our clients wanted to assess the feasibility of low-cost diagnostic lab chains in tier III towns of a few states in Southern India
Research Design: While the research was aimed at conducting a detailed feasibility analysis of setting up profitable diagnostic labs; one of the desired end-objectives was to create a business plan that would aid investment pitches to various private investors. Consequently, the research design included understanding in-depth demographics of select cities based on various socioeconomic attributes. In addition to including healthcare providers in the research, it was critical to understand the current need-gaps of the existing patient population in these regions. In accordance with the existing need-gaps, the feasible catchment areas for the upcoming diagnostic labs were to be estimated. In addition, the propensity to pay for various diagnostic technologies along with current levels of awareness were to be plotted.
Research Methodology: A detailed analysis of demographics of the target regions was conducted using secondary research. This included understanding various health delivery sites, government health infrastructure, diagnostic centers (for potential competition); specialists and overall disease burden.
Primary research was conducted with medical specialists, GPs, CPs, competing labs, pharmacies, nursing homes as well as patients and heads of families. Government officials were also interviewed to understand the feasibility of PPPs for diagnostic facilities.
Research Outcome: Key need-gaps in Tier II/III regions were established. Lack of availability of high-end drugs round the clock; lack of availability of key diagnostic imaging tests at subsidized rates and within XX kms radius were some of the key findings. Ability to hire and retain specialists was established as one of the key differentiators.
By traversing the length and breadth of tier III towns in India, the optimal locality, customer segments and business models were recommended. Based on EMeRG’s recommendations, a decision was made to go ahead with the creation of a 2-phased diagnostic lab chain. As indicated by the study, the chain is also looking to integrate 24×7 pharmacy chains in the region to increase patient touch-points while making high-end drugs available in the region.