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Industry Insight – Indian Diagnostic & Pathology Test Laboratory

Indian Diagnostic & Pathology Test Laboratory

Industry Insight

April 2009

4th & 5th Floors, Astral Heights, Road No. 1, Banjara Hills, Hyderabad-500034, India Tel: +91-40-23430203-05, Fax: +91-40-23430201, E-mail: info@cygnusindia.com Website: www.cygnusindia.com
Disclaimer: All information contained in this report has been obtained from sources believed to be accurate by Cygnus Business Consulting & Research Pvt. Ltd. (Cygnus). While reasonable care has been taken in its preparation, Cygnus makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. The information contained herein may be changed without notice. All information should be considered solely as statements of opinion and Cygnus will not be liable for any loss incurred by users from any use of the © Cygnus Business Consulting & Research Pvt. Ltd. 2009 2 publication or contents

Industry Insight – Indian Diagnostic & Pathology Test Laboratory

SYNOPSIS
According to Cygnus estimates, the Indian diagnostic and pathological labs test services market was valued at Rs66.87 billion in FY2008. Indian diagnostics and pathological labs, based on the working level, are classified into high-end labs, accounting for 38% of the market share, manual labs (28%) and second-level regional labs (34%). By therapeutic segment, the major share is held by biochemistry (38%), followed by immunology (23%), haematology (15.8%), critical care, urine routine, others, microbiology and coagulation. Seventy seven per cent of the market is contributed by biochemistry and clinical pathology, which includes immunology and haematology. According to the estimates, the Indian diagnostics and labs test services, in view of its growth potential, is expected to reach Rs159.89 billion by FY2013, reflecting a CAGR of 18.9% during FY09-FY13. Applications of molecular diagnostic testing will revolutionise clinical practices with major implications, opportunities and challenges for the labs. In the backdrop of this encouraging scenario, Cygnus has come up with an industry analysis of diagnostics and pathology test laboratories. The report comprises eight chapters. It discusses general overview, growth drivers of the industry, issues and challenges, quality accreditation, major players, recent trends in the industry, critical success factors and future outlook. The report would be useful to industry researchers, analysts, financial institutes offering credit services to the sector, healthcare-related professionals and individual investors tracking this segment of healthcare in India.

No of Pages: 65

No of Figures: 09

No of Tables: 02

© Cygnus Business Consulting & Research Pvt. Ltd. 2009

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Industry Insight – Indian Diagnostic & Pathology Test Laboratory

CONTENTS
EXECUTIVE SUMMARY........................................................................................................... 9 HIGHLIGHTS ........................................................................................................................... 11 1. Industry & Market Overview ........................................................................................ 13 1.1 Global medical and diagnostics laboratory .................................................................... 13 1.2 Indian healthcare industry .............................................................................................. 14 1.2.1 Market Size and Growth ......................................................................................... 14 1.2.2 Healthcare infrastructure........................................................................................ 15 1.2.3 Overview of diagnostics & pathology laboratory industry ..................................... 16 1.2.4 Existing Business Models ......................................................................................... 20 2. Accreditations & Quality Control ............................................................................... 21 2.1 Introduction ................................................................................................................... 21 2.2 National Accreditation Board for Testing & Calibration Laboratories ........................ 21 2.3 College for American Pathologist .................................................................................. 22 2.3.1 Benefits of CAP Accreditation ................................................................................ 23 2.4 Effect of the accreditation process among the clinical labs ........................................... 23 2.4.1 Quality manual ........................................................................................................ 23 2.4.2 Quality System Procedure ...................................................................................... 23 2.4.3 Standard Test Operating Procedure (SOP)............................................................ 23 2.4.4 Records ................................................................................................................... 24 2.4.5. Quality control (Interlab/external) ........................................................................ 24 2.4.6. Internal audit .......................................................................................................... 24 2.4.7. Overall cost/expenses for Audit ............................................................................ 24 3. MAJOR PLAYERS .............................................................................................................. 25 3.1 Introduction ................................................................................................................... 25 3.2 Metropolis Health Services (India) Ltd. ......................................................................... 26 3.2.1. Company Background ............................................................................................ 26 3.2.2. Contact Address .................................................................................................... 27 3.2.3 Management Team .................................................................................................. 27 3.2.4. Infrastructure & Accreditations ............................................................................. 27 3.2.5. Business Strategy & Competitive Advantages........................................................ 27 3.2.6. Outlook .................................................................................................................. 28

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Industry Insight – Indian Diagnostic & Pathology Test Laboratory 3.3 Religare SRL Diagnostics................................................................................................ 30 3.3.1. Company Background ............................................................................................ 30 3.3.2. Contact Address .................................................................................................... 31 3.3.3. Management Team ................................................................................................. 31 3.3.4. Infrastructure & Accreditations ............................................................................. 31 3.3.5. Business Strategy & Competitive Advantages........................................................ 32 3.3.6. Outlook .................................................................................................................. 33 3.4 Piramal Diagnostics Services Pvt. Ltd. (PDSL) ............................................................... 35 3.4.1. Company Background ............................................................................................ 35 3.4.2. Contact Address: ................................................................................................... 35 3.4.3. Management Team ................................................................................................. 35 3.4.4. Infrastructure & Accreditations ............................................................................. 36 3.4.5. Business Strategy & Competitive Advantages........................................................ 36 3.4.6. Outlook .................................................................................................................. 37 3.5 Dr Lal Pathlabs ............................................................................................................... 38 3.5.1. Company Background ............................................................................................ 38 3.5.2. Contact Address .................................................................................................... 38 3.5.3. Management Team ................................................................................................. 38 3.5.4. Infrastructure & Accreditations ............................................................................. 39 3.5.5. Business Strategy & Competitive Advantages........................................................ 40 3.5.6. Outlook .................................................................................................................. 40 3.6 Thyrocare....................................................................................................................... 41 3.6.1. Company Background ............................................................................................ 41 3.6.2. Contact Address .................................................................................................... 41 3.6.3. Management Team ................................................................................................. 41 3.6.4. Infrastructure & Accreditations ............................................................................. 42 3.6.5. Business Strategy & Competitive Advantages........................................................ 42 3.6.6. Outlook .................................................................................................................. 42 3.7 Anand Labs ..................................................................................................................... 43 3.7.1. Company Background ............................................................................................ 43 3.7.2. Contact Address .................................................................................................... 43 3.7.3. Management Team ................................................................................................. 43 3.7.4. Infrastructure & Accreditations ............................................................................. 44

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Industry Insight – Indian Diagnostic & Pathology Test Laboratory 3.7.5. Business Strategy & Competitive Advantages........................................................ 44 3.7.6. Outlook .................................................................................................................. 45 3.8 Quest Diagnostics India Pvt. Ltd.................................................................................... 46 3.8.1. Company Background ............................................................................................ 46 3.8.2. Contact Address .................................................................................................... 47 3.8.3. Management Team ................................................................................................. 47 3.8.4. Infrastructure & Accreditations ............................................................................. 47 3.8.5. Business Strategy & Competitive Advantages........................................................ 48 3.8.6. Outlook .................................................................................................................. 48 4. GROWTH DRIVERS ........................................................................................................... 49 4.1 Introduction ................................................................................................................... 49 4.2 Healthcare Institutes ...................................................................................................... 49 4.2.1 Foreign hospitals outsourcing diagnostics tests...................................................... 49 4.2.2 Polyclinics ................................................................................................................ 50 4.2.3 Pharmacies .............................................................................................................. 50 4.2.4 Medical KPO ........................................................................................................... 50 4.3 Healthcare Services........................................................................................................ 50 4.3.1 CRO ........................................................................................................................ 50 4.3.2 Molecular diagnostics .............................................................................................. 51 4.3.3 Pharmacogenomics ................................................................................................. 51 4.4 Theranostics, driving diagnostic test in drug development ........................................... 52 4.5 Logistics and Infrastructure ........................................................................................... 52 4.6 IT Infrastructure and Network ...................................................................................... 52 4.7 Insurance ........................................................................................................................ 53 5. CRITICAL SUCCESS FACTORS ....................................................................................... 54 5.1 Automation and standardisation.................................................................................... 54 5.2 Success of tests .............................................................................................................. 54 5.3 Processing blood samples .............................................................................................. 54 5.4 Laboratory accreditation ............................................................................................... 55 6. ISSUES AND CHALLENGES ............................................................................................. 56 6.1 Regulatory issues............................................................................................................ 56 6.2 Reimbursement pressures ............................................................................................. 56 6.3 Analytical and quality issues ........................................................................................... 56

© Cygnus Business Consulting & Research Pvt. Ltd. 2009

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Industry Insight – Indian Diagnostic & Pathology Test Laboratory 6.4 Accreditation procurement ........................................................................................... 57 7. Recent Trends .................................................................................................................. 58 7.1 Diagnostics Majors Mull over Outsourced Path Lab Management ............................... 58 7.2 Consolidation in Diagnostics Services ........................................................................... 58 7.3 Diagnostics and Pathology Market Set to Flourish........................................................ 59 8. Future Outlook ................................................................................................................. 60 ANNEXURE I........................................................................................................................... 62 Bibliography .......................................................................................................................... 62 ANNEXURE II.......................................................................................................................... 64 Glossary ............................................................................................................................... 64

© Cygnus Business Consulting & Research Pvt. Ltd. 2009

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Industry Insight – Indian Diagnostic & Pathology Test Laboratory List of Tables Table 1.1: Molecular Diagnostics Technologies Table 1.2 Public healthcare physical infrastructure

List of Figures Figure 2.1: Indian Healthcare Market Size (FY03-FY08) Figure 2.2: Healthcare Expenditure (2007) Figure 2.3: Medical Devices & Diagnostics Market (2008) Figure 2.4: Indian Diagnostics & Pathology Test Market (2005-2008) Figure: 2.5 Structure of Diagnostics & Pathology Labs Industry Figure 2.6: Indian Diagnostics and Pathology Market (2008) Figure 2.7: Indian Diagnostics and Pathological Test Market by Therapeutic Segment – 2008 Figure 2.8 Referral Lab business model Figure 8.1: Indian Diagnostic and Path Labs Market Forecast (2008-13)

© Cygnus Business Consulting & Research Pvt. Ltd. 2009

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... Susan Cain makes a powerful case for the wisdom of introspection. She also warns us ably about the downside to our culture’s noisiness, including all that it risks drowning out. Above the din, Susan’s own voice remains a compelling presence—thoughtful, generous, calm, and eloquent. Quiet deserves a very large readership.” —CHRISTOPHER LANE, author of Shyness: How Normal Behavior Became a Sickness 4/929 “Susan Cain’s quest to understand introversion, a beautifully wrought journey from the lab bench to the motivational speaker’s hall, offers convincing evidence for valuing substance over style, steak over sizzle, and qualities that are, in America, often derided. This book is brilliant, profound, full of feeling and brimming with insights.” —SHERI FINK, M.D., author of War Hospital “Brilliant, illuminating, empowering! Quiet gives not only a voice, but a path to homecoming for so many who’ve walked through the better part of their lives thinking the way they engage with the world is something in need of fixing.” 5/929 —JONATHAN FIELDS, author of Uncertainty:...

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