With new business models and renewed interest from the government, the dialysis market in India is ready to break barriers of accessibility and affordability By M Neelam Kachhap
Rising incidence of diabetes and hypertension have taken a devastating toll on Indians. The huge number of kidney disease patients bears witness to it. “Nearly 10-15 per cent of India’s 1.25 billion people suffer from kidney diseases and ailments,” says Dr Gaurav Thukral, Senior Vice President and Business Unit Director, HealthCare at HOME India. Of these, a large number of patients progress to end-stage renal disease and require organ transplant and renal replacement therapies to survive.
“As of 2016, we estimate that about 13 lakh patients in India require some form of renal replacement therapy, with about two lakh new patients being added every year,” says Shriram Vijaykumar, MD and CEO, DaVita Care (India) Bangalore.
Experts believe that the average age of chronic kidney disease (CKD) patients in India is much lower than patients in western countries. According to some estimates, the average age of CKD patients in India is in the range of 45-50 years where in the western countries, the average age of CKD patients would be around 60 years. This means that in India patients need longer care regimens than their counterparts in other countries.
Also, there is a marked difference in the prevalence of CKD among various regions in India. Although it is reported that Northern India has higher prevalence rates than southern India, a new form of CKD has been reported from parts of Andhra Pradesh and is said to be of unknown origin.
Scope of market
Renal replacement therapy market is segregated into hemodialysis and peritoneal dialysis (PD). “Haemodialysis is the largest and most widely accepted modality for dialysis, with approximately 90 per cent of the market share. The remaining share goes to peritoneal and other dialysis modalities. Currently, the average life expectancy of patients on End Stage Renal Disease (ESRD) is between three to four years,” says Vijaykumar. The size of renal replacement market in India has almost doubled in the past five years. “Most recent estimates put the total number at 1.25 – 1.50 lakh all India. PD market is still relatively small at 6,000 – 8,000 pan all India,” says, Akash Nayak, Director of business development and Scientific Affairs, Dr Nayak Dialysis Centres.
Renal replacement services are provided by hospitals, stand-alone clinics, nursing homes, dialysis care providers and home healthcare providers. “There are a total of 3300 hospitals (private/ government/ NGO’s/ nursing homes and other dialysis chains) that provide dialysis in India. In addition, BBraun, Davita, Nephroplus are few of the chains that represent pure play dialysis players,” says Vikas Verma, Business Head – Avitum (Renal Division), BBraun India.
However, some experts believe that this is just the tip of the iceberg. “Healthcare service providers have so far only seen the tip of the iceberg in this market, as affordability of the average man in India increases and therapy gets cheaper due to higher volumes. There is going to be an explosion in the size of the market,” says Nayak. “This market extends to the dialysis machines, dialysis consumables, pharmaceuticals, skilled healthcare professionals, health insurance, surgical, and many other products and services,” he adds.
While it may seem like there are many providers servicing this sector, but like everything else in healthcare, access is a major problem. “Though 70 per cent of the population lives in rural India, sadly 90 per cent of the dialysis facilities are in urban India (i.e. metro cities and Tier I and II cities/ towns),” says Verma.
Vijaykumar adds saying, “As of 2016, we estimate that about 13 lakh patients in India require some form of renal replacement therapy, with about two lakh new patients being added every year. The larger story, however, is that of access. Only about 10-12 per cent are on some form of renal replacement therapy.”
Experts believe 2.2 lakh new patients of end stage renal disease get added in India every year resulting in additional demand for 3.4 crore dialysis sessions. Needless to say that there is a demand-supply gap with only the demand being met by with around 4,950 dialysis centres in India, largely in the private sector and concentrated in major towns. Besides, one dialysis session costs about Rs 2,000 mounting an annual expenditure of more than Rs 3 lakh for the patients.
“The cost of renal replacement therapy varies in private and government sector,” says Dr DS Rana, Chairman, Department of Nephrology, Sir Ganga Ram Hospital, Delhi. Dr Rana has also served as the Past Secretary & President, Indian Society of Nephrology and is the Founder Secretary, Indian Society of Hemodialysis. He says that a few states are providing highly subsidised maintenance haemodialysis to patients of their states mainly in South.
“In private sector, the cost of maintenance haemodialysis varies from Rs 2000 to Rs 4000 per session,” Dr Rana informs. “The cost of transplantation also varies from Rs 4 lakhs to Rs 8 lakhs and maintenance cost of life saving immuno-suppressive drugs varies from Rs 10000 to Rs 20000 per month,” explains Dr Rana.
Dialysis service providers engage different business models to deliver services. There are in-centre dialysis, hospitals, independent dialysis centres, home dialysis, PD and home haemodialysis. All these can contribute to better outcomes for patients.
Nayak says, “Independent centres can help in reduction of overall cost of dialysis, but most patients in India still prefer to be in a unit attached to a hospital because they feel safer with the easy availability of 24X7 emergency care. Hospitals also tend to stock all the medicines that the patient needs regularly for therapy in their in-house pharmacies. It will take some time before our patients can get used to the standalone model as in the US.”
Offering a different take, Vijaykumar says, “At present, the Indian dialysis market is largely in-hospital: with most large and medium sized hospitals having their own dialysis unit. Independent or standalone centres is still an emerging concept but is gaining ground rapidly. Globally, we see that most maintenance haemodialysis is done in independent centres whereas hospitals provide more of the acute and higher end dialysis services. Hospital centres are able to offer advanced therapies like haemodiafiltration (HDF), Double Filtration Plasmapheresis (DFPP), etc.”
“Home haemodialysis, which is largely non-existent in India, brings the comforts of a high-quality dialysis programme to patients homes, ensuring better compliance to dialysis regimes, better clearance and zero cross-infections,” he adds.
There is a growing interest in stand-alone dialysis service centres. Cost of setting up a centre is competitive and a slew of investors both Indian and foreign have stakes in this segment. “A good quality small unit (five to six new machines) can require an upwards of Rs 50 lakh as an initial investment, without including the land. Larger units can easily exceed Rs 100 lakh, one crore,” enumerates Nayak.
Talking about the market opportunity, Vijaykumar says, “For pure play healthcare service providers, the biggest opportunity lies in creating a quality and outcomes-based healthcare model. Dialysis can be a leading harbinger of change, as this is a space where outcomes are tangible. Results of good quality dialysis leads to improved quality of life for patients. The obvious next step is to look at reimbursements, from private insurance and government providers, for dialysis. Like in the West, if we move to an outcomes-based scenario, it is a win-win situation for governments, providers and patients alike.”
“From a capacity building perspective, there are opportunities to create standalone dialysis centres that cater to a wider pool of patients – primarily in suburban and semi-urban areas, as well as Tier II cities,” he adds.
Similar opportunities exist for home healthcare players. “Opportunities for home healthcare in dialysis is huge in India. Although acceptance to Peritoneal Dialysis (PD) is low given that Next of Kin (NOK) of the patient finds it difficult to do it at home doctors also don’t prescribe it given the fact that compliance is poor. Home healthcare bridges the gap and increases access to care as dialysis centres are concentrated in cities only. Home PD makes life near normal and not riddled by issues of frequent hospital visit and infections,” says Thukral.
Market for equipment and consumables
Besides services, equipment manufacturers also consider India as one of the large markets. “There were 3557 dialysis machines sold in 2015 in India with average price of Rs 6.5 lakhs each,” shares Verma. “With regard to consumables, there are various consumables used in dialysis and the market for consumables for 2015 was pegged at a little over Rs 10 billion,” he adds.
There are three segments in dialysis equipment: budget machines (non upgradeable) for chronic/ maintenance haemodialysis; premium machines (upgradeable) with options of maintenance dialysis and other therapies like ‘Online Haemodial filtration’ etc and CRRT Machines (high end) – majorly used in ICU settings to treat sensitive and acute cases ( eg. multi organ failure etc).
Dialysis is expensive, so affordability remains an imperative challenge for service providers. With insurance still staggering in India and high cost of treatment regimes, drop out rates are high. “Poor healthcare insurance coverage (nearly 80-90 per cent pay out of pocket for dialysis) makes it very expensive for patients to stay on therapy for the required period since they need to pay a heavy amount out of pocket, relatively low patient compliance and non-adherence to dietary and fluid restrictions is seen sometimes and can make management difficult. These factors lead to high drop-out rate or suboptimal therapy,” says Nayak.
Besides, accessibility is also a major factor for drop-outs. If one adds the fact that there are a handful of nephrologists and even fewer dialysis technicians and nurses to service these patients, you begin to understand the hardships surrounding dialysis service in India. “I would say we face two major challenges: lack of a social security net and not enough trained manpower. We need to build syndicated registries like the USRDS (United States Renal Data System) which tracks outcomes for dialysis and pays providers on the quality of services. Thus, patients, governments and providers have a transparent system that compares dialysis programmes that are truly beneficial versus those that are in name only,” says Vijaykumar.
The game changer
If what Vijaykumar suggests becomes a reality in India, it will change the way dialysis is accessed and delivered in India. With the ‘National Dialysis Services Programme’ the government has taken a small but correct step in the direction. The government intends to make funds available through PPP mode under the National Health Mission, to provide dialysis services in all district hospitals. Further, the Finance Minister proposed to exempt certain parts of dialysis equipment from basic customs duty, excise/ CVD and SAD to bring relief to patients as the government foresees a reduction in cost of dialysis in India. But has this really affected the cost?
“Not as yet,” says Nayak. “But we need to understand that the cost of dialysis service is not as dependent on the cost of consumables as one might think. Apart from the consumables and machines, the cost of the therapy arises from salaries of technicians, nurses and doctors, pharmaceuticals, rent or land cost, utilities including RO water plant, electricity etc,” he further adds.
Some experts believe that there are more to tax exemption than which meets the eye. “Although the waiver for duty on dialysis equipment has brought some relief, there is the double whammy of multiple layers of taxation on consumables. We use consumables like blood tubing and dialysers with every dialysis session – which now have both import duties and sales taxes, thereby significantly driving up costs,” says Vijaykumar.
Efforts by the government are laudable but there is much more that the government can do for this segment. “India should manufacture everything including dialysis machines and dialysers in India and that will be major step to reduce the cost of dialysis,”opines Dr Rana.
“In the absence of adequate number of nephrologists, we should also provide reasonable training in dialysis therapy to physicians so that large number of centres situated in small towns and may be in near future in rural areas can be managed by these trained medical manpower,” he adds.
Besides the government, NGOs can also provide support to dialysis services. “NGOs can render real service in this area to make dialysis affordable and accessible,” says Dr Rana.
“The government on its end should provide subsidised immune-suppressive drugs, which are required lifelong for transplant patients,” he further adds.
Besides this, nurturing good transplant centres is a pressing concern. “Every medical college should have transplant centres. The government, NGOs, print and electronic media should create awareness of cadaver transplant programme for making more organs available for transplantation,” asserts Dr Rana.
Although nothing has changed in the dialysis business in the way dialysis patients approach treatment, if experts are to be believed things will change for better soon. “Dialysis is an ever – changing business. With the advent of new technology, better quality dialysers and more awareness of the disease, we are seeing a sea change in the market and patient expectations,” predicts Vijaykumar.
While service providers and equipment manufacturers see a sunrise industry at the cusp of revolution, new models of business are also vying for their share. “This is a growing market for us. Recent focus of the Indian government on dialysis in the budget and National Dialysis Programme would propel growth. When it comes to ESRD, India is growing at twice the world AGR and the graph is bound to go up north in the near future,” opines Verma.
And home healthcare providers see a new business opportunity. “Haemodialysis at home will be the game changer as its cost prohibitive at this time. Future is bright given a mix of CAPD, APD, HD and complete renal replacement therapy at home including post transplant care,” says Thukral.
Dialysis care centres are not far behind. “We see pockets of opportunity in the home haemodialysis (HHD) market in India where we are currently the only pan-India provider. Our HHD programme in India closely mirrors that of our parent company, wherein patients enjoy the benefits of a world-class dialysis in the comfort of their own home,” says Vijaykumar.
Another new trend in the segment is in the convective dialysis therapies, haemofiltration (HF) and haemodiafiltration (HDF). “Another modality that is gaining ground is online haemodiafiltration which greatly enhances clearances over haemodialysis and has shown improved outcomes as well,” says Vijaykumar.
Although the outcome for ESRD patients may not always be positive, dialysis service has improved and will continue to innovate and improve in future. “To be frank, the quality of dialysis has improved so much that we are now seeing patients live on dialysis for 20+ years, we are seeing far more employed patients, and overall far happier patients. A dialysis centre can be so homely nowadays that a patient can relax, watch TV, read a book and calmly avail of dialysis service, rather than 20 years ago when most patients were ‘barely alive’. Most people working in the centre needed to keep a bucket close to the patient because they used to vomit so often during therapy! Luckily now is a much better time to be a dialysis patient than before,” concludes Nayak.