One year of Ayushman Bharat: Medical devices industry in the country is likely to make the most among other segments of the healthcare market in the next three years
One year of Ayushman Bharat: Medical devices industry in the country is likely to make the most among other segments of the healthcare market in the next three years, suggests a whitepaper by SKP. The whitepaper titled ‘National Health Protection Scheme: Ayushman Bharat – Growing Opportunities in Affordable Healthcare’ has examined the impact of Ayushman Bharat- Pradhan Mantri Jan Aarogya Yojana (PMJAY) since its launch on September 23 last year.
The paper says that among the different segment of the healthcare industry, the medical equipment segment will emerge as the biggest beneficiary with additional revenues of USD 2 billion (approx Rs 14,351 crore at the present rate of exchange). Currently, the whitepaper notes that “Medical Devices industry in India is at a very nascent stage.” It is “significantly smaller” than other emerging and developing economies.
The per capita spend on medical devices in India is very low at USD 3, compared to USD 13 in China, and USD 340 in the USA. The size of the industry in India is just USD 7 billion for a population of around 1.35 billion. However, the paper suggests it is going to grow fast in next three years with a total anticipated additional service revenue of USD 2.0 billion. The medical consumables and disposables will constitute 20 per cent of this revenue.
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“With NHPS and the resultant expansion in the patient pool and bed capacity, this industry is expected to benefit substantially, particularly categories like equipment and instruments, and consumables and disposables,” the whitepaper said.
“With the shifting disease burden, some medical device product categories will witness a greater impact than others. These include diagnostic equipment (replacement or new purchases), syringes and needles, stents, etc. In its first 100 days, NHPS attracted a greater ratio of patients from therapies like cardiology and oncology, indicating a future trend,” it added.
Ayushman Bharat impact on the healthcare industry
Talking about the impact of Ayushman Bharat in on healthcare sector, SKP Business Consulting LLP told FE Online, “Since its launch, NPHS has covered about 100 million eligible families, offering insurance coverage of around USD 7000 per family, across 1,350 procedures across major therapies. The Healthcare Delivery sector would see the greatest initial impact, as hospital capacity needs to be built up to serve the large influx of new patients. This would naturally result in the increased demand for Medical Equipment and Devices industries due to the increased patient pool for secondary and tertiary care.”
The international consulting firm further said, “Effective implementation of the scheme could result in an anticipated CAGR of 30%-35% over the next three years in Medical Devices industry, across Medical Equipment and Furniture. We also expect demand for medicines to accelerate, though the impact on the pharma industry may be less dramatic.”
The whitepaper predicts that CAGR for Medical Equipment and Furniture is expected to be 33-45 per cent in next three years. For healthcare delivery, Medical Devices and Consumables and Pharmaceuticals, it maybe 15-17 per cent, 23-33 per cent and 5 to 16 per cent respectively.
In terms of volume, the Healthcare Delivery sector would be the largest beneficiary as hospital capacity needs to be built up significantly and rapidly to service the added influx of patients, said the paper. This will be “naturally” followed by Medical Equipment and devices industries.
The pharmaceutical industry is also expected to see a gradual acceleration of growth.
The Ayushman Bharat scheme aims to set up 1,50,000 health and wellness sectors across the country. The large-scale influx of patients to there centres my increase the demand for medicines.