India’s drugs and pharmaceuticals market is poised to become one of the top 10 in the world in value with total sales doubling to $26 billion by 2016, driven by an expected surge in health insurance, according to the latest market prognosis report by drug market researcher IMS Health.
Some experts said the prospects for a twofold sales jump in three years time appears to be unrealistic, pegging growth a more conservative 13-14% annual growth. IMS is pinning its hopes on what it sees as an across-the-board expansion.
“Increasing government funding, rising standards of care and an overall boom in the opportunities for access to necessary treatment are all coming together to shape a dynamic and sophisticated marketplace (for) healthcare in India,” said Chinmay Padhi, head payer (insurance), IMS, in a report titled Managing the Cost of Care: The Past and Future of Health Insurance in India.
The country’s drug market, worth Rs.74,117 crore ($12.35 billion) as of May 2013, is ranked 13th now, up from 15th in 2006 with sales of $6 billion.
The 2016 growth projection is despite the value erosion that is expected to take place with expanded price controls from this year and the negative growth projections of overseas companies due to what they call a weak patent regime. Recently announced government healthcare plans and aggressive market expansion moves will help. The World Bank had estimated dramatic growth in Indian health insurance by 2015, covering at least 50% of the population or about 630 million people.
According to Padhi, health insurance is one of the most important areas in India’s rapidly evolving healthcare market.
The World Bank had said in a 2012 report that healthcare expenditure was one of the leading causes of poverty in India. Around 63 million individuals or 11.9 million households had been pushed below the poverty line by healthcare expenditure in 2004.
“If India is to truly have a place on the world stage, an efficient health insurance system is absolutely mission-critical,” it said.
This process is already under way.
“Spurred in large part by pro-active government sponsored education, awareness and incentive programmes such as Rashtriya Swasthya Bima Yojana (RSBY) among others, the importance and value of the health insurance industry is on an upward trajectory,” Padhi said.
RSBY is a health insurance scheme for below poverty line families launched by the government of India.
Padhi’s report showed that as of 2010, at least 25% of the country’s population had some form of health insurance.
Health insurance business premiums are expected to reach Rs.30,000 crore by 2015 an increase of 302% from 2011, according to IMS. Health insurance coverage grew about 445% between 2004 and 2011, IMS said.
