REPORT
FEBRUARY, 2024
Confidential and proprietary © Praxian Global Pvt. Ltd.
 

The Indian diagnostics industry has emerged as a preferred play

within the expanding healthcare landscape, driven by attractive
margins and significant growth potential. With a market size of
~US$ 13B in FY23, the domestic diagnostics industry is
projected to grow at a CAGR of ~14% over the next five years.
This growth trajectory will be fueled by rising factors such as the
increasing prevalence of chronic diseases, growth in the
geriatric population, rising demand for preventive tests, and
government initiatives.

The diagnostics industry is marked by a high degree of

fragmentation, with standalone centers accounting for 46%,
followed by private hospital-based labs at 28% and national
Aryaman Tandon chains at only 6%. While this fragmentation presents challenges
Managing Partner & Cofounder in terms of capabilities and scalability, it also offers
Praxis Global Alliance
opportunities for consolidation and the emergence of new
business models.

Pathology contributes the majority share at ~58% with radiology

accounting for the remaining ~42%, covering tests such as CT
scans, MRI, nuclear imaging, and ultrasound scans.

This report analyzes the current state of the diagnostics market

and the emerging key trends in the market. These include a)
Digitalization and new-age technology, b) Consolidating and
driving strategic M&A / inorganic acquisitions, c) Operational
performance improvement and supply chain transformation, d)
Emergence of economies of scale, e) Emergence of new clinical
needs and development, f) Emergence of new business models,
g) Rising insurance penetration, h) Evolving patient needs, i)
Rising opportunity of the tier 2/3+ market, and j) Regulatory
and government impact.

Our endeavor with this report is to understand, qualify, and

quantify the impact that these trends will have on the Indian
diagnostics market in the short to medium term.

At Praxis Global Alliance, we trust that our report will offer

valuable insights into the key success factors driving growth in
the Indian diagnostics industry, empowering you to seize the
opportunities within this thriving sector.
 
Acronym Description

AMC Annual Maintenance Contract

CBC Complete Blood Count
CDSCO Central Drugs Standard Control Organization
cfDNA Cell-free DNA
CHC Community Health Center
CMC Comprehensive Maintenance Contract
CT Scan Computed Tomography Scan
CTC Circulating Tumor Cells
D2C Direct to Customer
EBITDA Earnings Before Interest, Taxes, Depreciation, and Amortization
GDP Gross Domestic Product
GH Government Hospital

GHE Government Healthcare Expenditure

GL Government Lab
GP General Physician
Industry related

IPD Inpatient Department

LIMS Laboratory Information Management Systems
LPH Large Private Hospital (>300 beds)
MPH Medium Private Hospital (100–300 beds)
MRI Magnetic Resonance Imaging
NABL National Accreditation Board for Testing and
Calibration Laboratories
NCD Non-Communicable Diseases
NCL National Chain Lab
NGS Next Generation Sequencing
NH Nursing Home
NPPA National Pharmaceutical Pricing Authority

OPD Outpatient Department

PBMJAY Ayushman Bharat Pradhan Mantri Jan Arogya Yojana

PHC Primary Healthcare Center

POC Point-Of-Care

PPP Public-Private Partnership

RCL Regional Chain Lab
 SAL Standalone Lab
SPH Small Private Hospital (<100 beds)
Sample 1 sample can be used to perform multiple tests
Industry related

Tier 1 All urban cities with more than 4M population

Tier 2 All urban cities with 1-4M population
Tier 3+ All urban cities with less than 1M population
IVD In Vitro Diagnostics
WHO World Health Organization

B Billion
CAGR Compounded Annual Growth Rate
CY Calendar Year (from 1st January to 31st December)
FY Fiscal Year (from 1st April to 31st March)
Units

INR Indian Rupee

K Thousand
M Million
US$ United States Dollar
 S. No. Description
Exhibit 1.1 Indian healthcare ecosystem
Exhibit 1.2 Indian healthcare market
Exhibit 1.3 Key growth drivers for diagnostics sector in India
Exhibit 1.4 Healthcare delivery penetration
Exhibit 1.5 Diagnostic test penetration
Exhibit 1.6 Distribution of hospital resources
Exhibit 1.7 Pathology lab landscape
Exhibit 1.8 Government healthcare expenditure as a % of GDP in India
Exhibit 1.9 GDP per capita, PPP–India
Exhibit 1.10 GDP per capita, PPP vs government expenditure on healthcare
Exhibit 1.11 Age profile in India
Exhibit 1.12 Cause of death in India
Exhibit 1.13 Impact of COVID-19 on diagnostics market in India

Exhibit 2.1 Indian diagnostics market in FY23

Exhibit 2.2 Segmentation across Indian diagnostics market in FY23
Exhibit 2.3 Indian diagnostics market (pathology and radiology)
Exhibit 2.4 Customer segmentation in diagnostics market
Exhibit 2.5 Emerging trends in diagnostics market

Exhibit 3.1 Pathology market in India in FY23

Exhibit 3.2 Pathology market in India from FY23-28
Exhibit 3.3 Growth drivers of pathology market
Exhibit 3.4 Pathology lab landscape in India
Exhibit 3.5 Pathology market segmentation in India
Exhibit 3.6 Types of tests in pathology
Exhibit 3.7 Global pathology test prices (US$)

Exhibit 4.1 Radiology market in India in FY23

Exhibit 4.2 Radiology market in India from FY23-28
Exhibit 4.3 Growth drivers for radiology market in India
Exhibit 4.4 Radiology lab landscape
Exhibit 4.5 Global radiology test prices (US$)

Exhibit 5.1 Diagnostics equipment market size in India

Exhibit 5.2 Growth drivers for diagnostics equipment market in India
Exhibit 5.3 Distribution of installed base of pathology and radiology equipment across city tiers
Exhibit 5.4 Proposition to customers by different competitor segment

Exhibit 5.5 Tailwinds for diagnostics equipment market

Exhibit 5.6 Headwinds for diagnostics equipment market

© Praxis Global Alliance 06

 S. No. Description
Exhibit 6.1 New waves of opportunities in diagnostics
Exhibit 6.2.1 POC and rapid tests market
Exhibit 6.2.2 Key drivers for adoption of POC and rapid tests
Exhibit 6.3.1 Key M&A deals
Exhibit 6.3.2 M&A as a driving growth for national chains in India
Exhibit 6.3.3 EBITDA multiple of major players
Exhibit 6.4 Operational efficiency in diagnostics chains
Exhibit 6.5.1 EBITDA margin and cost structure of labs
Exhibit 6.5.2 Unit economics of a pathology lab

Exhibit 6.5.3 Unit economics of a radiology lab

Exhibit 6.5.4 Drivers for economies of scale

Exhibit 6.6.1 Microfluidics POC test market in India

Exhibit 6.6.2 Liquid biopsy test market in India

Exhibit 6.6.3 Genomics testing market in India

Exhibit 6.6.4 Key growth drivers for genomics testing market in India

Exhibit 6.6.5 Key investment from PE / VC firms in genomics space

Exhibit 6.6.6 Distribution of pathology test by type

Exhibit 6.6.7 Key drivers for preventive test in India

Exhibit 6.6.8 Opportunity in health management and wellness segments

Exhibit 6.7 Innovative business models in diagnostics value chain

Exhibit 6.8.1 Health insurance coverage

Exhibit 6.8.2 Individuals covered by health insurance by scheme type

Exhibit 6.9.1 Reasons for customers preferring home collection

Exhibit 6.9.2 Factors influencing customers choice for online healthcare platforms

Exhibit 6.10 Distribution of diagnostics labs in India

Exhibit 6.11.1 Number of government labs and hospital labs in India from CY23-27

Exhibit 6.11.2 PPP of national and regional chain labs with different state governments

Exhibit 6.11.3 Current manufacturing capability and future expansion plans for MNCs in India

Exhibit 6.11.4 Impact of Digital Personal Data Protection Act on diagnostic companies

© Praxis Global Alliance 07


 1.0 INDIAN HEALTHCARE LANDSCAPE
Exhibit 1.1

Indian healthcare ecosystem is a ~US$ 216B market in FY23; diagnostics forms ~6% of the
overall ecosystem
Indian healthcare ecosystem
(US$ B, FY23)

Total ~US$ 216B

Healthcare delivery
expected to grow
at 18% 18% 14% 12% 15% 18% 16%

Market size
US$ B 91 25 13 55 11 12 9

Top 15 hospital chains, 6% Patient

CHC, 10% aids, 9%
API and intermediates, SAHI,
Home healthcare, 11% 27%
PHC, 12% 29%
Implant
Excludes top 15 Radiology, and stent,
hospital chains
Health-
District 42% 22% tech,
Large size hospitals, 21% hospital, 39%
12% Private
general
insurer,
Sub-District
31%
hospital, Equipment
Small size hospitals + Nursing 22% and
home/clinics, 22% instruments,
31%

Pathology, Formulations, 71% Health

Consumables and
58% and
Medical fitness,
disposables, 61%
institutions, 38%
Medium size hospitals, 41%
45%
Public
general
insurer,
42%

Financing
Public hospitals Pharmaceuticals and ecosystem
(12%) Life Sciences (26%) (6%)
Private hospitals Diagnostics Others
(42%) Medical devices
(6%) (4%)
and supplies (5%)

Hospital type Small + NH Medium Large Large chains

xx% Growth CAGR FY23-28P
Bed size <100 100-300 >300 Top 15

Note(s): SAHI: Standalone Health Insurers focus solely on health insurance products – Aditya Birla Health Insurance, Care Health Insurance, ManipalCigna Health
Insurance, Niva Bupa Health Insurance, Star Health and Allied Insurance; the market for HealthTech includes telemedicine, personal health management products
and services, remote diagnostics devices and healthcare IT; the market for health and fitness includes both the fitness trackers and health and wellness coaching
segments

© Praxis Global Alliance 09

 1.1 Overview
The Indian healthcare sector stands at the cusp of a transformative leap, with it being a formidable US$ 216B market as of FY23. This
sector, characterized by its dynamic growth potential and multifaceted components, is projected to grow to an estimated US$ 456B by
FY28, marking a CAGR of 16%. Within this vibrant ecosystem, diagnostics will play a pivotal role, representing ~6% of the market, and is
anticipated to grow to a US$ 25B industry by FY28.

1.2 Growth projections and market dynamics

Diagnostics, in particular, is expected to grow at a CAGR of 14%, reaching US$ 25B by FY28. This growth is fuelled by an increase in life
expectancy, a growing middle class, and higher penetration of govt. insurance schemes. Additionally, the demand-supply gap indicates a
need for approximately 3M more beds to achieve the target of 3 beds per 1,000 people by CY25, suggesting substantial room for
expansion.

Exhibit 1.2

Diagnostics is expected to grow at a CAGR of 14% to reach US$ 25B by FY28

Indian healthcare market

(US$ B, FY23-28P)
CAGR
FY23-28P

456 16%
18 16%
22 15%
27 18%
25 14%

98 12%

216
Diagnostics is ~6% 11 9
of the Indian 12
healthcare market 13
55
266 18%

116

FY23 FY28P

Healthcare delivery (Hospitals) Pharmaceuticals and Life Sciences

Diagnostics Financing ecosystem
Medical devices and supplies Others

Note(s): Others includes health and fitness and HealthTech

© Praxis Global Alliance 10

 1.3 Factors driving growth of diagnostics in India
• The aging population, susceptible to chronic diseases, fuels demand for diagnostic services, indicating a growing market for
advanced tests

• NCDs persist as India's primary cause of death, propelling the demand for specialized diagnostic tests for early detection and
management, contributing significantly to market growth

• The expanding middle class, with rising disposable incomes, increases affordability for advanced diagnostic tests. This demographic's
awareness of preventive healthcare intensifies the demand for diagnostic services

• Increasing insurance penetration alleviates financial burdens for patients seeking diagnostic tests, boosting utilization rates.
Government initiatives like AB-PMJAY further extend health insurance coverage, expanding the patient pool

• Technological advancements reshape the diagnostics landscape, enhancing convenience and accessibility. Innovations like
telemedicine and home-based diagnostics broaden the reach of diagnostic services, particularly to remote or mobility-limited
patients

• Doctors are prescribing more diagnostics tests for earlier disease detection, improved accuracy, and potential for better treatment
options. Awareness is growing among patients, leading to increase in self preventive tests

Exhibit 1.3

Key growth drivers for diagnostics sector in India

• Geriatric population (60 years+) to surge from 10% to 13% by CY31, raising chronic disease risk and fueling demand
for diagnostics

• Shift in disease burden with share of NCDs in deaths to increase from ~66% in CY21 to ~74% by CY30

• Growing middle class (~73M households to move into middle-class category in next 10 years) and rising incomes

• Increasing private insurance penetration (increased to ~14% of the population) and favorable government schemes
such as AB-PMJAY

• Emergence of disruptive HealthTech players such as home healthcare, and remote diagnostic platforms, leveraging
technology to improve healthcare coverage and accessibility

1.4 Healthcare penetration and comparison

India's healthcare infrastructure, when compared to established markets, shows significant underpenetration. For instance, the number of
hospital beds per 1,000 population in India is well below the WHO target of 3, and diagnostic test penetration per capita is also
considerably lower than in other leading countries, presenting opportunities for development.

© Praxis Global Alliance 11

 Exhibit 1.4

While established markets boast robust healthcare delivery, India remains a relatively nascent landscape

Healthcare delivery penetration

(# hospital beds per ‘000 population, CY21)

6 WHO target
is 3

3 3
3 2 2 2

1
1

US Australia Canada Germany UK France Saudi Brazil India Nigeria

Arabia

Note(s): Beds per 1,000 – countries’ data as of CY21 except Saudi Arabia (CY19) and India (CY23)

Exhibit 1.5

Compared to other leading countries, diagnostics is significantly underpenetrated in India

Diagnostics test penetration

(# tests per year per capita, FY23)
Here, diagnostic tests refer
to the number of samples,
1 sample can be used to
perform multiple tests

21
19 19
17

11 12
10
9

2
1

US Australia Canada Germany UK France Saudi Brazil India Nigeria

Arabia

Diagnostics market
99 6 13 21 18 11 2 13 13 1
(US$ B, FY23)

© Praxis Global Alliance 12

 1.5 Fragmented supply of healthcare facilities
The supply of healthcare facilities in India is largely fragmented, with about 16% of healthcare facilities accounting for 42% of the bed
capacity and 46% of the healthcare delivery market. The pathology lab landscape also reflects a similar pattern of concentration, with a
small percentage of labs conducting a significant portion of tests and generating a substantial share of the market revenue.

Exhibit 1.6

~16% of the healthcare facilities account for ~42% of the bed capacity and ~46% of the healthcare
delivery market

Distribution of hospital resources

(% , FY23)
Realization
per test per
year (US$ K)

55K 2,601K US$ 106B*

15%
23% 29.3
1%
33%
12%

23% 104.3
9%

30%
72% 35% 48.0

28%
19% 26.9

# of hospitals # of beds Healthcare delivery

market
organized players
SPH MPH LPH GH

% of large/
organized players 16% 42% 46%

Note(s): *Includes medical institutions, sub-district hospital, district hospital, CHC and PHC; home healthcare is not included in healthcare delivery market

© Praxis Global Alliance 13

 Exhibit 1.7

~4% of the pathology labs account for ~15% of the tests conducted and ~25% of the pathology market

Pathology lab landscape

(%, CY23) Realization
per test per year
(US$ K)

132K 11.6B US$ 7.5B

14% 16% 11% 0.5*

0.5%
4% 10% 1.7
1% 19%
2% 27%
35% 0.8
4%
7% 1.0
6%
63% 9% 0.9
42%
28%
0.4

# of labs # of tests Pathology market

SAL RCL NCL SPH + MPH LPH GL + GH

% of RCL, NCL
4% 15% 25%
and LPH

Note(s): GL and GH offer tests at subsidized rates, leading to low realization rates

1.6 Government Healthcare Expenditure

GHE as a percentage of GDP in India is lower compared to other countries. However, it is on an upward trajectory, with expectations
to reach around 3.2% of GDP by FY33. This increase in GHE is anticipated to correlate with a rise in GDP per capita, indicating a
positive outlook for government investment in healthcare.

Exhibit 1.8

Government healthcare expenditure as a % of GDP in India is lower

Government healthcare expenditure as a % of GDP

(%, CY22)
14.1%

9.3% 9.8%
8.0%
7.0%

2.9%
2.1% 1.8%
0.4% 1.1%

US Australia Canada UK Japan Mexico India Myanmar Nepal

Bangladesh
Note(s): Data on government healthcare expenditure as a % of GDP of Bangladesh and Myanmar are of FY21 and that of India is for FY23

© Praxis Global Alliance 14

 Exhibit 1.9

India’s GHE as a % of GDP is rising steadily and is expected to reach ~3.2% by FY33

GDP per capita, PPP-India

(US$, FY17-33P)
18,669 6.0%

5.0%

3.2%*
9,180
8,400
6,900 6,520 7,360
6,112 6,590 2.0%

2.2% 2.1%
1.6%
1.4% 1.4% 1.4% 1.4%
1.0%

0.0%

FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY33P

GDP per capita, PPP Base case (GHE, % GDP)

Note(s): Government health spent as percentage of GDP is without PPP conversion

Exhibit 1.10

GDP per capita, PPP and government expenditure on healthcare show a significant correlation

GDP per capita, PPP vs. Government expenditure on healthcare

(CY21)

16.0
United States
14.0
Government spending as % of GDP

12.0 India expected to achieve

govt. healthcare spend of France
~US$ 220B by CY33 UK Germany
10.0 Japan
Canada Netherlands
Austria Switzerland
8.0 Italy
China Spain Australia
Korea,
6.0 Rep.
India Israel
(in CY33) Poland
4.0
Turkiye
Mexico
2.0
India

0.0
5,000 25,000 45,000 65,000 85,000
GDP per capita, PPP (US$)

© Praxis Global Alliance 15

 1.7 Demographic shifts and disease burden
India is experiencing demographic shifts with an aging population, where the share of individuals above 60 years of age is expected to
reach about 13% by CY31. Concurrently, the burden of non-communicable diseases is rising, projected to account for ~74% of deaths by
CY30. These trends underscore the growing demand for healthcare services

Exhibit 1.11

India has aging population; Share of population above 60 years of age is expected to
reach ~13% by CY31

Age profile in India

(%, CY91–31P)

7% 8% 9% 10% 13%

29% 30% 41%

33%
37%
37
32
26
24
22
58% 53%
62% 46%
64%

CY91 CY01 CY11 CY21 CY31P

0-29 years 30-59 years 60+ years Median age

Exhibit 1.12

Share of non-communicable diseases in causes of death is expected to increase from ~66% in

CY21 to ~74% by CY30

Causes of death in India

(%, CY01–30P)

Injuries and others

11% 11% 12% 12%
• Damage caused to the body by external factors or
15% accidents
23%
33% • E.g.- Fracture, ligament tear, bruise, contusions, etc.
44%
Communicable diseases
• Caused by infectious agents and can transmit to others
74% via direct or indirect contact
66% • E.g.- Influenza, tuberculosis, COVID 19, chickenpox, etc.

45% 55%
Non-communicable diseases
• Caused by non-infectious agents and do not transmit
from person to person
CY01 CY11 CY21 CY30P
• E.g.- Cardiovascular diseases, diabetes, cancer,
Non-communicable diseases Communicable diseases asthma, etc.
Injuries and others

© Praxis Global Alliance 16

 1.8 Long-term impacts of COVID-19 pandemic
The COVID-19 pandemic has reshaped the healthcare market, emphasizing home collection services, the proliferation of molecular testing,
and the adoption of digital solutions. The pandemic has accelerated the growth of home collection revenues and the number of accredited
molecular testing labs. It has also spurred the adoption of tele-diagnostics and online booking systems, which have persisted post-pandemic.

Exhibit 1.13

COVID-19 has also shaped the market in multiple ways – emphasis on home collection, rise of molecular
testing for treatment and adoption of digital solutions

7% 8% 9% 10% 13%
Impact of COVID-19

Adoption of digital
Proliferation of Usage of tele-diagnostics
Trust on home collection solutions for improving
molecular testing solutions
customer experience

• Home collection revenues • Astronomical growth in the • Usage of apps (from • Multiple players have
(excluding COVID business) number of NABL accredited aggregators as well as implemented technology to
grew by 25–30% for most molecular testing labs 40 diagnostics chains) for allow their technicians and
of the national chains in in March CY20 to 1,690 booking tests increased pathologists to read
FY21 in November CY21 multifold and is likely to images remotely to drive
increase as customers would better utilization of expert
• The additional capacity will continue to book tests resources
remain in place as the online post COVID
pandemic subsides, which
could potentially find multiple • Several diagnostics chain
application for the RT-PCR players have improved their
assay as the dominant online presence and invested
method for diagnosing viral in automating and expand the
infections in India customer support team

1.9 Conclusion
The Indian healthcare sector is poised for significant growth, driven by demographic changes, technological advancements, and increasing
government expenditure. While challenges such as under-penetration and fragmentation exist, the market dynamics indicate a strong
potential for development and expansion. The strategic focus on improving healthcare infrastructure, coupled with the adoption of digital
health solutions, positions India to meet the rising demand for healthcare services in the coming years.

© Praxis Global Alliance 17


 2.0 DIAGNOSTICS SECTOR IN INDIA
2.1 Overview
The diagnostics sector plays a crucial role in healthcare by providing tools and services to identify, monitor, and manage various medical
conditions. The diagnostics sector is a dynamic and essential component of modern healthcare, playing a pivotal role in disease preven-
tion, early detection, and effective management.
The Indian diagnostics market is ~US$13B, as of FY23.
The diagnostics sector can be broadly divided into two main segments: pathology and radiology. Each segment focuses on different
aspects of diagnostic testing and plays a crucial role in identifying and diagnosing various medical conditions, as illustrated in Exhibit 2.1

2.1.1 Introduction to pathology

The pathology market is a crucial component of the diagnostics industry that focuses on the study and diagnosis of diseases through the
examination of tissues, cells, and body fluids. The pathology market is a US$ 7.5B market and makes up 58% of the diagnostics market.
Exhibit 2.1 illustrates that clinical chemistry has the highest market share in the pathology market.
Other tests include hematology, immunoassay, molecular pathology tests, histopathology, urinalysis, and surgical pathology.

2.1.2 Introduction to radiology

The radiology sector is a critical component of diagnostics that involves the use of medical imaging techniques to diagnose and treat
diseases and injuries. Radiology encompasses a variety of imaging modalities that allow healthcare professionals to visualize the internal
structures of the body. The market for radiology is a US$ 5.4B market and makes up 42% of the diagnostics market.
The radiology market can be split into Soft Radiology (X-ray and Ultrasound) and Advanced Radiology (CT-Scan, MRI, Nuclear Imaging,
and Interventional Radiology).

© Praxis Global Alliance 19

 Exhibit 2.1

Indian diagnostics is a ~US$ 13B market in FY23 with pathology forming ~60% of the market

US$
12.9B Diagnostics market
(US$ B, FY23)
US$ 7.5B US$ 5.4B
(58%) (42%)
Pathology Radiology

US$ 2.6B US$ 1.7B US$ 1.5B US$ 1.7B US$ 3.0B US$ 2.4B
(35%) (23%) (20%) (22%) (55%) (45%)

Clinical Advanced
Immunology Hematology Others Soft radiology
chemistry radiology

• These are tests on • These tests involve • These tests • Includes X-ray CT-scan
bodily fluids that the study of the analyze blood specialized • Imaging tests • Imaging
measure chemicals reactions and cells and tests: taking pictures of technique using
in the blood to components blood-clotting bones and soft X-rays and
- Molecular
determine health involved in the mechanisms tissues. computer
pathology
status body’s immune Applications processing
response - Histopathology include
cardiovascular, MRI
• They are often - Urinalysis
used to monitor respiratory, • Magnetic field
- Surgical dental, and and computer
chronic diseases
pathology mammography -generated
like diabetes and
heart disease radio waves
Ultrasound
used for
• Imaging tests creating images
using sound
waves for making Nuclear
pictures of organs, imaging
tissues, etc. inside • Tracers
the body administered for
detecting
radiation from
body parts

Interventional
• Medical
imaging guiding
minimally
invasive surgical
procedures

CAGR 13-14% 16-17%

10-11% ~15% 11-12% ~14%
FY17-23

© Praxis Global Alliance 20

 2.2 Segmentation of diagnostics market
Exhibit 2.2 illustrates the various forms in which the diagnostics market can be split. Prescriptive diagnostic services make up 90% of the
diagnostics sector, whereas healthcare solutions focusing on wellness and preventive diagnostic solutions form 10% of the market. More
than 98% of the diagnostics market is offline, whereas only 2% of the market is online.
Outpatient department diagnostic services make up 57% of the market, and inpatient department diagnostics make up the remaining 43%.

Exhibit 2.2

Overall diagnostics market is largely unorganized

India diagnostics market

(%, FY23)

Total US$ 7.5B US$ 12.9B US$ 5.4B US$ 12.9B US$ 12.9B US$ 12.9B US$ 7.4B
(OPD)
Large pvt.
Wellness hospitals, 5% Online, 2%
and preventive, National Also, includes govt.
Others, 10% chains, 6% labs (PHCs,
22% wellness centers)
Government
Advanced hospitals, 9% IPD,
Radiology, radiology, 43%
42% 45% Regional
chains, 11%
Hematology,
20%
Small and
Prescriptive, Medium
90% pvt.hospitals
23% Offline,
Immunology, 98%
23%
Soft
Pathology, radiology,
OPD,
58% 55% Standalone
57%
centers, 46%
Clinical
chemistry,
35%

Test Institution type IPD vs OPD Online vs

segment Offline

Pathology Radiology Prescriptive

test split test split vs Preventive

2.3 Growth of diagnostics sector in India

The diagnostics market has consistently exhibited a year-on-year growth rate of 14-15%, except in the post-pandemic period, as
illustrated in Exhibit 2.3. This fall in growth rate is attributed to a decrease in demand for diagnostic procedures during the COVID-19
pandemic. The market is projected to grow at a CAGR of 14% in the next 5 years to reach ~US$ 25B by FY28.

© Praxis Global Alliance 21

 Exhibit 2.3

The market is expected to grow at a CAGR of ~14% to reach ~US$ 25B by FY28

India diagnostics market (pathology and radiology)

(US$ B, FY17–28P)

CAGR
FY23-28P

24.9

CAGR 21.8
• Diagnostic market grew by ~15%
(FY22-28P)
from FY17-FY20 (YoY) 14%
19.1 42% 14%
• With drop in demand for several
diagnostic procedures during
COVID-19, the growth came down 16.7 42%
to ~5% in FY21
14.7 42%
12.9
CAGR 42%
11.3
(FY17-20) 42%
10.2
15% 9.7 42%
8.4 44%
7.3
6.4 43% 45% 14%
43% 58%
42% 58%
41% 58%
58%
58%
58%
57% 55% 56%
58% 57%
59%

FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24P FY25P FY26P FY27P FY28P

Pathology Radiology

2.4 Diagnostic services providers

The diagnostics market comprises 3 types of providers–labs, private hospitals, and government (labs/hospitals)

2.4.1 Labs
Standalone lab centers, independent diagnostic centers operating on a small scale and usually owned and operated by a single entity,
occupy the largest share of the market, as illustrated in Exhibit 2.2. They’re made up of unorganized players.
Regional and national diagnostic chain labs are diagnostic centers that have multiple branches across a region or nationwide. They make
up 17% of the market.

2.4.2 Private hospitals

Small, medium and large private hospitals make up 28% of the market. The category includes both unorganized players and
well-established industry giants.

© Praxis Global Alliance 22

 2.4.3 Government labs and hospitals
Government labs are managed by government staff or under a PPP model to provide basic diagnostic services, often free of charge or at a
nominal cost. Government hospitals provide a wide range of diagnostic services, often catering to a large patient population.

Exhibit 2.4

The overall market is largely fragmented with multiple types of providers

Customer
segments Description Examples

• Independent diagnostic centers operating on a small scale, usually

Standalone owned and operated by a single entity
Unorganized
labs • Provide a range of diagnostic services, often specializing in certain
players
areas
• They may collaborate with local healthcare providers for sample
collection and report delivery
Labs

Regional • These are diagnostic centers that have multiple branches across a
chain labs region or nationwide
• They operate on a hub-and-spoke model, where samples
National collected at various centers (spokes) are sent to a central lab (hub) for
processing
chain labs
• Regional reference and national labs are highly automated
• They also offer home collection services for patient convenience

• These are secondary care hospitals with less than 300 beds
Small and • They have in-house labs to provide basic diagnostic services for
medium their patients
Unorganized
pvt. • May also have facilities for more complex diagnostics, depending players
on the specialties offered by the hospital
Private hospitals

hospitals
• More complex diagnostics might be referred to larger hospitals or
specialized diagnostic centers

• These are tertiary care hospitals with more than 300 beds
Large pvt. • Their labs are often comprehensive diagnostic centers, offering
hospitals a wide range of tests and specialized services
• They may also engage in research and development of new
diagnostic techniques

• Government labs are located in PHCs and wellness centers,

managed by government staff or under a Public-Private
Government

Labs/
Partnership (PPP) model to provide basic diagnostic services,
hospitals
often free of charge or at a nominal cost
• Govt. hospitals provide a wide range of diagnostic services, often
© Praxis Global Alliance |
catering to a large patient population

2.5 Emerging trends

The diagnostics sector is witnessing transformational shifts. The future of the diagnostics sector holds several promising trends and
advancements that are expected to transform the way diseases are diagnosed and managed.

© Praxis Global Alliance 23

 2.5.1 Evolving patient behaviour
• Convenience: Patients are increasingly booking tests online and having them collected at home. This is due to the rise of online
booking platforms and the convenience of not having to travel to a clinic or hospital
• Reliability: Patients are more likely to choose branded service providers, as they perceive them to be more reliable and trustworthy
• Focus on preventive care: There is a growing trend towards preventive care, as people are becoming more aware of the impor-
tance of staying healthy. This is leading to a rise in the use of self-tests and wellness tests
• Improving experience: Healthcare providers are focusing on improving the patient experience, as they know that this is a key
factor in attracting and retaining patients. This includes offering attractive economics and personalized care

2.5.2 Shifting clinical needs and test types

• Personalized medicine: Genetic testing allows for precise treatments based on individual patient biology, improving therapeutic
outcomes
• POC tests: Rapid diagnosis at the point of care enables faster treatment decisions, shortening recovery time and potentially
improving long-term outcomes
• Early cancer screening: Early cancer screening has been instrumental in improving outcomes, with a substantial portion of cases
being diagnosed at early stages
• Functional medicine: Holistic approach emphasizes identifying the root cause of disease rather than solely treating symptoms,
offering potentially deeper solutions for chronic conditions
• Specialized tests: Precision medicine and molecular diagnostics yield highly specific insights into a patient's condition, aiding in
targeted treatment planning

2.5.3 Rising competition

• New market entrants: Pharmaceutical companies, hospitals, telehealth providers, and online aggregators are entering the diagnos-
tics market, driving innovation, and competitive pricing
• Public investment: The government is investing significantly in strengthening diagnostics capabilities in the public health network. This
is making diagnostics more accessible and affordable for people in all parts of the country

2.5.4 Emerging business models

• Asset light model: Enhancing diagnostic services in tier 2/3+ cities through cost-effective infrastructure and access to advanced
imaging technologies
• Remote diagnostics: Remote diagnostics involves evaluating a patient's health and providing diagnostic testing from a location
outside the typical clinical setting. This can include a patient's home, a local CHC, or even a mobile clinic
• Specialization across components of the diagnostic service: One entity may focus on customer-facing elements, another on
sample collection and logistics, and a third on lab processing
• Payors and financing: Rising health insurance penetration
• Corporate wellness: Corporates are increasingly offering curative and wellness services to their employees. This is leading to a
growing demand for diagnostics services

2.5.5 Improving supply chain efficiency

• Visibility: Delivery management software is increasing the visibility of the diagnostics supply chain, which is improving patient
satisfaction
• Reliability and responsibility of supply chain: Automation of the supply chain is improving the reliability of diagnostics
services and reducing turnaround times

© Praxis Global Alliance 24

2.5.6 Fostering technology driven growth
• Focus on improving customer experience: Diagnostics companies are using digital tools to improve the customer experience,
such as online booking and appointment scheduling
• Use of AI systems: AI systems are being used in image processing across radiology and pathology, which is improving the
accuracy and efficiency of diagnoses
• Robust IT system: Diagnostics companies are investing in robust IT systems to streamline their operations and improve efficiency

Exhibit 2.5

Emerging trends: Overall, the diagnostics industry is witnessing transformational shifts

Trends Brief description

• Convenience: Preference for online booking of tests and home collection

Evolving • Reliability: Preference of customers towards branded service providers
patient
behaviour • Focus on preventive care: Rise in the proportion of self-tests, and wellness tests
• Improving experience: Attractive economics as patient experience is the focus

• Personalized medicine: Incorporation of genomic testing in certain clinical areas (oncology,

pre-natal, etc.)
• POC tests for an earlier start of the right treatment
Shifting clinical
needs and test • Cancer screening: Less than 20% cases are diagnosed before stage 3, have high survival rate
types • Functional medicine: Focuses on the root cause of the disease to reduce disease activity rather than
acting only on the symptom
• Specialized tests: Advancements and wider adoption of specialized tests like precision medicine,

• Entry of players from allied industries: Pharmaceuticals, hospitals, telehealth service providers,
Rising online players aggregating and setting up own labs
competition • Public investment: Government investing significantly in strengthening diagnostics capabilities in
public health network

• Asset-light model: Asset-light radiology models are swiftly rising, reducing costs and expanding
access to advanced imaging
Emerging • Remote diagnostics: Incorporate telemedicine services
business
models • Payors and financing: Rising health insurance penetration
• Corporate wellness: Corporates increasingly becoming benevolent, offering curative as well as
wellness services

• Visibility: Visibility has increased due to delivery management software (Real-time visibility of
Improving patient samples)
supply chain
efficiency • Reliability and responsibility of supply chain: With automation of the supply chain, reliability
has increased, and TAT has decreased

• Digital patient journeys: Enhancing patient experience through digitalization, improving

Fostering accessibility and convenience
technology • AI in radiology and pathology: Enhancing image analysis for better diagnosis
driven growth
• Robust IT system for fulfillment layer: Seamless and efficient experience for patients and
healthcare providers, ensuring smooth sample collection, logistics, and tracking

© Praxis Global Alliance 25




 3.0 PATHOLOGY
The increasing prevalence of chronic diseases, infections, and lifestyle-related health problems highlights the importance of precise and
prompt diagnosis. Consequently, there's been a surge in the demand for pathology services throughout India. Pathology encompasses a
wide range of disciplines including clinical chemistry, hematology, immunology, molecular pathology, histopathology, and more. With
growing awareness about healthcare services among the populace, the necessity for these diagnostic services only continues to grow.

3.1 Split of pathology market in India

Exhibit 3.1

Pathology is a ~US$ 7.5B market in FY23; clinical chemistry (35%) has the largest share in pathology,
followed by immunology (23%) and hematology (20%)

US$
7.5B Pathology
(US$ B, FY23)

US$ 2.6B US$ 1.7B US$ 1.5B US$ 1.7B

(35%) (23%) (20%) (22%)

Clinical chemistry Immunology Hematology Others

• Electrolytes • Antibody tests • Complete blood • Molecular

- Sodium (Serology) count (CBC) pathology (US$ 1B)
- Potassium - HIV antibody and - White blood cell - Genomics
• Liver function antigen tests count (WBC) - RNA / DNA
- Total protein - Rheumatoid Factor - Red blood cell sequencing
(RF) test count (RBC) - Bio markers
- Bilirubin
• Allergy tests - Haemoglobin • Histopathology
- Alkaline
phosphatase - Skin prick tests - Platelet count (US$ 0.6B)
• Renal function - Specific IgE (sIgE) - Hematocrit - Immunohistochemi
Pathology tests by modality

tests • Reticulocyte count stry (IHC)

- Creatinine
• Infectious disease • Peripheral blood - In Situ
- Blood urea
tests smear (PBS) Hybridization
nitrogen
- PCR tests • Coagulation Tests (ISH), including
- Glucose Fluorescence In
• Viral load tests - Prothrombin Time
• Lipid panel Situ Hybridization
• Immunophenotyping (PT)
- HDL cholesterol (FISH)
• Quantitative - International
- LDL cholesterol • Urinalysis (US$
immunoglobulins Normalized Ratio
• Blood disorders 0.1B)
(IgG, IgM, IgA, IgE) (INR)
- Iron • Surgical pathology
• Autoantibody tests • Erythrocyte
(US$ 0.1B)
• Cardiac markers - Anti-Sm, Anti-RNP, Sedimentation Rate
- CK-MB Anti-SSA/Ro, and (ESR)
- hs-cTn Anti-SSB/La
• Cytokine panels
• Thyroid panel
- T3, T4, TSH
• Vitamins and
minerals
- Vitamin B12, D

Note(s): Commonly undertaken tests have been listed; list of tests is not exhaustive

© Praxis Global Alliance 27

Clinical chemistry, immunology, and hematology collectively dominate about 80% of the pathology market, which is valued at ~US$ 7.5B
at the overall level. Clinical chemistry focuses on analyzing bodily fluids like blood and urine to assess various health aspects and
diagnose diseases. It encompasses tests measuring electrolytes, enzymes, lipids, proteins, and glucose levels. These tests aid in evaluating
organ function, metabolic processes, and detecting conditions such as diabetes, kidney disorders, liver diseases, and metabolic disorders.
Immunology, on the other hand, delves into the study of the immune system, responsible for defending the body against infections, diseas-
es, and foreign substances. Immunology tests gauge the immune system's response to pathogens, allergens, and autoimmune disorders.
Common tests include antibody tests, allergy tests, autoimmune tests, and infectious disease tests, aiding in diagnosing conditions like
HIV/AIDS, autoimmune diseases, allergies, and immunodeficiency disorders.
Hematology tests, meanwhile, focus on assessing the cellular components of blood, including red blood cells, white blood cells, and
platelets. Common tests such as CBC measure red blood cell count, white blood cell count, haemoglobin level, platelet count, and
hematocrit level, offering crucial insights into various blood-related disorders.
Other modalities in pathology include molecular biology, histopathology, urinalysis, and surgical pathology. Molecular biology provides
insights into genetic predispositions and personalized treatment approaches. Histopathology examines tissue samples to diagnose
diseases, particularly cancer. Urinalysis detects abnormalities indicative of various health conditions. Surgical pathology analyzes tissue
specimens to guide treatment decisions and understand disease progression. These modalities complement each other for comprehensive
diagnostics and improved patient care.

3.2 Pathology market

The pathology market is projected to reach ~US$ 14.4B by FY28, with a CAGR of around 14%. Notably, molecular pathology and
histopathology are anticipated to experience the highest CAGRs at 16% and 17%, respectively, while clinical chemistry is expected to
grow at a rate of 12%.

Exhibit 3.2

The market is expected to grow at a CAGR of ~14% to exceed US$ 14B by FY28

Pathology market
(US$ B, FY23-28P)
CAGR
FY23-28P

14.4 14%
15%
0.2 0.1 15%
1.3 17%
2.0 16%

7.5 2.9 14%

0.1 0.1
0.6
1.0 3.4 15%
1.5

1.7
4.5 12%
2.6

FY23 FY28P

Clinical chemistry Immunology Hematology

Molecular pathology Histopathology Urinalysis

Surgical pathology

© Praxis Global Alliance 28

 3.3 Growth drivers in the pathology market
Several factors are driving this growth, including the rise in chronic diseases, the increase in the geriatric population, and the growing
demand for preventive tests. The prevalence of chronic diseases emphasizes the critical need for accurate diagnosis and treatment planning,
while the uptick in infectious diseases heightens the demand for precise pathology services.
Moreover, the expansion of the geriatric population, prone to age-related illnesses, necessitates routine diagnostics. Specialized pathology
services and enhanced geriatric facilities are becoming indispensable to addressing the demands of the senior population. By tailoring
diagnostic support to the specific healthcare needs of older adults, these services significantly contribute to improving health outcomes and
quality of life among seniors.
The growing awareness of preventive healthcare, coupled with government initiatives like AB-PMJAY and Pradhan Mantri Swasthya
Suraksha Yojana aimed at enhancing healthcare facilities, further propels the demand for preventive tests. This proactive approach encour-
ages individuals to prioritize preventive measures and undergo regular health screenings for the early detection and management of
potential health issues.

Exhibit 3.3

Rising chronic diseases, geriatric population growth and rising demand for preventive tests are
key drivers for growth

Growth driver Brief description

Rising chronic • Need for accurate diagnosis and treatment planning is being driven by the rise in chronic diseases
diseases • Growing infectious diseases increase the demand for precise pathology services

• Aging demographic elevates vulnerability to age-related illnesses, driving demand for routine
Geriatric
diagnostics
population
growth • Specialized pathology services and expanded geriatric care facilities are required to meet the
demand of the senior population

Increasing • Growing awareness about the importance of preventive healthcare and regular health check-ups
demand for is encouraging more individuals
preventive tests

Government • Government initiatives such as AB-PMJAY, Pradhan Mantri Swasthya Suraksha Yojana etc.
initiatives to improve healthcare facilities in cities

3.4 Pathology lab landscape

Standalone labs account for over 60% of the total labs in India, yet they generate the lowest average revenue per lab per year, around
US$ 25K. In contrast, labs within large private hospitals, comprising approximately 1% of the total, exhibit the highest average revenue
per lab per year, ~US$ 1,330K.
Moving forward, large private hospitals, national, and regional laboratory chains are anticipated to experience the highest CAGRs.
Conversely, standalone labs are projected to have the lowest CAGR, ranging from 11% to 12%.

© Praxis Global Alliance 29

 Exhibit 3.4

Pathology lab landscape in India is very fragmented with a total estimated of ~132K labs, more
than 60% are standalone labs

Labs Private hospitals Government

Total
Standalone Regional National Small/med pvt. Large pvt. Labs/
labs chain chain hospitals

• Single unit • Branded centers having • Labs in • Labs in • Labs in public

diagnostics footprint at regional/ private private hospitals
centers multi-regional/national level secondary tertiary care (includes
• Operate on care hospitals Defence,
a small scale • Usually operate through hub- hospitals (Up (More than Railways, ESIC
Description
and-spoke of collection centers to 300 beds) 300 beds) hospitals)
and home collection model • Owned or a • Owned or a • Managed by
shop-in-shop shop-in-shop govt. staff or
model model under PPP
model
• Includes PHCs

# labs ~84.0K ~3.0K ~1.3K ~25.7K ~0.6K ~17.9K

~132K
(#, % share) (~63%) (~2%) (~1%) (~19%) (~1%) (~14%)

Average
~160 ~750 ~950 ~340 ~2,100 ~290
tests
(70–1,500) (140–3,600) (670–3,700) (110–1,300) (1,600–4,500) (100–3,300)
processed/
day

Average ~25 ~230 ~380 ~100 ~1,330 ~45

revenue per (~15–310) (~30–760) (~160–900) (~30–350) (~550–1540) (~15–550)
lab per year
(US$ K)

Market size ~2.1 ~0.7 ~0.5 ~2.6 ~0.8 ~0.8 US$

CY23 (US$ B, (28%) (9%) (6%) (35%) (10%) (10%) 7.5B
% share)

Growth
forecast
11–12% 17–19% 18–20% 10–14% 17–19% 15–17% ~14%
(CY23-28P
CAGR)

3.5 Split of labs across city tiers

Tier 1 and 2 cities encompass around 67% of India's total pathology network, indicating a significant concentration of laboratory facilities
in these urban areas. This distribution highlights the disparity in access to diagnostic services across regions, with tier 1 and 2 cities having
notably higher lab densities compared to others. To address this imbalance, the government is striving to expand laboratory presence
beyond these urban centers, particularly targeting tier 3+ and rural areas. By implementing initiatives aimed at increasing lab numbers in
these underserved regions, the government aims to improve healthcare accessibility and affordability nationwide, thereby promoting public
health and enhancing healthcare outcomes.
In terms of volume, standalone labs form the majority of the labs with the largest share at 63%, followed by small/medium private hospital
labs at 19%. Conversely, national chain labs and large private hospital labs hold the smallest shares, accounting for only 1% and 0.5%,
respectively.

© Praxis Global Alliance 30

 Exhibit 3.5

Lab footprint is mostly skewed towards tier 1 cities; govt. is trying to bridge the gap and
increase presence

Pathology lab network in India

(# K, CY23)
Total: ~132K # labs per
1,000
population
63% 2% 1% 19% 0.5% 14%

84K 3K 1K 26K 0.6K 18K 132K

(4%) (11%) (10%) (9%) (9%) (12%) (7%) 0.3

Tier 3+
(13%) Tier 3+
Tier 2
(10%) Tier 3+ Tier 3+,
Tier 3+ (9%) 0.2
Tier 3+ (4%) (14%) 33%(7%)
(12%)
Tier 2
(12%) Tier 2
(10%)
Tier 2,
Tier 2 0.3
Tier 2 (5%) 25%(7%)
(11%) Tier 2
(14%)
Tier 1
(9%)
Tier 1 Tier 1
(9%) (10%) Tier 1,
Tier 1 Tier 1 42%(6%) 0.4
Tier 1 (3%) (9%) (9%)

Standalone Regional Small / Medium pvt. Govt. Overall

labs chain labs hospital labs hospitals / labs
Large pvt.
National
hospital labs
chain labs

xx% % share by volume (XX%) CAGR 23E-27P Tier 1 Tier 2 Tier 3

3.6 Rise of specialized tests

Specialized testing is experiencing significant growth. This trend highlights the rising demand for targeted diagnostics driven by
several key factors.
Specialized tests are targeted investigations used for specific diagnoses, monitoring of particular conditions, and assessing specific
markers or functions within patients.
An aging population, the integration of personalized medicine practices, and technological advancements in diagnostics are fuelling
the expansion of the specialized testing market. This trajectory is likely to continue as healthcare providers increasingly require these
tools to address complex health challenges.
The specialized testing segment positions diagnostics providers for accelerated growth and innovation. Investing in these capabilities
will enhance overall service offerings, leading to improved patient outcomes and greater market differentiation.

© Praxis Global Alliance 31

 Exhibit 3.6

Market has seen stabilization of routine tests; specialized tests are seeing faster growth
and focus by operators

Routine tests Specialized tests

Tests performed to assess the general Targeted investigations used for specific diagnoses,
health status of a patient monitoring of specific conditions, assessing specific
markers or functions within patients

• Basic metabolic panel (BMP) • Therapeutic drug monitoring

• Lipid panel • Toxicology screening
• Liver function test • Tests for tumor markers
Clinical • Kidney function test (creatinine, blood urea • Cardiac marker tests (troponin levels,
chemistry nitrogen) creatine-kinase levels)
• Lactate blood test • Microfluid POC
• Uric acid
• Serum protein test (albumin/globulin)
• Electrolyte tests
• Glucose tolerance

• Allergy testing • HIV tests

• Vitamin testing (B12, D, etc) • Infectious agent antigen detection tests
Immunoassay • Protein (Ferritin, immunoglobulin (Igg, CSF) • Auto-immune disease detection
• Hepatitis B antigen tests • Tests for tumor markers (e.g. prostate-specific
• Hormones testing (thyroid, testosterone, antigen – PSA)
cortisol, pregnancy hormone)

• White blood and red blood cell count • Sickle cell anemia
• Hemoglobin tests • Hemophilia
• Blood group test • Coagulation studies (prothrombin time,
Hematology
• Renal profiling thromboplastin time)
• Platelet count
• Hematocrit

• Microscopy tests
• Hematoxylin and Eosin (H&E) staining tests
• Biopsy such as kidney biopsy, bone biopsy, skin
biopsy, liver biopsy, etc.
Histopathology
• Direct immunofluorescence test
• Cytopathology
• Immunohistochemistry
• Fluorescence in situ hybridization (FISH)

• Surgical pathology
• Urine culture • Liquid biopsy
Others
• C. Difficile Toxin A & B, Stool • Molecular pathology tests
• Genomics with RNA/DNA sequencing

Note(s): Commonly undertaken tests have been listed; List of tests is not exhaustive

© Praxis Global Alliance 32

 3.7 Pathology test prices
India's test prices are lower compared to those in developed countries, suggesting potential for future price realization improvement. As
advancements in technology and healthcare infrastructure continue to progress in India, there exists an opportunity to enhance the value
proposition of diagnostic tests while maintaining affordability and accessibility for patients. This potential for price realization improvement
highlights the evolving landscape of healthcare economics and the need for sustainable strategies to optimize healthcare delivery and
outcomes in India.
Diagnostic test pricing showcases significant geographical variations. India, Nigeria, and Indonesia maintain notably lower prices for
common tests like liver function, thyroid assessment (TSH), Vitamin D screening, CBC, and urinalysis. In sharp contrast, the United States and
the United Kingdom exhibit substantially higher prices for liver function and lipid profiling tests.

Exhibit 3.7

India’s test prices are lower compared to developed countries, indicating room for future price
realization improvement

Modality Segment tests India United United Australia Nigeria Brazil China Indonesia
States Kingdom

Liver function test

4-10 160-212 160-204 115-131 4-8 10-18 8-28 4-5
(US$)

Clinical Lipid profiling

Chemistry 4-12 128-200 55-289 130-195 5-6 5-11 17-21 6-10
(US$)

Kidney function test

5-12 10-14 43-81 23-46 4-7 1-3 6-14 3-19
(US$)

Thyroid–TSH
(US$) 3-5 97-195 97-176 29-52 11-22 4-5 6-8 13-34
Immunoassay

25-Hydroxyvitamin
10-18 15-263 82-183 33-117 28-37 5-11 14-42 26-31
D (US$)

Complete blood
Hematology 4-6 46-125 50-70 11-25 3-5 2-5 2-4 6-40
count (US$)

Urinalysis Urine (US$) 1-4 30-250 25-38 53-69 2-3 2-4 3-6 2-8

Test price

High Low

© Praxis Global Alliance 33




 4.0 RADIOLOGY
4.1 Introduction
The growing burden of complex diseases like cancers necessitates precise and timely diagnoses. This, coupled with rising health awareness,
fuels the demand for non-invasive radiology services like X-rays, CT scans, and MRIs, playing a crucial role in early detection and diagnosis
across India.

The market is divided into two segments: soft radiology and advanced radiology. Soft radiology accounts for 55% of the radiology market in
FY23, while advanced radiology accounts for 45%. Soft radiology includes X-ray and ultrasound. Advanced radiology includes CT scans,
MRIs, nuclear imaging and interventional procedures. Exhibit 4.1 illustrates a detailed snapshot of the radiology market.

Exhibit 4.1

Radiology is a US$ 5.4B market in FY23; soft radiology (55%) has the largest share in radiology market,
followed by advanced radiology (45%)

US$
5.4B
Radiology market
(US$ B , FY23)

US$ 3.0B US$ 2.4B

(55%) (45%)
Soft radiology Advanced radiology

US$ 1.9B US$ 1.1B US$ 0.9B US$ 0.9B US$ 0.3B US$ 0.3B
(63%) (37%) (~37%) (~38%) (~12%) (~13%)

X-ray Ultrasound CT scan MRI Nuclear Interventional

imaging procedures

• Chest X-ray • Abdominal USG • Head CT • Brain MRI • PET scan • Angiography
• Abdominal X-ray • Obstetric USG • Chest CT • Spine MRI - FDG-PET • Angioplasty
• U / L Limb X-ray • Pelvic USG • Abdominal CT • Musculoskele- - Cardiac • Stent
• Dental X-ray • Breast USG • Pelvic CT tal MRI PET placement
Radiology tests by modality

• Skull X-ray • Renal USG • Cardiac CT • Abdominal - PET / CT • Embolization

• Transvaginal • Spine CT MRI - PET / MRI • Needle
• Neck X-ray
USG • CT • Breast MRI • SPECT scan biopsies
• Spine X-ray
• Transrectal USG angiography • Cardiac MRI - Brain • Radiofrequen-
• Joint X-ray
• Doppler USG • CT • Functional MRI SPECT cy Ablation
• Hand and foot (RFA)
X-ray • Echocardiogram Colonography • MR angiogra- - Bone
(ECG) • CT Urography phy SPECT • IVC filter
• Mammography placement
- Transthoracic • CT Renal • MR venogra- - Myocardial
• Kidney, Ureter • Feeding-tube
- Trans-esophag stones phy Perfusion
and Bladder placement
eal • Musculoskelet Whole-body SPECT
(KUB) X-ray
al CT MRI • Breast
• Vascular USG
scintigraphy
- Doppler
• Radionuclide
- Carotid
angiography

Note(s): Commonly undertaken tests have been listed; list of tests is not exhaustive

© Praxis Global Alliance 35

 4.1.1 Soft radiology
Soft radiology encompasses the fundamental diagnostic imaging techniques used to visualize internal structures of the human body. It is
primarily employed for routine screenings, initial assessments, and detection of common medical conditions such as fractures, infections,
and organ abnormalities. It is characterized by its non-invasive nature, relatively low cost, and accessibility in clinical settings. Soft
radiology plays a crucial role in facilitating timely diagnosis and guiding treatment decisions across various medical specialties,
contributing to improved patient outcomes and quality of care.

4.1.2 Advanced radiology

Advanced radiology refers to specialized imaging modalities and techniques that offer enhanced visualization and diagnostic capabili-
ties beyond those of traditional soft radiology. Examples include magnetic resonance imaging (MRI), positron emission tomography
(PET), nuclear medicine, and advanced CT imaging protocols. Advanced radiology provides detailed anatomical information, function-
al insights, and molecular imaging capabilities, enabling precise localization of pathology, assessment of disease progression, and
treatment planning. These techniques often require specialized equipment, expertise, and interpretation skills. Advanced radiology plays
a critical role in diagnosing complex medical conditions, monitoring treatment response, and guiding minimally invasive interventions,
thereby improving patient care outcomes and advancing medical research.

4.2 Radiology market

The radiology market is a large and growing market, valued at US$ 5.4B in FY23. The market is expected to grow at a CAGR of ~14%
from FY23 to FY28, to reach a value of US$ 10.5B, as illustrated in Exhibit 4.2.

Exhibit 4.2

Radiology market is expected to grow at a CAGR of ~14% to reach ~US$ 11B by FY28

Radiology market
(US$ B, FY23-28P)

CAGR
FY23-28P

10.5 ~14%
10.5

0.7 ~17%
0.7 ~16%
Advanced
(~15%)

1.8 ~15%

5.45.4 1.7 ~13%

0.3
0.3
0.9 2.1 ~14%

0.9
(~14%)
Soft

1.1
3.5 ~13%
1.9

FY23 FY28P

X-ray Ultrasound CT MRI

Nuclear Interventional

© Praxis Global Alliance 36

 4.3 Growth drivers for radiology market
The radiology market is experiencing sustained growth driven by several prominent trends. Firstly, the rising incidence of complex
medical conditions is driving the demand for radiology services, as the field plays a crucial role in early detection and precise diagnosis.
Secondly, technological advancements, particularly in tele-radiology, have helped address the shortage of radiologists across India,
especially in tier 2/3+ cities. Healthcare start-ups focusing on small towns are contributing to bringing technological innovations to the
industry. Additionally, the tier 2/3+ markets offer lucrative opportunities due to lower real estate costs, salaries, and less competition,
making them attractive to radiology players. Finally, government initiatives and public-private partnerships are expanding radiography
services nationwide, bridging infrastructure and economic gaps to ensure increased accessibility to high-quality radiological treatments
for all.

Exhibit 4.3

Growing disease complexity, technological advancements, and lucrative tier 2/3+ market
are key drivers of growth

Growth driver Brief description

• The increasing prevalence of complex medical conditions, requiring precise and timely diagnosis,
Growing disease is driving the growth of the radiology services market due to their effectiveness in early detection and
complexity accurate diagnostics

Technological • Tele-radiology has resolved the radiologist shortage crisis especially in tier 2/3+ cities
advancements • Healthcare start-ups focusing on small towns help bring technological advancements to the
industry

Lucrative tier • Attractive RoI (due to lower real estate costs and lower salaries) and lesser competition make
2/3+ market tier 2/3+ cities attractive markets for radiology players

Government • Government initiatives and public-private collaborations expand radiology pan India
initiatives and • Bridging infrastructure and economic gaps ensures increased accessibility for high-quality
PPPs radiological treatments

4.4 Radiology lab landscape

The Indian radiology market can be categorized into several segments, including standalone laboratories, regional chains, national
chains, small and medium private hospitals, large private hospitals, and government hospitals and institutions, as illustrated in Exhibit 4.4
• Standalone laboratories, while numerous with approximately 46,000 centers, tend to be small-scale operations with low patient
volumes. Consequently, their market size constitutes only about 33% of the total market, amounting to ~US$ 1.8B. It is projected that
standalone labs will experience a CAGR of 11-13% over the next five years

• Regional chains, comprising around 2,800 centers, are larger entities compared to standalone labs. They represent approximately
4% of the market, with a market size of roughly ~US$0.2B. Regional chains are forecasted to grow at a CAGR of 17-19% over the
next five years

• National chains, constitute the largest and most well-equipped segment. Despite their prominence, they comprise only 3% of the
total market, with a market size of around ~US$ 0.2B. National chains are also expected to experience growth, with a projected
CAGR of 17-19% over the next five years

• Small and medium private hospitals typically operate their own in-house radiology laboratories. These hospitals contribute
significantly to the market, accounting for approximately 31% of the total market, with a market size of about US$ 1.7B. Radiology
services within small and medium private hospitals are anticipated to grow at a CAGR of 11-14% over the next five years

• Large private hospitals and government hospitals house the largest and most advanced radiology laboratories. They represent
29% of the total market, with a market size of ~US$1.5B. However, radiology services within large private hospitals and government
hospitals are expected to rise at a CAGR of 17-19% over the next five years

© Praxis Global Alliance 37

 Exhibit 4.4

Radiology labs landscape is highly unorganized with estimated ~55K labs, of which over 80%
are standalone

Labs Private hospitals Government

Standalone Regional National Small / med pvt. Large pvt. Labs/hospitals Total
labs chain chain (standalone) (chains)

• Standalone • Diagnostics chains with • Standalone • Large medical • Government

diagnostic labs good volume which hospitals setup centers hospitals with
with low patient primarily cater to all by established serving high volume,
volume common type of specialists which variety of subsidized
• Independent lab imaging tests such as have own common and scan prices
Description
setups which X-ray, CT scans (head, captive demand advanced and most
primarily are a chest, abdomen etc.), (>40%) patients, clinical cases clinical needs
combination of MRI and specialized with medium
one or more i.e., clinical needs to high
USG, X-ray, CT patient
scans volume

# centers ~46K ~2.8K ~1.1K ~3.9K ~1.7K

(~83%) (~5%) (~2%) (~7%) (~3%) 55K

Average
scans ~30 ~40 ~60 ~90 ~120
processed (10-40) (25-60) (30-100) (50-150) (80-250)
/day

Average
revenue per ~40 ~70 ~180 ~440 ~900
centre per (~10-50) (~45-110) (~90-300) (~245-740) (~600-1,900)
year (US$ K)

Market size
~1.8 ~0.2 ~0.2 ~1.7 ~1.5 US$
CY23(US$ B,
(~33%) (~4%) (~3%) (~31%) (~29%) 5.4B
% share)

Growth
forecast
~11-13% ~17-19% ~17-19% ~11-14% ~17-19% ~14%
(CY23-28P
CAGR)

© Praxis Global Alliance 38

 4.5 Radiology test prices
There are notable disparities in the pricing of medical tests both across countries and within specific modalities and segments, as depicted in
Exhibit 4.5. For example, a chest X-ray in Nigeria ranges from US$ 3-6, while in India, it costs between US$ 2-7. In developed countries
like the United States, prices tend to be higher; for instance, a brain MRI in China ranges from US$ 83-140, whereas in the United States, it
can cost anywhere from US$ 694-1,796.
These variations also exist within countries. In the United States, for instance, a chest X-ray can range from US$ 105-285, with a full-body
MRI being the most expensive test at US$2,500-12,000.
Additionally, CT scans are typically more affordable than MRIs, with a brain CT scan in India ranging from US $12-37, compared to a
brain MRI at US $23-93.
It’s important to note that the provided prices only reflect out-of-pocket expenses. In some countries, like the United States, there is health
insurance to cover for the medical test costs. However, even with insurance coverage, patients may still face deductibles or co-pays for
these tests.

Exhibit 4.5

India’s radiology prices are lower compared to developed countries, indicating room for realization
improvement in future

United United
Modality Segment tests India States Kingdom Australia* Nigeria Brazil China Indonesia

Chest 2-7 110-285 105-235 16-62 3-6 10-13 14-55 10-18

X-ray
(US$)
Soft
Dental 44-55 90-117 160-310 27-97 3-6 16-80 21-42 6-9
Radiology

Ultrasonography
7-30 24-170 109-129 25-249 4-16 23-37 8-42 14-60
(US$)

Brain 12-37 316-817 355-755 22-160 31-44 24-90 28-83 102-161

CT-scan 504–
Chest 24-63 450-600 64-137 30-44 94-147 42-97 101-185
(US$) 1,304

Abdomen 66-154 600–

400-670 64-137 34-44 94-147 139-416 163-236
1,554

Advanced 1,300- 2,038- 700- 1,123- 633-

PET Scan (US$) 75-340 0** 799-812
Radiology 4,600 3,162 1,300 1,404 2,218

Brain 694- 200-

23-93 49-156 32-44 20-55 83-139 227-245
1,796 1,500

MRI Cardiac 955- 700- 83

73-192 146-257 32-40 120-200 70-317
(US$) 2,472 1,300 -111

Full-body 274-499 2,500- 1,295- 416-

700-900 160-640 200-400 81-626
12,000 1,800 1,390

Test price

High Low
Note(s): *Radiology services receive financial support from Medicare, which covers either the full cost or a portion of the expenses associated with these tests;
**Medicare provides complete financial support for PET scans, the prices mentioned are paid out-of-pocket expenses
© Praxis Global Alliance 39



  ­

 5.0 DIAGNOSTICS EQUIPMENT MARKET IN INDIA
5.1 Introduction
The diagnostics equipment market involves the equipment and reagent of medical devices used in radiology and pathology. Radiology focuses
on medical imaging, while pathology involves studying diseases through tissue and cell examination.
In India, this market is expected to grow significantly from ~US$ 4B, with an overall expansion at a CAGR of 12% from CY23 to CY27,
reaching a total value of ~US$ 6B. The clinical and immunoassay segments are projected to be the largest, each with a market size of ~US$ 1B
in CY27. Other high-growth segments include clinical chemistry, immunoassay, and histopathology, with projected CAGRs of 14%, 16%, and
18%, respectively. However, the X-ray, CT, and MR segments are expected to experience slower growth, with CAGRs of 7%, 4%, and 9%,
respectively, as illustrated in Exhibit 5.1.

Exhibit 5.1

Diagnostics equipment market in India is expected to reach ~US$ 6B by CY27, growing at a

CAGR of ~12%

Diagnostics equipment market size in India

(US$ B, CY23–27P)

CAGR
CY23-27P

5.5 12%

Radiology (~9%)
Cath lab, 5% 19%
X-ray, 3% 6%
CT, 4% 7%
MR, 7% 9%
Ultrasound, 5% 7%

Histopathology, 7% 18%

3.5 POC, 6% 9%
Cath lab, 4%
X-ray, 4% Molecular diagnostics,
CT, 5%
15% 10%
MR, 6%
Ultrasound, 6%
*Pathology (~13%)

Urinalysis,1% 9%
Histopathology, 5% 12%
Hematology,7%
POC, 6%
Molecular diagnostics,
17%
Immunoassay,20% 16%
Urinalysis,1%
Hematology,7%

Immunoassay,17%

Clinical chemistry,20% 14%

Clinical chemistry,19%

CY23 CY27P

Note(s): *Pathology medical equipment market includes both instrument and reagent

© Praxis Global Alliance 41

 5.2 Growth drivers of diagnostics equipment market in India
• Expansion of diagnostics labs in tier 2/3+ cities: Decentralization and partnerships with small to medium-sized hospitals are
propelling the growth of chain lab centers in tier 2/3+ cities. This initiative aims to enhance healthcare accessibility and diagnostic
services in these regions, reinforcing medical infrastructure beyond major urban centers

• Rising disposable income: Increasing disposable incomes and broader insurance coverage are driving the demand for advanced
medical treatments and devices. This trend indicates a growing capacity and willingness among individuals to access and afford
state-of-the-art healthcare options, stimulating the expansion of the medical technology market

• Increasing medical tourism: The burgeoning medical tourism market, valued at over US$ 7B in CY22, is attracting investments in
advanced medical devices and services. This highlights the significance of cutting-edge healthcare offerings in attracting international
patients and enhancing the competitiveness of medical tourism destinations

• Rising prevalence of non-communicable diseases: The escalating challenge of NCDs in India, projected to constitute 74% of the
disease burden by CY30, is fuelling the demand for specialized medical devices. Innovative healthcare solutions are essential to
effectively manage the growing prevalence of NCDs in the country

• Aging population: With the projected increase in the elderly population to 21% by CY50 and a growing trend towards homecare
for chronic conditions, there is a demand for home-based medical equipment. This highlights the need for convenient healthcare
solutions to support an aging population managing chronic health issues at home

Exhibit 5.2

Increasing diagnostic labs in tier 2 / 3+ cities, rising disposable income and increasing medical
tourism are the key drivers

Growth driver Brief description

Expansion of
• Expansion of chain lab centers in tier 2/3+ cities through decentralization and increase in small
diagnostic lab in
and medium hospitals
tier 2/3+ cities

Rising disposable • Growing disposable incomes and broader insurance coverage are increasing the demand for
income advanced medical treatments and devices

Increasing • With medical tourism burgeoning to a market value of US$ 7B+ in CY22, there is an uptick in
medical tourism investment for advanced medical devices and services

Rising spread of
non-communi- • Escalating challenge of NCDs in India, constitute 74% of the disease burden by CY30, is spurring
cable diseases the need for specialized medical devices

Aging • Projected rise in the elderly population to 21% by CY50 (from 11% in CY22), and a trend towards
population homecare for chronic conditions, is driving the demand for home-based medical equipment

5.3 Installed base of diagnostics and IVD equipment

Tier 1 cities dominate the landscape of pathology equipment, holding the highest market share at 46%, likely due to their larger population
and higher healthcare spending compared to other tiers. The penetration of clinical chemistry equipment is most pronounced in tier 1 cities,
with 0.46 units per 1,000 population, more than double the rate observed in tier 3+ cities, which stands at 0.20 units per 1,000
population. This stark contrast emphasizes the higher accessibility and utilization of pathology equipment in tier 1 cities, reflecting the
disparities in healthcare infrastructure and resources across different city tiers.
Furthermore, the penetration of radiology medical equipment is significantly lower in tier 2 cities compared to tier 1 cities. The penetration
of X-ray imaging equipment is more pronounced in tier 1 cities, with 0.22 units per 1,000 population, as observed in tier 3+ cities, which
stands at 0.21 units per 1,000 population. This disparity emphasizes the challenges in providing comprehensive radiological services in
rural regions. A snapshot of the penetration levels has been depicted in Exhibit 5.3.

© Praxis Global Alliance 42

 Exhibit 5.3

The equipment installation is very highly skewed towards tier 1 cities with <0.5x penetrations in tier 3
cities compared to tier 1

Distribution of installed base of pathology medical equipment across city tiers

(#, CY22)
143K

34%

85K
24% 27%

25% 35K
31K
42% 24% 27%
48% 24% 24%
52% 49%

Clinical Hematology Immunoassay Urinalysis

chemistry

Tier 1 Tier 2 Tier 3+

Overall
Penetration per ‘000

0.29 0.17 0.06 0.07

urban
population

Tier 1 0.46 0.31 0.12 0.13

Tier 2 0.31 0.19 0.07 0.08

Tier 3+ 0.20 0.09 0.03 0.04

Distribution of installed base of radiology medical equipment across city tiers

(#, CY23)
105K

50%

9K
24% 50% 5K
37% 3K
25% 20% 30%
27% 40%
25% 43% 30%
X-ray CT MRI Cath Lab

Tier 1 Tier 2 Tier 3+

Overall
Penetration per ‘000

0.22 0.02 0.01 0.01

urban
population

Tier 1 0.22 0.02 0.02 0.01

Tier 2 0.23 0.02 0.01 0.01

Tier 3+ 0.21 0.02 0.01 0.005

© Praxis Global Alliance 43

 5.4 Market segmentation
The Indian medical equipment market comprises of three distinct segments, each offering a unique value proposition as illustrated
in Exhibit 5.4.

• Domestic players: Focus on delivering high-quality products at competitive prices, with a deep understanding of local market needs
and preferences. They have well-established distributor networks and sales teams, enabling broad outreach and efficient after-sales
service, particularly in tier 2/3+ cities. Adaptable to Indian regulatory and compliance standards

• Asian MNCs: Provide a wide range of cost-effective yet sophisticated solutions, coupled with perceived high product quality like
Japanese MNCs. Strong manufacturing capabilities ensure a consistent supply of high-quality products at scale. Emphasis on
technological advancements, enhancing features like grayscale resolution and color doppler advancements

• Western MNCs: Prioritize strong brand reputation, technological leadership, and the ability to offer high-quality,
performance-driven equipment. Preferred by customers seeking reliability and cutting-edge technology. Significant investment in
research and development ensures ongoing enhancements. Expanding manufacturing presence in India to meet the rising demand

Exhibit 5.4

The market is highly competitive, with three segments playing, each having a different proposition

Domestic players Asian MNCs Western MNCs

• Broad portfolio of products with a • Wide product portfolios with • Growth driven by strong brand
focus on low throughput cost-effective yet sophisticated reputation and recognition
solutions solutions • Technology leadership, with
• Cost competitiveness due to • Perceived high-quality of ability to offer high-quality
lower manufacturing and products, like Japanese MNCs performance
distribution costs preferred by customers
Proposition to customers

• Offer a wide range of

• Strong reach via established • Strong service network IVD/imaging equipment
distributor network and sales established in tier 1 and 2 cities catering to various healthcare
team needs
• Established strong
• Understanding of local market manufacturing capabilities, • Robust brand strength attributed to
needs and preferences ensuring high-quality products at low frequency of breakdowns
scale
• Lower TAT for equipment • Focus on research and
servicing in tier 2 cities • Focus on technological development for continuous
advancements, improving improvement
• Customization of products to
grayscale resolution and
suit specific regional requirements • Expanding manufacturing
advancements in Color Doppler footprint with new production
• Adaptability to regulatory and
• Emergence as lines of CT scanners under the PLI
compliance standards in the
"value-for-money" brands scheme
domestic market
offering MNC quality with superior
service
Key players

Note(s): PACS: Picture Archiving and Communication System

© Praxis Global Alliance 44

 5.5 Tailwinds and headwinds in the market
5.5.1 Tailwinds
• Aging population: The elderly population, aged 60 and above, is projected to increase significantly from 11% in CY22 to an estimated
21% by CY50. This demographic shift highlights a rising need for diagnostics, reflecting increased demand for healthcare services and
diagnostic solutions to address the unique medical challenges associated with an aging population

• Technological advancements: Ongoing technological innovations, including POC testing, digital pathology, and AI applications in
diagnostics and imaging, are revolutionizing healthcare by improving speed, accuracy, and accessibility in diagnostics

• Favourable government policies: Enhanced government support and increased healthcare funding are driving the development and
adoption of new IVD technologies

• Increasing prevalence of chronic diseases: The rising disease burden, with chronic/non-communicable diseases expected to
increase from 46% in CY06 to 51% in CY26, highlights the growing impact of long-term health conditions. This highlights the critical
need for targeted interventions, preventive measures, and healthcare strategies to address the growing prevalence of chronic diseases

• Increasing availability of minimally invasive surgical procedures: State governments are actively procuring equipment for
in-house public facilities, with a notable increase in tenders for CT scans and MRI systems in recent years. This trend indicates a strategic
focus on bolstering diagnostic capabilities within public healthcare infrastructure, enhancing medical services and diagnostic capacities
at the regional level

Exhibit 5.5

Aging population, technological advancements and favorable govt. policies act as tailwinds

Tailwinds Brief description

Aging • Elderly population (aged 60 and over) is projected to rise from 11% in CY22 to an estimated
population 21% by CY50, indicating a substantial increase in the need for diagnostics

Technological • Ongoing technological innovations, such as POC testing, digital pathology, and artificial
advancements intelligence (AI) applications in diagnostics and imaging

Favourable
• Enhanced government support and increased funding for healthcare innovation is fuelling the
government
development and adoption of new IVD technologies
policies

Increasing • Disease burden due to chronic / non-communicable diseases is expected to increase to 51% in
prevalence of CY26 from 46% in CY06
chronic diseases
Increasing
availability of • Increasing procurement of equipment by state govts for in-house public facilities, with ~122 and
minimally ~48 tenders floated in CY20-21 for CT and MRI respectively
invasive surgical
procedures

© Praxis Global Alliance 45

5.5.2 Headwinds
• High capital and technical know-how requirement: Substantial capital investment is necessary for research and development,
technology upgrades, and related initiatives, leading to a prolonged break-even period. This requires enduring commitment and
financial resilience from organizations engaging in advancements and innovation within the industry

• Stringent regulatory and compliance requirements: Stringent CDSCO regulations and NPPA price caps pose challenges,
necessitating industry players to navigate a complex regulatory landscape while balancing innovation and pricing compliance

• Reliance on imports: India's medical device sector heavily relies on imports for high and medium-technology products. Addressing
self-sufficiency through domestic manufacturing, innovation, and supply chain enhancement is crucial for long-term resilience and
sustainability

• Competitive pressure: Intense competition, both domestically and internationally, exerts significant pressure on pricing and profit
margins within the market. Navigating this competitive landscape requires pricing strategies and operational efficiency to maintain
profitability

Exhibit 5.6

High capital requirement and regulatory compliance act as headwinds

Headwinds Brief description

High capital and • Significant capital investment is required for R&D, technology upgradations, etc. with a long
technical know-how break-even period to reap the investment benefits
requirement

Stringent regulator
and compliance • Stringent regulatory requirements and compliance standards set by CDSCO can pose challenges
requirements

Reliance on imports • India is dependent on imports for high – medium technology based medical device products

Competitive • Intense competition from domestic and international players exerts pressure on pricing and
pressure profit margins

© Praxis Global Alliance 46

€

 ‚

 6.0 THEMES THAT WILL DEFINE THE FUTURE
The diagnostics industry is at the cusp of a transformation, driven by an array of emerging opportunities that are set to redefine its
future. Below are the key themes poised to shape the trajectory of the diagnostics landscape.

6.1 Emerging opportunities in the diagnostic industry

• Embracing digitalization and new age technology: The digital wave has swept through the diagnostics sector, bringing forth
technologies that elevate precision and efficiency. In the future, market dominance will belong to those who incorporate artificial
intelligence, machine learning, and data analytics into their operations. These tools will not only improve patient outcomes but also
ensure that companies remain cutting-edge and patient-focused

• Strategic growth through M&A: The consolidation trend via mergers and acquisitions is recalibrating the industry's competitive
dynamics. The winners will be those who successfully merge or acquire to broaden their services and extend their reach. This
inorganic growth promises a robust positioning in a crowded marketplace

• Pursuing operational excellence: Operational excellence and supply chain innovation are becoming the backbone of the
diagnostics industry. By adopting lean operations and just-in-time inventory, providers can reduce costs and provide high-quality
services, allowing them a distinct competitive advantage

• Capitalizing on economies of scale: As diagnostic companies scale up, they reap the benefits of reduced costs and increased
service accessibility. The economies of scale thus achieved can result in more affordable diagnostics, with the added advantage of
greater bargaining power in the marketplace
• Catering to new clinical needs: The rapid pace of medical discoveries dictates the emergence of new clinical demands. Providers
that can quickly adapt and offer new and sophisticated diagnostic tests will be able to capture emerging market segments and cater
to unmet medical needs
• Innovative business models: The shift towards value-based care demands innovative business models centered around patient
outcomes. The future belongs to those who not only provide diagnostic services but also enhance the overall patient care continuum

• Leveraging insurance penetration: With broader insurance coverage, the customer base for diagnostic services is expanding.
Providers that can efficiently work with insurance companies and understand the intricacies of billing will be able to tap into the
growing market

• Addressing evolving patient needs: Changing patient demographics and expectations necessitate an evolution in service
offerings. Providers that can offer personalized diagnostics, tailored to the needs of diverse patient groups, will find greater
success and relevance

• Expanding into tier 2/3+ cities: The untapped markets of smaller cities and rural areas hold vast potential for growth. Companies
that can deliver affordable and high-quality diagnostics in these regions will not only grow but also contribute to the greater goal of
universal healthcare

• Navigating regulatory and governmental changes: Regulatory frameworks and government health initiatives are significant
influencers in the diagnostics industry. Adapting to these changes and aligning with public health objectives is crucial for
sustainable growth

© Praxis Global Alliance 48

 Exhibit 6.1

Winners in the diagnostics industry will need to ride on the new waves of opportunities

Digitalization and new Consolidating and driving strategic

age technology 01 02
M&A / inorganic acquisitions

Operational performance
improvement and supply chain 03 Emergence of economies of scale 04
transformation

Emergence of new clinical needs

05 Emergence of new business models 06
and developments

Rising insurance penetration 07 Evolving patient needs 08

Rising opportunity of the

09 Regulatory and government impact 10
tier 2/3+ market

6.2 Integration of technology in diagnostics

The diagnostics sector is undergoing a rapid transformation, fueled by technological advancements that are optimizing operations,
enhancing patient experiences, and introducing new business models.

6.2.1 Advancements in information management and operational apps

The backbone of modern diagnostics is increasingly digital. LIMS integrated with lab instruments and digital dashboards for monitoring
turnaround times are pivotal innovations driving the industry's internal operations. These systems allow for real-time tracking and quality
control, ensuring accuracy and efficiency.

6.2.2 Enhancing customer interactions through digital platforms

On the customer front, apps and chatbots are revolutionizing the way patients interact with diagnostic services. These tools facilitate the
booking of lab tests, provide medical information, and enhance overall customer service by integrating AI and machine learning for
personalized test recommendations.

© Praxis Global Alliance 49

 6.2.3 Emergence of new business models in diagnostics
The rise of online diagnostic platforms and mobile laboratories represents a significant shift in the business landscape. These models offer
greater accessibility and convenience to patients, particularly in remote areas, and support high-volume testing with faster turnaround
times, which is essential for large-scale health initiatives. From enhancing operational workflows to improving patient interactions and
rolling out new service models, technology is at the forefront of this transformation. Diagnostic companies that successfully leverage these
tech-driven opportunities are set to lead the market.

6.2.4 The rising trajectory of POC and rapid tests in the post-COVID era
The POC and rapid tests market has expanded significantly during the COVID-19 pandemic, setting a precedent for growth and wider
acceptance in the healthcare landscape. Here's an analytical perspective on this trend:
The market for POC and rapid tests is on a robust growth trajectory, expected to grow at a CAGR of 18% from CY22 to CY27. This
growth is driven by the market's recognition of the value offered by these tests in terms of speed and convenience.

Exhibit 6.2.1

POC and rapid tests market is expected to grow at a CAGR of 18% between CY22 to CY27

POC and rapid tests market

(US$ M, CY20–27P)

1,375

CAGR
18%

610
525
451

CY20 CY21 CY22 CY27P

6.2.5 Drivers of POC and rapid tests adoption

The adoption of POC and rapid tests is propelled by their lower TAT for diagnosis, crucial in administering timely treatment plans. Addition-
ally, the pandemic has heightened patient awareness about these testing options, contributing to their increased adoption by healthcare
providers. The steady increase in market value for POC and rapid tests, from US$ 451M in CY20 to a projected US$ 1,375M in CY27,
signifies the burgeoning potential of this sector. Exhibit 6.2.2 indicates that while there's high awareness and need for rapid testing in Metro
and tier 1 cities, there's a significant opportunity for increased adoption in tier 2/3+ cities, considering the affordability and the urgency of
testing needs in these regions.

© Praxis Global Alliance 50

 Exhibit 6.2.2

Lower TAT in diagnosis and increasing patient awareness are the key drivers for adoption of
POC and rapid tests

City tier
Description
Metro/
Tier 2 Tier 3+
Tier 1

TAT ● ◕ ◕ • Enables instant/quick diagnosis and administration of treatment plan

Awareness ◕ ◔ • Increasing patient awareness translating to doctors/

hospitals incorporating POC and rapid tests in their portfolio

Affordability ◕ ● ● • Many of these tests are relatively affordable, which is a crucial factor in a
country like India where out-of-pocket healthcare expenses can be high

◑ ◕ ◑
• Satisfactory accuracy levels achieved as per doctors w.r.t. the time taken
Accuracy • Favorable trade-off between speed and accuracy for POC test for several
use cases

◔ ◑ ◕
• POCT devices help GPs/specialists/hospitals get better first-hand
Testing
information
urgency
• Very useful in times of emergency

Intensity level

Low ◔ ◑ ◕ ● High
6.3 Mergers & Acquisitions: Fueling growth and expansion in Indian diagnostics
The diagnostics industry in India is consolidating, with strategic M&A playing a key role in shaping the market. This consolidation is not
just about growth; it's a strategic move to expand services, reduce costs, and gain competitive advantage.

6.3.1 Valuation trends in diagnostics M&A

Recent acquisitions in the Indian diagnostics space highlight a significant range in valuation multiples. The EBITDA multiple, a common
valuation metric, has ranged from approximately 7x to as high as 29x. Exhibit 6.3.1 gives a detailed look into this trend.

© Praxis Global Alliance 51

 Exhibit 6.3.1

Average EBITDA multiple of recent acquisitions are in the range of ~7-29x

Cost of Target Target

Acquirer acquisition EBITDA Revenue revenue EBITDA
Target
(INR B) Multiple multiple (INR B) (INR B)
Leading national Small regional
6.4 ~15x ~6x 1.1 0.4
chain 1 chain 1

Leading national Small regional

9.3 ~14x ~3x 3.0 0.6
chain 2 chain 2

Leading national Small regional

3.5 ~3x ~3x 3.0 1.3
chain 3 chain 3

Leading national Small regional

1.0 ~7x ~1x 0.7* 0.1*
chain 4 chain 4

Leading national Small regional

0.3 ~12x ~2x 0.1^ 0.02^
chain 5 chain 5

Leading national Small regional

0.3# ~29x ~2x 0.1# 0.01#
chain 6 chain 6

• EBITDA multiple is in the range of ~7x to ~29x

• Revenue multiple is in the range of ~1x to ~6x

Note(s): Target revenue and EBITDA based on FY21 revenue; *Based on FY22 revenue; ^Based on FY23
revenue; #Cost of acquisition has been extrapolated for 100% stake, Based on FY20 revenue

Exhibit 6.3.2

M&A has been driving growth for national chains in India

• Major players acquire regional firms for rapid market entry

Expansion into
new geography • Strategy targets wider customer base and market expansion

Increasing market share • National chains target regional players for zonal expansion
in existing geographies • Acquisitions enhance city-level presence and competitive edge

Access to resources / • Boosting product offerings and service capacities

new capabilities • Expanding collection centers and testing labs for improved TAT and patient volumes

© Praxis Global Alliance 52

National chains strategically acquire regional players, swiftly entering new markets and expanding without building new infrastructure.
This broadens their customer base, and provides them with access to local expertise and market knowledge. M&A enhance the local
presence, increasing brand recognition and customer touchpoints for added convenience. Acquiring labs optimizes logistics, thereby
improving turnaround times. Additionally, mergers provide access to new technologies, expanding test offerings and enhancing their
value proposition. This diversification attracts new customers while improving operational efficiency and capacity, potentially reducing
costs and enhancing service delivery.

Exhibit 6.3.3

Major players are trading at EBITDA multiple of ~10-30x

Player EBITDA multiple Revenue multiple

Leading national chain 1 ~22x ~6x

Leading national chain 2 ~29x ~8x

Leading national chain 3 ~9x ~3x

Leading national chain 4 ~19x ~5x

6.4 Navigating price pressures through enhanced operational efficiency in

diagnostics chains
In the competitive landscape of diagnostic services, chains are encountering increasing pressure to offer cost-effective solutions without
compromising on quality. This market dynamic necessitates a rigorous evaluation and enhancement of operational efficiency across the
value chain to safeguard margins.

• Registration and booking: The first step in the customer journey has seen a digital transformation with faster system registration and
error-free data capture. Ensuring adequate medical records and test details at this stage can significantly reduce downstream errors
and inefficiencies

• Collection point management: Diagnostics chains have optimized customer wait times through better capacity planning and
rostering. The quality of sample collection is a critical factor, with phlebotomists being rostered and scheduled to avoid errors, and
address home collections more accurately

• Logistics and sample movement: The movement of samples from collection points to processing is a logistically complex opera-
tion. Chains are implementing advanced tracking and cold chain management systems to ensure sample integrity, coupled with
sophisticated route planning to reduce transit times

• Processing efficiency: Within the lab, operational efficiency is being driven by digitization. This includes timely lab scan-ins and
scan-outs, faster sample sharing between departments, and automation to expedite the process throughput without sacrificing
accuracy

• Customer service: On the customer service front, internal complaint management systems have been streamlined to handle queries
efficiently, with call centers using advanced operational techniques to enhance customer care

© Praxis Global Alliance 53

 Exhibit 6.4

Increasing downward pressures on prices have forced diagnostics chains to evaluate and improve
operational efficiency to maintain margins

Operational efficiency

Registration Collection point Logistics (sample movement) Processing Customer service

Booking Customer Sample Sample Network In lab sample Department Internal

Tracking
info wait time collection packaging planning movement testing efficiency complaint

• Faster • Capacity • Phelbo • Bundling • Rostering • Visibility • Timely lab • Digitization of • Internal
registration planning rostering of and and scan-in and people, shift, complaint
in system • Rostering and samples scheduling traceability scan-out and sample channel
• Error free and schedul- • Accurate of field of sample • Faster processes efficient
demogra- schedul- ing bundling executive movement sample with labs query
phy and ing • No check • Fleet • Cold chain sharing • Test management
test details • Accurate deficiency manage- maintained automation • Call centre
• Adequate address or error ment properly • Quality ops and
medical for home • Quality of • Catchment • No audits customer
records collection venipunc- design mishandling care
ture • Route of vials
planning

6.5 Emergence of economies of scale

The emergence of economies of scale in the diagnostics sector can be observed as the industry experiences growth and advancements in
technology. As diagnostic services expand and technologies evolve, several factors contribute to the realization of economies of scale in
this sector.

6.5.1 Lower margins

EBITDA margin is a key financial metric that measures a company's operating profitability by examining its ability to generate earnings
from its core business operations. Over the past five years, a concerning trend has emerged in the financial performance of prominent
national chain laboratories, as evidenced by a consistent decline in their EBITDA in Exhibit 6.5.1.

• Exhibit 6.5.1 illustrates that the declining margins are driven by a convergence of factors such as intense competition, high operating
costs, a volume-based business model, and the impact of regulatory frameworks and price-capping by the government. Exhibit 6.5.1
also breaks down the cost structure of a diagnostics lab. The fixed costs of a lab consist of the man power salary, pathologist salary,
and rent. These costs are approximately 43% of the total costs for a lab. Hence, as growing downward price pressures are squeezing
margins, diagnostics chains need to prioritize economies of scale to sustain growth

© Praxis Global Alliance 54

 Exhibit 6.5.1

As growing downward price pressures are squeezing margins, diagnostics chains need to
prioritize economies of scale to sustain growth
EBITDA margin for labs
(%, FY19-23)

30% 29%
29% Parameter Description
27% 28%
National
na l c ha in
chain 1

• Highly competitive, with

N a tio

FY19 FY20 FY21 FY22 FY23 Intense numerous small and large
competition players squeezing profit
margins
27% 29% 33% 29% 27%
National

• Running a diagnostics lab

chain 2

involves significant
High operating overhead costs, including
FY19 FY20 FY21 FY22 FY23 costs equipment maintenance,
staff salaries, and
consumables
19% 21% 25%
18%
National

17% • Many labs in India rely on a

chain 3

Volume-based high-volume business

business model model, offering low-cost
FY19 FY20 FY21 FY22 FY23 tests to attract patients

42% 43% 38% 42% • Government regulations

24% and price capping on
National
chain 4

Regulation and
price capping diagnostic tests limit the ability
of labs to set competitive
FY19 FY20 FY21 FY22 FY23 prices

Cost structure of a lab

(%)
100% Man power salary,
pathologist salary
6% and rent are fixed
costs
12%

17%

20%

Rent
Sample acquisition cost
45%
Pathologist salary
Man power salary
Reagent and consumables

Cost structure of a lab

© Praxis Global Alliance 55

 6.5.2 Scale drives economies: Pathology lab
A critical metric for evaluating financial performance is unit economics. Unit economics delves into the direct costs and revenues
associated with a single unit of a product or service, providing valuable insights into the profitability of individual centers within an
organization. In this comparative analysis, we scrutinize the unit economics of a national chain lab, a standalone lab and a small hospital
lab to illuminate the disparities in their financial performance. Exhibit 6.5.2 illustrates that a national chain lab exhibits 2x the EBITDA and
7x the ROI as that of a small private hospital.

Exhibit 6.5.2

Scale drives economies in a pathology lab; a national chain lab has a 2x EBITDA and 7x ROI
compared to a small private hospital

Unit economics Small hospital lab

National chain lab Standalone lab
(monthly) (Private standalone)

CAPEX1 INR 5,600K INR 465K INR 1,200K

% of gross % of gross % of gross

Financial metrics Value Value Value
revenue revenue revenue

200-220 - 20-30 - 10-20

Number of daily patients (#)

AOV per patient (INR) 1.1K - 0.6-0.8K - 0.8-1.2K

Gross Revenue (INR) 6,615K 100% 525K 100% 450K

COGS (INR) 1,918K 29% 194K 37% 270K 60%

Employee cost (inc. phlebo) (INR) 1,558K 24% 126K 24% 45K 10%

Lab rent (INR) 265K 4% 26K 5% 32K1 7%

Logistics/sample acquisition charges 529K 8% 32K 6% - -

(INR)

Miscellaneous expenses (INR) 662K 10% 63K 12% 50K 11%

EBITDA (INR) 1,654K 25% 84K 16% 54K 12%

PAT* (INR) 996K 15% 48K 9% 30K 7%

ROI (%) ~213% ~123% ~30%

Pay back period 6 months 10 months 40 months

Top line growth Cost heads Return metrics

Note(s): Medium workload lab has been considered for national chain lab; small hospitals typically have a ~5-7% share in gross lab earnings, in lieu of lab rent;
Miscellaneous expenses include utilities, software rent, maintenance, waste disposal, office supplies, and training and development cost; ¹CAPEX includes cost of
equipment, infrastructure, licenses, certifications, initial supplies and staff training; *tax rate assumed at 30%

© Praxis Global Alliance 56

 6.5.3 Scale drives economies: Radiology lab
A similar exercise was conducted for a CT unit in standalone imaging centers, national imaging chains, medium hospitals and large
hospitals. Exhibit 6.5.3 illustrates the important costs and expenses incurred by each customer segment.

It has been found that a CT unit in a large hospital has 8x EBIDTA and ROI compared to a standalone imaging centre. By utilizing the
inference that scaling up improves the financial performance of a diagnostics lab, the diagnostics player can drive sustained profitability
and operational excellence.

Exhibit 6.5.3

Scale drives economies in radiology as well; a CT unit in a large hospital has 8x EBIDTA and ROI
compared to a standalone imaging centre

Standalone imaging National imaging Medium hospitals Large hospitals (private

centers chains (private standalone) /government/chains)

CAPEX CT unit > 2-4 slice machine, 4-16 slice machine, 16-32 slice machine, 32+ slice machine,
INR 80 Lakh INR 1.1-1.5 Crore INR 1.3-1.8 Crore INR 1.8-6.0 Crore

• 4 scans per day, • 15 scans per day, 450 • 25 scans per day, 600 • 30 scans per day, 900
Volume 120 in month in month in month in month

ASP • INR 3.3K • INR 3.6K • INR 3.3K • INR 5.8K

Radiologist cost, • 41% of revenue, • 44% of revenue, • 27% of revenue,

• NA
(# of radiologists) (2 radiologists) (3 radiologists) (3 radiologists)

Incentive or Patient • 19% of revenue as • 1% of revenue as • 2% of revenue as • 6% of revenue for the

acquisition cost (PAC) PAC, referrals 65% incentive* incentive* marketing department
•

• 7% of revenue, • 6% of revenue, • 6% of revenue, • 8% of revenue,(6

Staff costs (1 technician and 1 (2 technicians and 3 (5 technicians and 4 technicians, 4 support
support staff support staff) support staff) staff + Bio med team)

• ~42% of revenue, • ~26% of revenue, almost • 18% of revenue, • 11% of revenue,

almost 36% is rent, 20% is rent, maintenance, ~12% is rent, ~6% is rent,
Other costs
maintenance, and and utilities maintenance, and maintenance, and
utilities • utilities utilities
• NA, no loan or
EMI • 26% of revenue • 8% of revenue • 5% of revenue financing

• 48%, 8x time of
EBIDTA (%) • 6% • 19% • 25%
standalone
•
ROI* (%) • 14% • 56% • 79% • 110%

Pay back • 7 years • 1.8 years • 1.3 years • 0.9 years

Top line growth Cost heads Return metrics

Note(s): Other costs includes rent and maintenance and services, utilities, medical supplies and miscellaneous;
KUB scans – Kidney, Uterus and Bladder; *incentive of INR 300 for 15% of cases; *tax rate assumed at 30%

© Praxis Global Alliance 57

 6.5.4 Scale drives operating leverage
Exhibit 6.5.4 illustrates that the diagnostics market consists of multiple players in the value chain.
On the supply side, economies of scale allows diagnostic labs to procure high quality equipment at lower prices, get favourable financing
terms and utilise their high bargaining power. On the demand side, scale allows labs to access channels that increases their patient footfall
and patient management solutions. On the operations side, economies of scale allows for lower operation costs, better negotiations, and
access to digital solutions.

Exhibit 6.5.4

With the market seeing a more evolved ecosystem, scale can drive significant operating leverage

Equipment Financing Lab Patient Patient Clinical and non- Maintenance

Reporting
purchase options upgrades footfall management clinical staffs services
•Timely •Digital front end to •Diagnostic •Efficient patient •Outsourcing •AMC/CMC • Radiology
upgrades for generate and services management and clinical or at preferential reporting
Banking software and aggregate demand with a focus medical records non-clinical terms software solutions
management competen- with
institutions hardware at on PPP
cies through
for the transfer of
preferential tools OEM images for clinical
rates B2B & B2C PPP model teleconsulta- OEM players purposes
tion
platforms
and
leveraging
tools such as
AI 3rd party
OEM players Corporate Hospital
Patient Teleconsultation service providers
tie-ups tie-ups engagement tools
platforms
• Timely upgrades for software and hardware
at preferential rates Software providers
• Effective solutions from OEM such as pay AI reporting tools
per scan, leasing, etc.
Other players • Sourcing of new equipment at competitive
rates
• Refurbished equipment at competitive rates Diagnostic lab •Third party service for CMC at competitive rates

Drivers
Procures high Easier and Utilize their high Access to a Deploying Outsourcing Can negotiate Can deploy
quality favourable bargaining wider base via efficient patient allow for lower better terms for digital solutions
equipment from financing terms power to B2B/ B2C management employee cost maintenance for reporting
OEMs at lower enabling cheaper command channel and solutions allows for scaled services applications
prices funding preferred rates PPP models cost reduction players
allowing higher and enhanced
footfall patient
experience

© Praxis Global Alliance 58

 6.6 Emergence of new clinical needs and development
6.6.1 Specialized tests
Specialized tests such as Microfluidics POC, Liquid biopsy and genomics are gaining increasing attention.
The Microfluidics POC test market is projected to grow at a CAGR of 13% in the next 5 years. This growth is fueled by its ability to enable
early disease detection through the analysis of biomarkers and genetic material. The test also offers high sensitivity and specificity,
detecting low concentrations of analytes accurately. Additionally, the miniaturized and portable nature of the devices reduces sample
and reagent consumption while enhancing ease of use, making Microfluidics POC tests an efficient diagnostic solution.

The Liquid Biopsy test market is poised to grow at a CAGR of 22% in the next 5 years. This growth is driven by its ability to enable early
cancer detection through the analysis of CTCs and cfDNA in blood samples. Additionally, it offers a non-invasive and convenient
alternative to traditional tissue biopsies, providing patients with a less intrusive diagnostic option. The test also delivers real-time molecular
profiling of tumors, enhancing precision in diagnostic insights. Overall, liquid biopsy tests emerge as a pivotal tool in advancing cancer
diagnostics.

Exhibit 6.6.1 Exhibit 6.6.2

Microfluidics POC market is expected to grow Liquid biopsy market is expected to grow at CAGR
at CAGR of 13% between CY23 to CY28 of 22% between CY23 to CY28

Microfluidics POC test market Liquid biopsy test market

(US$ M, CY22–28P) (US$ M, CY22–28P)

1,118

293
CAGR
13%

CAGR
612 22%
547

110
90

CY22 CY23 CY28P CY22 CY23 CY28P

6.6.2 Genomics testing market

The genomics testing market is poised for a robust CAGR of 15% in the next 5 years. It meets the demand for personalized medicine
by enabling healthcare providers to tailor treatment plans based on individual genetic profiles. The test also facilitates precise treatment
selection through the identification of specific genetic markers, enhancing therapeutic efficacy. Additionally, genomic testing plays a key
role in risk assessment and management by identifying inherited genetic risks for diseases, contributing to proactive healthcare strategies.

Exhibit 6.6.3 illustrates that the genomics testing market in India is expected to grow at 15% to reach ~US$ 200M by FY27.

© Praxis Global Alliance 59

 Exhibit 6.6.3

Genomics testing market in India is expanding and has potential to reach ~US$ 745M
by the end of FY27
Genomics testing market in India
(US$ M, FY18–27P)

~750

• 20% of newborns undergo pre-

natal genetic screening
~400

• 10% of newborns undergo

pre-natal genetic screening Optimistic
case 2
Optimistic
case 1

CAGR
15%
~200

~100
53

FY18 FY22 FY27P

Note(s): Adult genetic testing penetration is considered to be 0.1% and 0.2% for optimistic case 1 and optimistic case 2 respectively

There are three majar points driving the genetic testing market in India, as illustrated in Exhibit 6.6.4:

Exhibit 6.6.4

Key growth drivers for genomics testing market in India

• ~1.5M new cases of cancer recorded in CY22

Increase in chronic
and genetic diseases • 1 in 2,500 patient is diagnosed with a rare disease; 70+ million people in India are suffering
from rare diseases
• Progression of Indian pharma on the innovation ladder
Technological
• NGS aiding in reducing costs and early diagnosis
advancements
• Initiative by GOI to map 10k+ genomes by CY23
• Pre-natal genetic testing advised for the identification of genetic illnesses transmissible
Increase in D2C to offspring
• Recreational genetic testing

© Praxis Global Alliance 60

 6.6.3 Investments in genomics market in India
The genetic testing market in India is witnessing a surge in investment, with companies like LifeCell and MedGenome securing substantial
funding in recent rounds. Angel investors and venture capitalists are pivotal in funding early-stage startups such as Acrannolife and
Clevergene, indicating growing confidence and interest in India's genetic testing industry.
Overall, the Indian genetic testing market is poised for significant growth in the coming years, driven by increasing investment, rising
awareness, and technological advancement.

Exhibit 6.6.5

Genomics focused companies have been consistently attracting investment from PE / VC firms

Company Latest funding Revenue* Funding

Investors
round (US$ M, FY22) (US$)

Acrannolife CY23 0.7 422K Angels - Aman Gupta, Peyush Bansal

MedGenome CY22 28 219M Novo Holdings, Sofina

Redcliffe Genetics CY22 10 61M LeapFrog, IDG Ventures

LifeCell CY21 32 (FY21) 38M Orbimed, Helion Venture Partners

Haystack Analytics CY21 0.3 1.4M STRIVE, Aroha Technologies

MapMyGenome CY20 14 1.7M Enemtech capital, Angels like Ratan Tata

Clevergene CY20 1 633K Auxano

Oncophenomics CY19 - 606K Omphalos Ventures, T-Hub

SciGenome CY15 0.6 (FY21) 364K Department of Biotechnology

Note(s): *Includes revenue from other services apart from genomics

© Praxis Global Alliance 61

 6.6.4 Adoption of preventive and wellness related tests
.2
The total market of pathology is anticipated to reach US$ 14.4B by FY28P. Preventive tests are expected to experience robust growth
with a CAGR of 18%, increasing their share in all diagnostics tests to approximately 12% by FY28. In contrast, sickness-related tests
are projected to witness a decline in their share, accounting for around 88% of all diagnostics tests, while still growing at a CAGR of
14%.

Exhibit 6.6.6

Preventive tests are projected to grow at a CAGR of 18% to increase their share in all diagnostics
tests to ~12% in FY28

Distribution of pathology tests by type

(US$ B, FY18-28P)
CAGR CAGR
FY18-23 FY23-28P

4.2 7.5 14.4 12% 14%

8% 10% 12% 17% 18%

Lab rent (INR) 92% 90% 88% 12% 14%

(INR)

EBITDA (INR)
PAT* (INR) FY18 FY23 FY28P

ROI (%) Sickness related Preventive and wellness

Consumers are showing a growing inclination toward adopting preventive and wellness-related tests. This trend reflects a proactive
approach to healthcare, where individuals are becoming more engaged in monitoring their health and promoting overall well-being.
Preventive and wellness tests provide valuable insights into one's health status, risk factors for various diseases, and opportunities for
lifestyle modifications to maintain optimal health. As awareness about the importance of preventive care increases, more consumers are
seeking out these tests as part of their healthcare regimen, contributing to a shift towards proactive health management strategies.

• Increasing awareness and a rise in disposable income serve as key drivers for preventative tests. The heightened awareness,
particularly post COVID-19, emphasizes preventive healthcare to bolster immunity and detect diseases in their early stages

• Rise in income among the Indian middle class enables higher healthcare spending. Section 80D of the Income Tax Act further
incentivizes preventive health check-ups by offering income deductions of INR 5-7K

• Government initiatives, including the National Health Mission, contribute to the development of new health and wellness

• Online aggregators are shifting their focus towards the emerging preventive and wellness segment of diagnostics

• Advances in the medical field, such as preventive genetic testing, are also encouraging more individuals to prioritize preventive
healthcare

© Praxis Global Alliance 62

 6.6.5 Self-testing and wellness devices
.2
The growing emphasis on health awareness, coupled with factors such as convenience, affordability, and technological advancements,
has spurred the widespread adoption of self-testing devices. With an increasing understanding of the importance of monitoring one's
health, individuals are actively seeking ways to track their health parameters, leading to a surge in demand for self-testing devices. These
devices offer unparalleled convenience, accessibility, and affordability, allowing people to monitor their health without the need for
frequent visits to healthcare facilities. Moreover, the rising prevalence of lifestyle-related diseases has further fueled the adoption of
self-testing devices, as individuals seek to monitor crucial parameters like blood sugar levels and blood pressure. Rapid advancements in
sensor technology, data connectivity, and mobile applications have significantly enhanced the user experience, making self-testing
devices more intuitive and user-friendly. Additionally, urbanization and the expansion of the middle-class population have contributed to
increased disposable income, making self-testing devices more affordable and accessible to a wider demographic.

Exhibit 6.6.7

Rising health awareness, convenience and affordability and the rise of lifestyle diseases are
the key drivers for self-tests

• More attention paid to preventive healthcare post COVID to build immunity and detect
Increasing awareness
diseases in early stages
• Rise in income of the Indian middle class allowing for higher healthcare spend
Rise in disposable • Section 80D of Income Tax Act allows income deduction of INR 5-7K for preventive health
income
check-ups

• Government’s push towards developing new models for health and wellness as part of the
Government initiatives
National Health Mission

Shifting focus of
(INR) • Focus of online aggregators is moving towards the emerging preventive and wellness
online aggregators segment of diagnostics

Advances in the • Advances in the medical field such as preventive genetic testing will push more people
medical field towards preventive healthcare
PAT* (INR)
ROI (%)
• Tracking + Teleconsultation + Diagnostics + E-Pharmacy: Companies providing comprehensive solutions that include health
tracking, remote teleconsultation with healthcare professionals, access to diagnostic services, and online pharmacy services

• Tracking + Teleconsultation + Diagnostics: Companies offering platforms for health tracking, remote teleconsultation services with
medical professionals, and access to diagnostic testing facilities

• Tracking + Teleconsultation: Companies focusing on platforms that enable users to track their health metrics and schedule
teleconsultations with healthcare providers for medical advice and guidance

• Tracking: Companies providing solutions primarily focused on health tracking, allowing users to monitor various health parameters
and track their progress over time

© Praxis Global Alliance 63

 Exhibit 6.6.8

Attractive opportunity has pulled multiple companies into health management and wellness segments

Tracking + Teleconsultation + Tracking + Teleconsultation

Diagnostics + E-Pharmacy + Diagnostics

Tracking + Teleconsultation Tracking

6.7 Emergence of new business models

The diagnostics industry is witnessing a wave of innovation across its value chain, with new business models emerging to revolutionize
how services are delivered:

• Equipment acquisition: This involves the procurement of diagnostic equipment needed for conducting various tests and analysis.
Innovative models may include options like capital purchase, reagent rental, or refurbished equipment procurement to optimize costs
and access cutting-edge technology

• Distribution and logistics: This aspect involves the efficient management and distribution of diagnostic equipment, reagents, and
supplies. Innovative approaches may include hub-and-spoke models, franchise arrangements, or partnerships with local labs to
ensure widespread access and timely delivery of services

© Praxis Global Alliance 64

• Laboratory testing: Laboratory testing encompasses the actual analysis and interpretation of samples collected from patients.
Innovative business models may focus on optimizing workflows, leveraging technology for faster and more accurate results, and
offering a range of testing options tailored to specific needs and preferences

Exhibit 6.7

Innovative business models are emerging across the diagnostics value chain

Increase in chronic
Value chain for
diagnostic player
and genetic diseases
Equipment acquisition Distribution and logistics Laboratory testing

Technological • Capital purchase: Purchase • Hub-and-Spoke: Central lab • Centralized labs: Traditional
equipment for control and with a network of sample business model with on-site
advancements
depreciation benefits collection centers resources and technicians in a
Traditional
• Reagent rental: Tie-up for • Franchise models: Expanding specialized facility.
business model
bundled equipment and reagent reach through entrepreneurs
packages using labs brand, processes,
and quality standards

• Pay-per-use/subscription • PPPs: Partnering with the • HLM labs: Managing

services: Manage demand government to provide centralized labs within
without hefty upfront diagnostic services, often in hospitals focusing on
investments rural or underserved areas high-volume, low-margin
• Refurbished equipment: • B2B: Providing diagnostic business
Procure cost-effective used services to businesses such as • POC diagnostics: Portable
equipment from upgrading clinics, nursing homes, and devices with rapid results at
facilities corporate health programs the point of patient care
• Partial rental model: Hybrid • Tier 2/3+ distribution: • Mobile testing labs: Mobile
model where diagnostic Collaborate with local labs, labs with focused test menu
Emerging business centers pay an upfront cost for set up spoke labs for for on-site testing filling
models equipment and then continue expansion geographic gaps
to make payments through a • Shop-in-Shop(SIS) / • Radiologist-on-Demand:
ROI (%) rental agreement Pickup point(PUP) models: Access to a remote network of
• Technology transfers and Diagnostic labs extend specialized radiologists for
global agreements: beyond clinics by embedding imaging interpretation
Partnerships with international collection facilities in retail
players to license, adopt, or spaces or setting up stand-
co-develop technologies alone / partnered pickup
already proven in other points
markets, avoiding local R&D
investment and accelerating
innovation

© Praxis Global Alliance 65

 6.8 Rising insurance penetration

Exhibit 6.8.1

Health insurance is underpenetrated in India at ~62% of total population as compared to other

developed countries

Health insurance coverage

(% of total population, CY22)

Includes individuals
covered under
AB-PMJAY

100% 99% 100% 100% 100% 100% 96% 99% 97%

92% 95%
89%

62%

India Australia Belgium France Germany Switzerland UK USA Chile Estonia Lithuania Poland Romania

Note(s): Data for India is of FY22; Data for Australia, Belgium, France, Germany, Switzerland, UK and USA is of FY21; OPD cover refers to expenses that do not require
hospitalization; all policy prices based on 27-year-old male living in Metro

In the healthcare landscape, a significant gap persists, with over 70% of middle-income individuals lacking health insurance coverage.
However, strategic government initiatives such as the Ayushman Bharat Yojana and State Government extension schemes play a crucial
role, providing comprehensive hospitalization cover to approximately 69% of the low-income population. Another segment, constituting
around 15% of the population employed in the public sector, benefits from coverage under CGHS and ESIS schemes.

Approximately 14% of the population secures private voluntary health insurance coverage, contributing to a more diversified healthcare
financing model. Despite these efforts, a substantial portion, representing around 38% of the population, remains without health
insurance. For insurers, this presents an untapped market opportunity, encouraging strategic interventions to extend coverage and bridge
existing gaps. Recommendations for innovative insurance products, targeted outreach, and collaboration with government schemes could
be instrumental in addressing this unmet need and enhancing overall healthcare accessibility.

© Praxis Global Alliance 66

 Exhibit 6.8.2

More than 70% of the middle-income individuals are devoid of health insurance; Insurance coverage
per capita is also the lowest for the middle-income individuals

Individuals covered by health insurance by scheme type

(# M) Total ~1,400M

~860M ~320M ~220M

100% Notinsured
Not insured
Not
Notinsured
insured
(will be coveredunder
(will be covered PMJAY
under PMJAY Private Health
Private Health
80% ininfuture)
future) Insurance
Insurance (Retail)
(Retail)
Not
Not insured
insured
60% Employee StateInsurance
Insurancescheme
scheme FY23
Employee State

Private Health
Private Health
40% Stateschemes
State schemes Insurance
Insurance
(Group)
(Group) FY18

20%
PM -JAY
PMJAY scheme
scheme FY13
(Ayushman Bharat – Subsumes
(Ayushman Bharat–Subsumes RSBY)
RSBY) Stateschemes*
State schemes*

0%

Low income Middle income High Income

(US$ 0 – 1.3K) (US$ 1.3K – 2.6K) (US$ 2.6K+)

Insurance coverage 837 2,030

406
per capita (US$)

Insurance coverage per

Total Insurance 491 capita is lowest for 35 402
coverage (US$ B) middle-income individuals

Insurance coverage per capita Not insured

Note(s): *Also includes a few private schemes, calculation estimates based on consideration of maximum of one insurance scheme per capita

6.9 Evolving patient needs

The healthcare industry is experiencing a paradigm shift in patient preferences, particularly in the diagnostics sector. Patients are
increasingly favoring home sample collection services over traditional lab walk-ins, driven by the convenience, efficiency, and enhanced
experience they offer.

• Patients prefer home collection over walk-ins: As depicted in the infographic, the top reasons for choosing home collection
include the convenience of not having to leave home, elimination of waiting times, and ease of booking appointments. Notably, a
significant majority of patients, over 75%, show a preference for home collection. This shift is indicative of a broader trend towards
personalized healthcare services delivered at the doorstep

• Customers are willing to pay extra for value-added services: The second infographic emphasizes that customers are not only
looking for basic services but are also willing to pay a premium for additional value. Services such as transparent booking processes,
consultations with certified medical professionals, and user-friendly report formats are high on the list of desired features. These
preferences signal a growing demand for a more comprehensive, patient-centric approach to diagnostic care

© Praxis Global Alliance 67

 Exhibit 6.9.1

Reasons for customers preferring home collection over lab walk-ins to submit samples

Patients prefer home collection over walk-ins Customers are willing to pay extra for value-
primarily due to convenience and no wait-time added services to make their experience better

Reasons for customers preferring home collection WTP and desired additional value-added services by
over lab walk-ins to submit samples customers while booking tests via online platforms

●
◑
Convenient and hassle free
Willingness to pay/spend (WTP) up to INR 100
No wait time ●
Ease of booking slots ◕
Transparent and systematic
slot booking process ◕

Desired value-added services

◑
◑
Free home sample collection facility Consultation by certified medical
professional at minimal cost
Lack of proximity to labs ◔ Descriptive and user-friendly
◑
Already satisfied with the services ● report format

Proximity of tests centre nearby ◕ Home sample collection facility ◑

Prefer walk-ins as more convenient ◑ Booking experience ◑
Better accuracy of tests data ◑
75%+
◑
Trusted labs don’t have home Prefers home
collection Emerging preference
customers
collection facility Low ◔ ◑◕ ● High
Rest Prefers lab
Concerns about sample getting affected
in transit
◑ customers walk-ins

Better prices ◔

6.9.1 Key influencers in the selection of online healthcare platforms

The digital transformation of healthcare services has empowered consumers to seek medical assistance, diagnostic services, and pharma-
ceutical needs online. A study has highlighted the critical factors influencing user preference for online healthcare platforms, ranging from
consultation to diagnostics and pharmacy services. These insights help in understanding consumer behaviour and preferences in the online
healthcare domain.

• Choosing an online consultation platform: Users prioritize trusted and certified doctors, easy availability of healthcare professionals,
the platform’s brand name, and recommendations from family or friends. 68% of users value trusted and certified doctors and easy
availability of doctors

• Selecting an online diagnostics platform: Accuracy and timely delivery are paramount for users choosing an online diagnostics
service. Users are looking for reliable test results, prompt report delivery, and reasonable pricing. 72% of respondents prioritize accuracy
in test reports, while 68% value the timely delivery of those reports

• Preferring an online pharmacy: In the realm of online pharmacies, timely delivery and cost savings are the leading drivers of user
preference. Consumers also value the ease of returns and the availability of a wide range of products. 79% of users are influenced by
timely delivery, and 67% by the discounts offered, indicating a high sensitivity to cost and service efficiency

© Praxis Global Alliance 68

 Exhibit 6.9.2

Certified doctors, accurate test reports, quick turnaround, competitive prices, discounts and timely
delivery influence the choice of online healthcare platforms

Q. What are the top 4 factors while choosing your Q. What are the top 4 factors while choosing your
primary online consultation platform? primary online diagnostics platform?
[Select up to top 4] (N=141) [Select at least top 4] (N=94)

Reason for preference of online consultation platform Reason for preference of online diagnostics platform
(N=141) (N=94)

Trusted and certified doctors 68% Accuracy of test reports 72%

Easy availability of doctors 68% Timely delivery of reports 68%

Platform’s brand name 51% Pricing 67%
Recommendations from family / 46%
friends User-friendly interface 55%
Lower teleconsultation fees 40%
Brand name of the platform 27%
Coverage of doctors across 37%
specialties Provides test reminders 20%
All modes available–chat / call / 27%
video call Recommended by doctor 15%
Reviews on Playstore / Appstore 23%
Variety of payment options 15%
Waiting time for an appointment 22%

Q. What are the top 4 factors while choosing your primary online pharmacy platform?
[Select at least top 4] (N=145)

Reason for preference of online pharmacy platform

(N=145)

Timely delivery 79%

Higher discounts 67%

Easy returns or exchange 52%
Presence of both medicine and 41%
non-medicine products
User friendly interface 39%

Availability of preferred brands 35%

Brand name of platform 32%

Good customer service 23%

Variety of payment options 13%

Provision of digital health 12%

Provides with refill reminders 7%

© Praxis Global Alliance 69

 6.10 Rising opportunity in tier 2/3+ market
Exhibit 6.10 illustrates a notable disparity in the distribution of diagnostic labs across city tiers in India. Tier 1 cities boast abundant
options, with 399 labs per million people, while tier 2 cities lag behind at 245 labs per million people. The gap widens in tier 3+ cities
and rural areas, reaching a concerning 205 labs per million people.

This disparity highlights unequal access to essential diagnostic services, with tier 1 residents enjoying greater convenience compared to
those in tier 2 and beyond. This accessibility gap may contribute to delayed diagnoses and treatment, exacerbating health issues.

However, this contrast also presents a lucrative opportunity for the diagnostic industry. Expanding into tier 2/3+ cities holds
significant growth potential, both financially and in terms of societal impact. Strategic investments in these regions can bridge the
diagnostic gap, fostering greater equity in healthcare access.

Exhibit 6.10

Labs per million population is lower for tier 2/3+ cities signifying under-penetration

Distribution of diagnostics labs in India

(# per M population, FY23)

399
India urban
average is 272

245

205

Tier 1 Tier 2 Tier 3+

Labs by tiers 52,698 31,269 41,034

Labs per city 5,270 481 88

6.10.1 Expansion plans of major chain labs in tier 2/3+ cities

• Metropolis: Metropolis expands with 16 labs and 506 collection centers in tier 2/3+ cities by FY22. Acquisition of Hitech
Diagnostics (31 labs, 68 collection centers) reinforces commitment to comprehensive services and strategic growth

• Dr. Lal Path labs: DLPL strategically focuses on tier 2/3+ towns in North and East India, emphasizing metros/tier 1 cities in
South/West India. Suburban Diagnostics acquisition (38 labs, 177 collection centers) reinforces commitment in Maharashtra.
DLPL’s proactive expansion efforts in South India exemplify its dedication to sustained growth

• Thyrocare: Thyrocare adopts asset-light expansion, leveraging branded franchisees. Focus on international markets, particularly
Africa, aligns with global expansion. Partnerships with the government, active participation in health tenders for public healthcare
initiatives

© Praxis Global Alliance 70

• Redcliffe Labs: Redcliffe Labs aims to add 250 labs and 10,000 collection centers by CY25, aligning with the vision for extensive
diagnostic services

• Krsnaa Diagnostics: Krsnaa Diagnostics strategically expands pathology business using the PACE model, with a primary focus on
tier 2+ cities. Plans to set up 600 collection centers through franchisee model by FY24 for widespread accessibility

• Vijaya Diagnostics: Vijaya Diagnostics focuses on tier 2/3+ cities, combining company-owned centers and selective acquisi-
tions. Reinforces hub-and-spoke model, concentrating efforts in Eastern and Southern India for balanced and sustainable growth

• Mahajan Imaging: Mahajan Imaging prioritizes accelerated growth in pathology while expanding existing radiology opera-
tions. Ventures into "integrated diagnostics" combining various services for a holistic approach to patient care

• Medall Diagnostics: Medall Diagnostics strategically targets tier 2/3+ cities in Tamil Nadu for focused expansion, with plans to
open 300-400 centers in South India, spanning Karnataka, Andhra Pradesh, Telangana, and Kerala. Primary focus on tier 2/3+
expansion aligns with the commitment to comprehensive healthcare solutions and extended geographic reach

6.11 Government and regulatory impact

6.11.1 Government has been actively promoting PPPs
Exhibit 6.11.1 illustrates the distribution of government labs and hospitals across states in India, shedding light on regional focus. The
government is actively promoting PPPs to address infrastructure and service delivery challenges in the diagnostics sector. Government labs
and hospital labs are projected to grow from 18,000 in CY23 to approximately 29,000 in CY27, indicating significant opportunities,
primarily through PPP models. The projected CAGR of 12% highlights the potential for growth in this sector.

Exhibit 6.11.1

Government labs volume is expected to grow at 12% CAGR between CY23–27

Government labs and hospital labs

(# K, CY23–27P)
CAGR
CY23-27P

29 12%

12 10%
18

17 14%
10

CY23 CY27P

Labs Hospital labs

© Praxis Global Alliance 71
 Exhibit 6.11.2

Diagnostics players can capitalize on the expanding opportunities created by government initiatives

National Chain Labs Regional Chain Labs

Chain 1 Chain 2 Chain 1 Chain 2 Chain 3

Haryana
Himachal Pradesh

Jammu and Kashmir

North Punjab
Rajasthan
Uttar Pradesh

Assam
Jharkhand
Manipur
East Meghalaya
Odisha

Tripura
West Bengal
Andhra Pradesh

Karnataka
South
Tamil Nadu

Telangana
Gujarat
West
Maharashtra
Centre Madhya Pradesh

Note(s): The list is not exhaustive and only indicative as of CY21

6.11.2 Make in India is incentivizing foreign players to setup manufacturing base in India
The Make in India initiative aims to bolster domestic manufacturing and enhance the competitiveness of Indian companies by offering
products and services at affordable prices. To incentivize high-value domestic manufacturing, the government has introduced initiatives
such as the Production Linked Incentive (PLI) scheme, covering 14 key manufacturing sectors. Additionally, the Government e-Marketplace
(GeM) platform facilitates easier access for Indian manufacturers to engage in public procurement with government entities. Quality
assurance for Indian medical devices is ensured through the Indian Certification for Medical Devices (ICMED), aligning standards with
global benchmarks. The Digital Health Incentives Scheme (DHIS) has provided incentives totaling ~US$ 585K to around 120 health
facilities and 7 healthtech companies by June CY23. Furthermore, the establishment of bulk drug parks and medical device parks is being
promoted, supported by a financial outlay of around US$ 366M until FY25.

© Praxis Global Alliance 72

 Exhibit 6.11.3

Foreign players setting up local manufacturing base

Players Existing undertakings Future plans

• Inaugurated a manufacturing facility in • Setting up a new campus in

Vadodara to produce urinalysis strips Bengaluru-integrated R&D centre
and biochemistry reagents and manufacturing hub-investing
• New production line at the Bengaluru ~US$ 159M
facility to manufacture medical
imaging products
Western MNCs

• Opened a manufacturing facility in

-
Gurugram for testing kits and reagents

• Opened an integrated R&D and • Establishing another formulation

(INR)
manufacturing facility in Hyderabad’s unit in Hyderabad for
Genome Valley to develop new pharma manufacturing its product Pentasa
products (Mesalazine), investing ~US$ 61M

PAT* (INR) • Opened a manufacturing facility in

-
Mundra, Gujarat for medical cold
ROI (%) chain products

• Has an established reagent production • Establishing a new manufacturing

factory in Baddi, Himachal Pradesh base in Sanand II Industrial Estate,
Gujarat, for reagents and devices
Asian MNCs

• Opened hematology and other

-
medical reagents manufacturing
facilities in Nagpur and Haridwar

• Has an established dialyzer and • Signed an MoU worth US$ 201M

medical devices manufacturing plant for setting up a glass tubing
in Khandala, Maharashtra production facility in Pune

6.11.3 Digital Personal Protection Act, 2023

• Small diagnostic centers: Limited resources to invest in new data privacy and security technologies could place them at a competitive
disadvantage

• Large diagnostic centers: While they possess resources for compliance, navigating complex data localization norms and restrictions
on cross-border data transfers could hinder their global operations

• Global diagnostic companies: While boasting vast resources and expertise, they must now contend with stringent data localization
norms and potential restrictions on cross-border data transfers, potentially impacting their global operations and international
collaborations

Exhibit 6.11.4 gives a detailed outline of the opportunities and challenges presented by the DPDPA

© Praxis Global Alliance 73

Exhibit 6.11.4

Digital Personal Data Protection Act is expected to have significant implications for diagnostics companies

Small diagnostic centers Large diagnostic centers Global diagnostic companies

Unorganized players

• Limited resources to invest in • Significant costs involved in • Navigating data localization

new technologies for data transitioning their existing data norms and restrictions on
privacy and security systems and protocols to be cross-border data transfers
management compliant with new data privacy • Adapting global data models
Competitive disadvantage norms and technologies to meet
India-specific regulatory needs
Challenges

compared to larger counter- • Restrictions on sharing Indian

parts patient data with their global
• Constrained abilities for data partners or third parties due to
sharing with third parties to localization requirements
whom services are outsourced
due to consent requirements

(INR)
• Act as localized databases to • Develop proprietary population • Leverage experience of data
enable patients to share data health datasets and analytics compliance from EU, US markets
models
Opportunities

with global companies while to adapt processes for India.

retaining local control • Acquire smaller diagnostics centers • Offer proprietary algorithms
PAT* (INR)
to gain scale and access regional / and technologies for efficient
ROI (%) tier 2 markets consent management and
compliance

• Focus consent efforts on • Invest in technologies to capture • Set up Indian data subsidiary or
specific high-priority data as per compliance and derive acquire Indian player to house
datasets rather than collecting insight from data analytics while domestic data to comply with
Way forward

all patient data. protecting individual privacy. localization norms

• Collaborate on efficient - Appoint data protection officers • Modify consent protocols and
consent management and and audit protocols to ensure data models to align with the
data anonymization compliance across massive data regulatory framework in India
technologies operations

© Praxis Global Alliance 74

About us and what we do for
diagnostic companies
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Acknowledgements
Ayush Singh Vaibhav Agarwal
Senior Consultant Senior Consultant
Praxis Global Alliance Praxis Global Alliance
Senior healthcare leadership
team at Praxis

Madhur Singhal Aryaman Tandon Anjan Bose

Managing Partner Managing Partner Practice Leader and Advisor – Healthcare
Financial Investors Group, Healthcare, Technology & Internet, Founder and Secretary General,
Healthcare, Pharma & Life Sciences Automotive, Energy Oil & Gas and Utilities NATHEALTH
Consumer & Digital

Garima Malhotra Prabal Chakraborty

Associate Partner Practice Leader and Advisor – Medical Devices & Cons.
Healthcare Ex-Boston Scientific Company,
J&J Medical India
Connect with us
We will be happy to share perspectives

Aryaman Tandon
Managing Partner
E: [email protected]

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Associate Partner - Healthcare
E: [email protected]

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