How High-Tech Innovation Is Advancing India’s Healthcare Capabilities

Posted: 25th October 2022 12:36

The Covid-19 outbreak in 2020 triggered a prolonged period of economic disruption and necessitated several sectors to shift towards digitization to stay operational and competitive. Among those impacted, the healthcare sector faced huge challenges managing caseloads and providing normal healthcare services.

As pandemic-induced lockdowns across India caused mobility restrictions, the public and service providers turned to online platforms for patient-doctor consultations, diagnostics, and fitness and wellness solutions.

The aftermath also reminded India of the need to be self-reliant in the healthcare sector. The pandemic exposed shortcomings in the country’s healthcare infrastructure and the danger of import dependencies for critical items like bulk drugs (active pharmaceutical ingredients) and medical equipment, especially as major export markets like China closed off their supply chains due to a zero-Covid policy. Since then, the government and industry players have responded – through policy implementation and investments to improve and expand existing business models, respectively.

The federal government has launched a slew of measures, including the Telemedicine Guidelines 2020, Production-Linked Incentive (PLI) schemes for medical devices, and various sub-schemes for the promotion of pharmaceutical segments. Meanwhile, private players have begun offering innovative patient-centric products.

Healthcare Business In India: Key Growth Drivers

Changes In The Healthcare Sector In India: Rise Of HealthTech

In India, the traditional healthcare journey across pharmacies, doctors (for consultation), and diagnostics centers has witnessed a paradigm change. Factors like automation, digitization, and tech-enablement have revolutionized the way one perceives healthcare and expects services.

New healthcare technology (HealthTech) businesses like Practo, Healthkart, 1mg, DoctorInsta, Lybrate, etc. are focusing on closing key supply-demand gaps in the healthcare sector, such as by promoting services for early detection of disease, minimizing mental stress, detecting and preventing hereditary abnormalities, and enhancing consumer lifestyle.

While the traditional healthcare system has been fraught with constraints, such as lack of equitable accessibility and affordability of quality care, the emerging digitized healthcare system has begun offering convenient, accessible, and low-cost services.

These HealthTech businesses employ cutting-edge technologies to ensure quick access to up-to-date medical information, genetic condition histories, and lifestyle choices to facilitate effective and fast treatment.

Overview Of India’s HealthTech landscape

The Indian HealthTech industry, led by players like Pharmeasy, Reliance-backed Netmeds, Tata group-backed 1mg, Medlife, mfine, and MeddiBuddy, etc., is propelled by various trends. These include:

Significant expansion of the digital infrastructure
Emergence of paratelemedicine solutions
Use of AI-integrated software
Wider insurance coverage for remote health services
Access to one-stop healthcare solutions
Rise in consumer awareness regarding health

The HealthTech market will be further boosted in upcoming years with the continuing rise in consumer tech awareness, diversified eHealth models, advancements in technology, a growing number of eHealth start-ups, and support from the government.

According to data by INC42, the Indian HealthTech market, which stood at US$500 million in 2010, reached its tipping point during the Covid-19 outbreak, with an estimated market size of US$10.6 billion in 2022.

The segment is expected to grow exponentially to reach a market size of US$21.3 billion by 2025, acquiring a 3.2 percent share in the global HealthTech market.

A report by Red Seer estimates that the gross merchandise value (GMV) of the Indian e-health industry will reach US$9-12 billion by 2025 and US$40 billion GMV by 2040.

Telemedicine And Online Healthcare: Value Proposition Model

Investments In India’s HealthTech Industry

The HealthTech industry in India secured private equity and venture capital investments worth nearly US$1740 million in 2021, marking a significant leap from US$1.4 million in 2014. Pharmeasy, the online pharmacy and medical store, witnessed the highest influx of investment of about US$650 million in 2021. It must be noted that most of these deals were concentrated in metropolitan cities. 37.9 percent of the total deals took place in Bengaluru (Karnataka), followed by 23.6 percent in Delhi-NCR, and 21.3 percent in Mumbai (Maharashtra). Other cities which have emerged in the HealthTech map of India are Pune (Maharashtra), Chennai (Tamil Nadu), and Hyderabad (Telangana).

Another notable trend in the Indian HealthTech funding landscape is the attractiveness of business-to-business – business-to-consumer (B2B-B2C) models among investors. While B2B-B2C business HealthTech start-ups raised US$756 million during 2014-2020, B2B remained the least funded segment in India. In 2020, B2C based HealthTech start-ups received a funding of US$194.8 million while B2B start-ups received merely US$6.8 million.

One of the leading investors in the Indian HealthTech sector is Accel Partners, having participated in over 12 deals with investment in start-ups like Cure.fit (now Cult.fit), PlusPin, Dailyrounds, Cure Joy, etc. Other notable investors include Sequoia, Matrix, Nexus, Pi Ventures, IDG Ventures India, etc.