With the Rs-10 billion Indian oncology market expected to grow at a rate of 21 per cent for the coming five years, a slew of standalone and dedicated oncology setups within hospitals are in the pipeline to cater for 2.5 million cancer patients, says Sonal Shukla
The growing number of patients seeking treatment for cancer has made hospitals realise that cancer treatment is an important area for growth. "Today there is more awareness about cancer and people are willing to go to recognised centres for cancer treatment. People, particularly in urban India are recognising the fact that cancer patients can lead a normal life, just like with any other chronic disease. Hence more and more people are willing to undergo therapy, which is a positive trend," opines Dr BS Ajai Kumar, Chairman, HealthCare Global Enterprises (HCG), South Asia's largest cancer care network.
Cashing in on this growth trend, multispecialty hospitals are investing in cancer care and even standalone cancer care hospitals are being set up. The Indian oncology treatment market is thus estimated to be in excess of Rs 10 billion and is expected to grow at a rate of 21 per cent for the coming five years.
Interesting Openings
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 "In the past, Indian hospitals hesitated in making large investments because of a long gestation period"
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"The future is going to be in tier II and III cities for viability, and they would be the preferred place ofEver-increasing unmet demand coupled with constantly rising cancer cases has incited many healthcare and pharmaceutical companies to make oncology their prime focus area. Despite increased awareness about the disease in the masses in general, delay in approaching doctors for treatment has not reduced yet. "More than 70 per cent of the cases reporting for diagnostic and treatment services are in the advanced stages of the disease, which has led to high mortality rates amongst patients in India," shares Pradip Kanakia, Executive Director, KPMG.
As a majority of the cases being treated in India are advanced cancer cases, there is still a significant market potential in the preventive and early detection space. On the other hand, lack of promising treatment in chemotherapy has opened up opportunities in radiotherapy and surgical therapy, which require a well-established hospital infrastructure. Being very capital-intensive prevents the entry of smaller players to the market and thus makes it a safer investment option for the large hospital players.
Dr Rajesh Mistry, Kokilaben Dhirubhai Ambani Hospital, Mumbai, opines, "Traditionally surgery and radiation have been the cornerstones of cancer treatment. However, now almost all patients (solid and haematolymphoid cancers) will at some point require chemotherapy - in addition to conventional surgery and radiation. All the three modalities will contribute to growth of the cancer treatment market in the Indian healthcare industry."
On the pharma front, lack of any significantly promising molecule in the pipeline for chemotherapy is also believed to be driving regimens such as radiotherapy and surgical therapy for cancer treatment. The technological revolution in cancer treatment and delivery too has given a major thrust to this segment in India. Dr HKV Narayan, Medical Superintendent, Tata Memorial Hospital, Mumbai, explains, "Today technology like CyberKnife and Novalis Tx offer non-invasive radiosurgery. PET-CT scan and other diagnostics have increased the speed and accuracy of diagnosis and improved identification of recurrence." The latest radiation therapy machines are capable of delivering precise radiation therapy (IMRT/IGRT) while sparing surrounding normal tissues so as to minimise the immediate and long term side-effects without compromising disease control. "We should be able to offer treatment with lesser debilitating side -effects with good chance of long term control or cure. Newer technological advancement in radiation oncology gives clinicians major treatment edge in terms of reducing treatment related morbidity and increasing cure rates," shares Dr A K Anand, Chief - Radiation Oncology, Max Cancer Centre. Similarly surgical techniques have also improved over the years with better results. Many leading hospitals catering to cancer care are installing these high-end technologies.
| Radiation Oncology on Radar |
The highest growth is expected in the radiation oncology space due to undersupply and a significant opportunity for reduction in the cost of treatment. However, establishing a radiation oncology unit in the hospital has been an expensive option, as it involves huge capital investments as well as recruitment of specialised physicians. "Oncology is a capital-intensive sector particularly while setting up a radiation centre. Most of the cancer centres are radiation oncology centric. The only way to overcome this is to create models where there is effective capacity utilisation. Centralisation of high-end equipment will be another feature," opines Dr Ajai Kumar. A robust analysis of the patient demographics, planning of appropriate equipment based on the market and clinical teams, quantum of investment available, systems to manage the throughput and opportunities to maximise capacity utilisation are key determinants in planning a radiation oncology unit, believe experts. While the Government gives grants for Government or trust hospitals for development of a radiation oncology department, private hospitals have to depend on debt for financing the high-end equipment. Reducing upfront capital investment via collaborative models with medical equipment manufacturers has been seen as a large opportunity area to address the investment constraint. Partnering with global players in the form of joint ventures could be another approach to deal with this challenge, one expert |
The Players
 "The Government should ensure cancer hospitals are given tax or duty benefits"
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 "The fight against cancer cannot be won by a single healthcare provider or even a group"
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The estimated growth of the oncology market at 30 per cent per annum indicates that the healthcare players have largely been able to leverage available market opportunities. The industry has been witnessing the increasing involvement of private players putting up cancer centres and prevalence of standalone cancer hospitals.
It is estimated that presently around 160 Government hospitals and more than 350 private hospitals in India are providing specialised oncology treatment. A very small percentage amongst these hospitals provides all three areas of oncology namely surgical, medical and radiation oncology.
Close to 25 regional cancer centres (RCC) have been established in the country for the ongoing care and early detection of the disease. More than 35 major players are operating in the Indian cancer treatment market and close to 15 MNCs are already present and more are planning to enter the market. Still, there are very few exclusive hospitals dedicated to cancer care. "Apart from the regional cancer centres, which are owned by the Government of India, the number of players in the private sector is small," opines Bibhuti Bhusan Kar, Programme Manager, South Asia and Middle East, Healthcare, Pharmaceuticals and Biotechnology Practice, Frost & Sullivan, Mumbai.
There are numerous private clinics operated by oncologists for chemotherapy, which is a very fragmented sector due to the size of the country and the preference for localised treatment because of cost considerations.
One of the major players in the Indian market, Fortis Healthcare, has entered into a partnership with International Oncology Services Pvt Ltd (IOSPL), a US-based company. IOSPL is also looking to set up independent hospitals in India, particularly at tourist destinations such as Jaipur and Delhi, to attract foreign visitors. Funded by a group of individual investors, IOSPL has planned an investment of around $15 million (about Rs 70 crore) for its immediate expansion projects, with eight new centres coming up by 2012. "Overall, we would be investing about Rs 200 crore in the next three years," discloses Pradeep Jaisingh, CEO, IOSPL. With Fortis Healthcare Group, the company is starting work on its centres at Fortis, Mohali and Fortis, Amritsar, and these centres will be operational in a years' time.
Mumbai-based Tata Memorial Hospital and PD Hinduja Hospital, All India Institute of Medical Sciences, Delhi and Indo American Cancer Center in Hyderabad are the other major players in this space. A few private players have opened dedicated hospitals or have set up a dedicated cancer unit in existing hospitals to tap the opportunity. These include Netaji Subhash Chandra Bose Cancer Research Institute, Thakurpukur Cancer Research Centre, Bangalore Institute of Oncology, MS Ramaiah Memorial Hospital, Apollo Hospital, Jaslok Hospital, and SL Raheja Hospital. New players Narayana Hrudayalaya have entered this space through a facility in Bengaluru, which is expected to treat patients at a much lower cost and thereby achieve growth through volumes.
Delhi-based Max Healthcare is expanding its oncology footprint in North India. "The group's first two hospitals in PPP with the Government of Punjab, opening in September 2011, shall have cancer as a superspecialty at Max Super Speciality Hospitals in Bathinda and Mohali," says Umesh Kandpal, Head, Business Development, Max Healthcare. There is a huge incidence of cancer in the Malwa belt due to indiscriminate use of pesticides and resultant groundwater contamination over the years. Setting up cancer services in these hospitals will help reduce the cancer burden in North India.
Oncology now has the attention of PE /VC players as well, and hence a few Indian companies are setting up chains of cancer hospitals. Likewise a few international chains are also expanding in India. HCG recently announced that it has raised Rs 500 million in equity from IDFC Private Equity Fund II, a fund managed by IDFC Private Equity. Milestone Religare Investment Advisors invested $10 million in HCG.
A number of private hospitals are investing in dedicated cancer care units in existing hospitals, instead of setting up separate hospitals for cancer treatment. Apollo Hospital already exists in Delhi and Hyderabad. In addition, they have recently started a dedicated unit in Delhi, Kolkata and Hyderabad for cancer treatment, providing all the modern healthcare facilities for cancer.
However, no information is available on the amount of investment being planned in these cases. The bulk of the investment is expected to be in the areas of radiodiagnosis, radiotherapy, surgical treatment and stem cell transplant, which are largely capital-intensive and thus provide less competition.
| On High Alert |
| Cancer has taken India in its tight grip over the years. Though the cancer incidence rate in India is lower than in Western countries, the numbers of cases are higher in India due to its large population. Moreover, recent times have witnessed an increase in the incidence of cancer, possibly due to urbanisation, industrialisation, lifestyle changes, population growth and increased lifespan (in turn leading to an increase in the elderly population). It is estimated that the life expectancy of the Indian population will increase to 70 years by 2021-25. This has caused a paradigm shift in the disease pattern from communicable diseases to non-communicable diseases such as cancer, diabetes and hypertension. "Studies indicate that cancer prevalence in India is around 2.5 million, with over 8,00,000 new cases and 5,50,000 deaths occurring each year due to this disease," shares Preetha Reddy, Managing Director, Apollo Hospitals Group. According to a WHO forecast, Asia will be visited by degenerative disorders in the next decade, and this includes cancer as a disorder. The common sites for cancer in India are oral cavity, lungs, oesophagus and stomach in males and the cervix, breast and oral cavity in females. "With an estimated incidence rate of eight lakh new cases every year and prevalence of 2.4 million cases, the cancer treatment market needs attention from India Inc," warns Bibhuti Bhusan Kar, Programme Manager, South Asia and Middle East, Healthcare, Pharmaceuticals and Biotechnology Practice, Frost & Sullivan, Mumbai. |
Choosing the Right Regimen
 HealthCare Global |
 Tata Memorial Hospital |
Multiple business models exist worldwide for delivering cancer care-ranging from quaternary care cancer hospitals, a hub-and-spoke model and even standalone centres that house high-end equipment. There are newer business models emerging in the oncology treatment space in India too; for example, dedicated day care chemotherapy centres where the patient undergoes chemotherapy sessions and gets discharged the same day. Since upfront capital investments are a big barrier for providing oncology services, there are new business models evolving in which large equipment manufacturers install and operate the equipment in the hospital, whereby the hospital gains by providing comprehensive oncology treatment and the equipment manufacturers gain access to new and scalable business opportunities.
Outsourcing is 'In': Outsourcing of the services to another is increasingly seen, as the costs need to be contained. The two parties can share the cost of the setup. One partner may look after the infrastructure and the other supply the equipment. "To put my money where my mouth is, we have tied up with IOSPL to set up the therapeutic end of the cancer centre, whereas we will set up the infrastructure. This also includes a state-of-the-art bone marrow transplant unit. Such models will work and many more will be seen in healthcare in the future," predicts Dr Sujit Chatterjee, CEO, LH Hiranandani Hospital, Mumbai. LH Hiranandani Hospital tied up with IOSPL in 2009. Its cancer centre at Hiranandani Hospital, which is currently under construction, will be operational by the end of this year.
All in One: According to Kanakia, Indian healthcare players specialising in oncology can emulate successful new models from countries such as the US. He gives the example of Goshen Health System in Indiana, which has been providing consolidated oncology services in a single centre focusing on cancer care. The most attractive feature of this 30,000 sq ft facility, opened in 1998, is a total patient-centric approach whereby patients can come to one site to complete all their physician appointments, review their treatment plan and have their lab and diagnostic tests in one place, something really difficult to do in multiple settings. "This cancer centre has become a regional cancer treatment facility, a destination hospital that has grown by 17-22 per cent annually since opening, in a relatively mature market like the US," reveals Kanakia.
Going Hub and Spoke: The hub-and-spoke model has also been well received on Indian ground lately. Shares Jaisingh, "India needs hub-and-spoke models of cancer care where each hub has state-of-the-art equipment which is gradually phased out to the satellite centres." Such centres keep providing patient inflow from the peripheries and at the same time prevent the technology from becoming obsolete. One of the major players in the cancer space, HCG has been following this model extensively to expand its reach within the interiors of India. The spokes utilise services from the hub, thereby reducing travel for patients. "We take centres to their hometown. In coming years we plan to have several centres in tier II and III cities. We would also like to be ahead in technology and bring in true backward integration through R&D. We plan to expand our reach through investment; of course we have funding from private equity and in future we are looking to go public," shares Dr Ajai Kumar. With the funds raised from the public, the group intends to expand to different areas of the country, as well as in Africa.
Dr MK Khanduja, Chairman and Managing Director, BSR Healthcare Group, which runs BSR Cancer Hospital, sees comprehensive cancer care and need-based treatment as the models for the present and future. He points out that palliative care and pain management will also increase, and focus must also be on cancer prevention and early detection. "We plan to set up one more comprehensive cancer treatment hub in Chhattisgarh in the next two to three years," Dr Khanduja reveals.
| Cancer Hospitals in India |
Major well-known cancer care centres across the country are:
Source: Frost & Sullivan |
Barriers to Progress
 Rapid Arc |
 CyberKnife |
Capital Intensive Nature: Blame it on the capital-intensive nature of this segment which kept hospitals away for a long time. "In the past, Indian hospitals hesitated in making large investments because of a long gestation period," Jaisingh explains.
Most of the equipment like the linear accelerator, brachytherapy, and high-end onco-surgery setup are pretty expensive and give a relatively low ROI. "The Government should ensure cancer hospitals are given tax or duty benefits which would bring down the capital as well as operating cost," shares Dr Khanduja. Dr Jayaprakash Madhavan, Senior Consultant, Oncology, KIMS Pinnacle Comprehensive Cancer Care, Kerala Institute of Medical Sciences, Trivandrum, concurs, "The Government should come up with special subsidies for import of equipment. Financing should be liberalised."
Accessibility and Affordability Woes: Lack of proper and affordable diagnosis, and of awareness and easy accessibility to treatment in India, has further made the market sluggish. Presently most of the hospitals such as Apollo, Max Healthcare and other private players have come up with specialised and dedicated cancer care units in their hospital setups to cater to this hugely needy therapeutic area. However, these hospitals are located mostly in the metros and tier I cities. Since the segment is capital-intensive, smaller private players are not able to afford to set up such facilities. In cities with less development and in rural areas, the lack of proper diagnostic facilities further limits the treatment to a great extent. Hospitals have only partially been able to utilise the market opportunity, mainly because the paying capacity of the patient is still low in India. Health insurance in India has also not picked up to the desired levels to take care of the affordability factor. The delay in diagnosis resulting in poor survival and high mortality rates prevents some of the patients from coming forward for treatment. Besides, cancer treatment continues for a longer period while the patients and their relative travel to a metro or other city. This leads to inconvenience as well as loss of wages / revenue. Says Dr Avinash Deo, Haematologist & Medical Oncologist at Dr L H Hiranandani Hospital Powai, "Cancer is likely to become more common, more treatable but more expensive to treat. Managing costs without compromising the interest of all stakeholders (patients, doctors, paramedical staff, hospital managers and investors) will be a major challenge for cancer care."
Manpower Crisis: Health manpower is another major challenge that the Indian healthcare industry faces and it does slow down the sector's potential for growth. "There is a shortage of the oncologists treating specific type of cancers. Each physician treats almost all types of cancer and most of the time each oncologist practises in many hospitals," shares Bibhuti Bhusan Kar. Starting academic courses for generating a pool of trained and skilled manpower can address these issues.
Attention R&D: Lack of R&D is another area in cancer treatment in India which requires attention. A combination of financial incentives announced in the recent Union Budget for R&D in the form of weighted deductions coupled with more FDI by global healthcare chains can accelerate the pace of R&D activity in this segment, believes Kanakia.
Prognosis
Despite all the growth seen in this segment, the Indian healthcare industry has still barely touched the tip of the iceberg when it comes to cancer care treatment. "The fight against cancer cannot be won by a single healthcare provider or even a group. The demand for cancer care far outweighs the existing supply," avers Preetha Reddy, Managing Director, Apollo Hospitals Group.
This scenario is set to change very soon. It is believed that more and more hospitals will enter this segment. In tier I cities like Delhi, Mumbai and Bengaluru we may be reaching the saturation point. Now, this segment may not be viable for the multispecialty hospitals particularly. "The future is going to be in tier II and III cities for viability, and they would be the preferred place of treatment," opines Dr Ajai Kumar. The major issue of affordability has seen some hope with the Government setting up various schemes like Arogyasree in the country. Such Government-led initiatives will surely bring in tremendous change with people below the poverty line being able to access high-end care. This will create a great demand, which in turn will force hospitals to get into the market of tier II and III cities as they will see great advantage to sustain their business model there.
- Source: Express Healthcare, June 2010
- Link: http://www.expresshealthcare.in/201006/market01.shtml
While the concept of injectables was revolutionary when discovered, the innovation in this segment has been evolutionary. Drug delivery systems with various biotechnology drugs have brought new innovations in the industry. Also, the kinds of deals witnessed in this segment are indicators of the prospects that lie in this area. Indian players have made themselves regulatory compliant to attract the world markets. According to IndiaVenture Advisors, the total Indian market for injectables has been estimated at about Rs 6,500 crore for FY09. The total domestic injectables market is estimated at about $450 million and was estimated to have grown at more than 20 percent in the last three years.
"The relatively exclusive segment of the generics market appears to be gaining traction, which has become evident with Hospira and Pfizer increasing their market shares by doing deals with Indian manufacturers"
"Pens are finding increasing popularity to self-administer insulin in Europe. These devices are becoming more popular among diabetics in the US and this could find a niche market in India as well"
"With modernisation and new hospitals, the number of quality conscious customers who prefer to buy dependable parenteral products for their modern healthcare setup is steadily rising and will continue to rise for the next few years. Accordingly, the parenteral segment will enjoy excellent growth in the coming years. The key challenge, to emerge successful in this segment, is to provide consistent quality"
"The injectables business is highly capital intensive with a long gestation period. Therefore players look for collaboration in this area"