Healthcare Investment in Stocks

The Government of India is planning to increase public health spending to 2.5% of the country's GDP by 2025.

Healthcare has become one of India’s largest sector, both in terms of revenue and employment. Healthcare comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The Indian healthcare sector is growing at a brisk pace due to its strengthening coverage, services and increasing expenditure by public as well private players.

 

Indian healthcare delivery system is categorised into two major components public and private. The Government, i.e. public healthcare system, comprises limited secondary and tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the form of primary healthcare centres (PHCs) in rural areas. The private sector provides majority of secondary, tertiary, and quaternary care institutions with major concentration in metros and tier I and tier II cities.

 

India's competitive advantage lies in its large pool of well-trained medical professionals. India is also cost competitive compared to its peers in Asia and Western countries. The cost of surgery in India is about one-tenth of that in the US or Western Europe.

 

As of May 04, 2021, 15.89 crore vaccine doses have been administered through 23,35,822 sessions across the country.

 

The healthcare market can increase three-fold to Rs. 8.6 trillion by 2022. In Budget 2021, India’s public expenditure on healthcare stood at 1.2% as a percentage of the GDP.

 

A growing middle-class, coupled with rising burden of new diseases, are boosting the demand for health insurance coverage. With increasing demand for affordable and quality healthcare, penetration of health insurance is poised to expand in the coming years. In FY21, gross written premiums in the health segment grew at 13.7% YoY to Rs. 58,584.36 crore. The health segment has a 29.5% share in the total gross written premiums earned in the country.

 

In March 2021, various states and UTs started implementation of the ‘Intensified Mission Indradhanush 3.0’—a campaign aimed to reach those children and pregnant women who were missed out or have been left out of the routine immunisation programme due to the COVID-19 pandemic. This is aimed to accelerate the full immunisation of children and pregnant women through a mission mode intervention.

 

In March 2021, the Parliament passed the National Commission for Allied, Healthcare Professions Bill 2021, which aims to create a body that will regulate and maintain educational and service standards for healthcare professionals.

 

In the Union Budget 2021, investment in health infrastructure expanded 2.37x, or 137% YoY; the total health sector allocation for FY22 stood at Rs. 223,846 crore.

 

The government announced Rs. 64,180 crore outlay for the healthcare sector over six years in the Union Budget 2021-22 to strengthen the existing ‘National Health Mission’ by developing capacities of primary, secondary and tertiary care, healthcare systems and institutions for detection and cure of new & emerging diseases.

 

In Union Budget 2021-22, the government announced its plans to launch ‘Mission Poshan 2.0’ to merge ‘Supplementary Nutrition Programme’ with ‘Poshan Abhiyan’ (Nutrition Mission) in order to improve nutritional outcomes across 112 aspirational districts.

 

The Government of India approved continuation of ‘National Health Mission’ with a budget of Rs. 37,130 crore under the Union Budget 2021-22. In the Union Budget 2021, the Ministry of AYUSH was allocated Rs. 2,970 crore, up from Rs. 2,122 crore.

 

Between April 2000 and December 2020, FDI inflows for drugs and pharmaceuticals sector stood at US$ 17.74 billion, according to the data released by Department for Promotion of Industry and Internal Trade (DPIIT). Some of the recent initiatives in the Indian healthcare industry are as follows:

 

As of May 04, 2021, 15.89 crore vaccine doses have been administered through 23,35,822 sessions across the country.

 

In April 2021, Tata Digital infused Rs. 100 crore debt in 1mg, the online medicine start-up, and was in the final stages of acquiring a controlling stake in the company.

 

In April 2021, the Minsitry of Ayush and Council of Scientific & Industrial Research completed multi-centre clinical trial of a AYUSH 64 (a medicine) and found it useful for treatment of mild-to-moderate COVID-19 infections.

 

By March 2021, India exported more vaccines than it had administered to its citizens—60 million doses had been dispatched to 76 countries, while 52 million doses had been administered to Indian citizens. Apart from vaccines, drugs indicated for Covid-19 treatment too witnessed an uptrend in exports. For example, Remdesivir exports doubled in March 2021 to $14.8 million from $5.75 million in February 2021.

 

In March 2021, Union Health Minister Harsh Vardhan informed the Rajya Sabha that 157 medical colleges are under various stages of implementation across India. Of this, 58 colleges are in the first phase of implementation, 24 in the second phase and 75 are in the third phase.

In March 2021, gross written premiums of health insurance companies in the non-life insurance sector increased by 41% YoY to Rs. 2,185.05 crore, driven by rising demand for health insurance products amid COVID-19 surge.

 

On March 17, 2021, the Health Ministry’s eSanjeevani telemedicine service crossed 3 million  teleconsultations since its launch, enabling patient-to-doctor consultations from the confines of their home, and doctor-to-doctor consultations.

 

In March 2021, Virchow Biotech, a Hyderabad-based firm, and the Russian Direct Investment Fund (RDIF) announced a collaboration to manufacture up to 200 million doses of the Sputnik V vaccine in India.

 

In February 2021, India approved the commercial supply of 24 million doses of COVID-19 vaccines to 25 countries, more than 2x the 10.5 million vaccines exported in January 2021. Through this, seven countries, including Brazil, Morocco and South Africa, were sent 10 million doses on a commercial basis.

 

On February 2021, the National Backward Classes Finance and Development Corporation (NBCFDC) signed a MOU with Apollo Medskills Pvt Ltd. to co-fund a COVID Vaccine Administration training programmes for nurses, medical & nursing students and pharmacists belonging to the NBCFDC target community.

 

In February 2021, the Competition Commission of India (CCI) approved acquisition of Varian Medical Systems, Inc. by Siemens Healthineers Holding I Gmb (SHS GmbH).

 

In February 2021, the Minister for Commerce and Industry of India, Mr. Piyush Goyal, and the UK Secretary of State for International Trade, Ms. Elizabeth Truss MP, completed a meeting to discuss the bilateral trade and economic relations of India–UK trade and investment relationship.

The Ministers also welcomed enhancement of bilateral health cooperation between the two countries, such as on vaccines, which is allowing India to serve as a global source of strength in overcoming COVID-19-imposed challenges.

 

In February 2021, Prime Minister Narendra Modi laid the foundation stones for two hospitals and launched ‘Asom Mala’, a programme for state highways and major district roads, in Assam. He also added that 1.25 crore people in the state are being benefitted from Ayushman Bharat Scheme.

 

India is a land full of opportunities for players in the medical devices industry. The country has also become one of the leading destinations for high-end diagnostic services with tremendous capital investment for advanced diagnostic facilities, thus catering to a greater proportion of population. Besides, Indian medical service consumers have become more conscious towards their healthcare upkeep.

India's competitive advantage also lies in the increased success rate of Indian companies in getting Abbreviated New Drug Application (ANDA) approvals. India also offers vast opportunities in R&D as well as medical tourism. To sum up, there are vast opportunities for investment in healthcare infrastructure in both urban and rural India.

Indian healthcare sector is much diversified and is full of opportunities in every segment, which includes providers, payers, and medical technology. With the increase in the competition, businesses are looking to explore for the latest dynamics and trends which will have positive impact on their business. The hospital industry in India is forecast to increase to Rs. 8.6 trillion by FY22 from Rs. 4 trillion in FY17 at a CAGR of 16–17%.

 

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https://google1web.blogspot.com/2021/07/foreign-direct-investment-fdi.html