Per “Diagnostics: Unraveling the Future,” a report released by Praxis Global Alliance, India’s medical diagnostic industry is projected to grow at approximately 14 per cent CAGR touching $20 billion by 2026
Growth factors listed are increasing demographics, urbanization, penetration, better realizations per tests, attractive margins, and good headroom for growth.
With over 100,000 labs, the diagnostic servicesindustry is characterized by a high degree of fragmentation. This challenges the capability, scalability, and quality of labs. However, it also provides an opportunity to consolidate newer business models to evolve.
Of the $10 billion-worth market today :
- Standalone centers account for 48% market share,
- Hospital-based labs have a 37% share
- National chains account for a 5% share.
While the pathology segment contributes 57% to the diagnostic market share, radiology accounts for 43% of the market, comprising tests such as computed tomography scans, magnetic resonance imaging, and color doppler ultrasound scans, among others.
Aryaman Tandon, managing partner and practice leader, Healthcare, Praxis Global Alliance, said, “The pandemic brought in a paradigm shift in the diagnostic market regarding its scope and capacity while emphasizing the need for diagnostics & treatment. We also see new business models emerge as the competitive intensity increases.”
Business models around teleradiology and telepathology to improve access, quality, and efficiency of diagnostics is an emerging area.
Specialized tests, which now comprise 15-22% by volume and 40-45% by value, are going to drive growth of the market. Molecular pathology is poised to grow at 35-40% year on year. Wellness tests currently comprises only 1-3% by volume and 10-15% by revenue, but growth is likely to be driven by general wellness and condition-specific monitoring packages.
Key challenges that face the industry include regulatory issues, fragmented markets with a low focus on quality, commoditization and increasing competitive intensity, non-access to specialized resources, and value-conscious Indian customers, noted the report.
