Roche Diagnostics, the $10-billion Swiss major, appointed Lance Little the chairman and managing director of Roche Diagnostics India and South Asia early this month. Little joins the India operations from New Zealand, where he served as managing director. He speaks to Reghu Balakrishnan on growth and opportunities in Indian diagnostics market. Edited excerpts:
How do you evaluate Indian diagnostics market and opportunities there?
We know that globally 60 to 70 per cent of the clinical decision that a doctor is making is based on diagnostic results. Yet, less than two per cent of healthcare expenditure is spent on diagnostics. So, there is a huge opportunity here for any country, including India, to maximise the use of diagnostics within the healthcare environment. We have got very good high-end labs, which are equivalent to any country around the world. To look at the laboratories here, we have got somewhere between 40,000 – 60,000 labs in the country but only approximately 400 labs are National Accreditation Board for Testing and Calibration Laboratories (NABL)-accredited, guaranteed high quality. These labs have to consistently perform and are frequently audited and accredited. The focus that I want to bring is to build and drive the quality in the labs here in India, so that more people can benefit from quality diagnostics.
How do you plan the makeover?
The idea here is to be able to partner with labs and bring more than a machine on a bench that delivers a result. It’s to be able to bring quality and solutions into the lab. Only 400 labs are actually accredited here. This is where we want to make a difference and an improvement.
Any specific areas you would be focusing on?
There are a couple of specific areas where I see an unmet medical need here in India. One of them is blood screening. In the blood screening environment, there are two layers of testing that ensures safe blood donations. The first layer is in place in India, the second layer which is the standard practice now globally is considered the way to manage safe blood and ensure blood when donated into patients when needed is the safest possible. This second layer is the NAT testing, Nucleic Acid Testing. NAT is a more sensitive blood test which is able to detect infections before antibodies are produced, as it detects the genetic materials of viruses. This is critical when you consider less than 5 per cent of blood banks in India are using the NAT technology.
There is another area of unmet medical need is cervical cancer, which is number one cancer killer for women in India. Globally, more than 25 per cent of the women with cervical cancer reside in India. We have a standard screening test called Pap smear, but that has its limitation. What we are bringing in India is the new technology utilising the DNA type technology, targeting the virus that contributes to pre-cancer of cervical cancer.
Healthcare expenditure in India is low compared to other Asian countries. Is the price part a concern in India?
We have to make sure that we remain competitive. The Indian Diagnostics environment is a price-sensitive environment. But the healthcare spend is an interesting one because as we have seen in the latest government announcement on the next five years plan, I think they are increasing their healthcare spend, moving from 1.4 per cent of gross domestic product (GDP) to 2.5 per cent GDP, which is significant increase in the GDP spend. It is going to drive more people to have access to health.
In India, 80 per cent of the diagnostics market is unorganised. Are you expecting any kind of consolidation?
Well, there is certainly organic growth and the way I look at the India environment, there is vast space for everybody. We have huge opportunities and requirement locally that we can satisfy at present and we need to build the system within the laboratories in India. If you look at the market, the market is projected to grow, according to the Clearstate data, to Rs 5,000 crore by 2016 from Rs 2,400 crore in 2011. You can clearly see a significant growth. Out of the 14 countries that constitute Asia Pacific region within Roche, India is No 5. Revenue of India in 2011 was Rs 440 crore.
Any manufacturing plans in India?
Manufacturing is done globally. We don’t manufacture here in India. As we sit here at the moment, there are no plans for setting up any facility in India, it’s the case of deciding what we need as time goes on in India and if opportunities arise, we will address them.
You have partnership with Ind-swift for cardiac detecting device. Any similar alliances in future?
Where we see an opportunity, where it makes sense and if it is in line with the business model, we will look to partner with who we feel appropriate and can add value to India.