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Lack of regulation haunts India's test labs

Industry estimates show there are over 100,000 diagnostic laboratories across country

Sushmi Dey  |  New Delhi 

Clinical Trial image via Shutterstock

The $5-billion diagnostics industry, a part of the healthcare sector that is growing at 15-16 per cent annually, may be on the brink of a crisis due to the absence of regulation. The Indian pharmaceutical industry’s reputation is being hurt internationally by faulty manufacturing practices. Industry estimates show there are over 100,000 diagnostic laboratories across the country. Of these, 70 per cent offer pathology services and the rest provide radiology and imaging such as MRI, CT scan X-ray and ultrasound. Although corporate players such as Dr Lal Pathlabs, SRL Diagnostics and Quest Laboratories are gaining share, the industry is largely fragmented with 88-90 per cent of the market dominated by unorganised players. Consumers are also wary of differential pricing for similar services. Established players explain the price disparity as a function of service quality but consumers complain prices are driven by commissions to doctors, geography and location. For instance, an MRI can cost anything between Rs 1,000 and Rs 6,000 depending on the lab, its location as well as its geography.

For patients, however, it is a difficult choice because they are unable to evaluate the quality vis-a-vis the price. Experts point out there is no specific law regulating the industry. While some big and branded players in the market depend on voluntary accreditation from organisations like the National Accreditation Board for Testing and Calibration Laboratories (NABL) and the College of American Pathologists (CAP), the smaller ones operate more like mom-and-pop shops in the absence of any binding regulatory norms. Estimates show merely 1 per cent of the total diagnostic laboratories are accredited.

ALSO READ: Ranbaxy may have to pay huge fine, again Although the Centre passed the Clinical Establishment Act in 2011 to also bring into its purview the diagnostic industry, the law is yet to be implemented in spirit. Moreover, it is left to individual states to implement the Act. “There is an urgent need for legislation and regulation to maintain a basic minimum level of quality in labs in India. The relevant guidelines of international standards have been put forward by accreditation bodies but it is a very small fragment of the diagnostic industry that is implementing these standards. I definitely believe that it should be mandatory to comply with these norms to maintain quality and prevent malpractices,” says Namita Mathur, a consultant pathologist at Rockland Hospital in Manesar. According to SRL Diagnostics Chief Executive Sanjeev Vashistha, there are absolutely no restrictions, guidelines or mandatory criteria for setting up a pathology lab. As a result, anyone can set up a pathology centre in the country. For radiology and high-end imaging services, which deal with radiation- based technologies, centres are required to take initial approvals from certain bodies such as the Bhabha Atomic Research Center (BARC) and the Atomic Energy Regulatory Board (AERB). “But once these labs are set up, there are no regular inspections, audits or checks to ensure these labs are maintaining standards, procedures and quality,” Vashistha said. Moreover, most of the licensing authorities are concerned about radiation, but they do not really supervise the medical eligibility of these labs, experts say. Though there is no set law, the Indian Medical Council (IMC) advises test reports to be signed by doctors. “There is no one to keep a check on it and there is no penalty for someone who is not following such advisories,” Vashistha added.


  • India has over 100,000 diagnostic laboratories
  • Pathology labs represent around 70% of the total industry
  • Radiology and high end imaging is 30% of the industry
  • Size of diagnostic industry pegged at around $5 billion, growing at 15-16% annually
  • Unorganised players dominate 88-90% of the industry

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First Published: Sat, April 19 2014. 22:44 IST
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