HEALTHCARE SECTOR MAY SEE MORE CONSOLIDATION IN 2019

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Healthcare sector may see more consolidation in 2019 with the tightening of the regulatory environment set to make it hard for small players to stay afloat in a most aggressive market. Industry players furthermore expect more partnerships in the new year between public and the private sector in the healthcare space, which they feel is ‘under-invested.’

Malaysia’s IHH Healthcare has scalp 31.1 percent pole in Fortis for Rs 4,000 crore after months of intense rivalry and is in the process of taking another 26 percent stake. Excluding, KKR-backed hospital management firm Radiant Life Care has announced the acquisition of a majority stake in Max Healthcare through a combined to create a combined entity valued at Rs 7,242 crore.

“We have seen many combines and acquisitions in this field and will probably see the consolidation of healthcare by little large players like other meadow careers.”

Manipal Hospital Chairman H Sudarshan Ballal said to PTI.

Manipal Category, backed by global investment firm TPG, was including a contender for acquiring Fortis.

Ballal said Demonetization, GST, tightening of cash transactions and regulatory issues have positively impacted some of the smaller building making them unviable.

“The future healthcare will be a high-volume, low-margin venture, inching regarding universal healthcare with an active role played by the government. It will also be a most improved accountable system, and people and organizations that do not adapt to this new philosophy will perish,” he added.

Ballal said. Given these situations, the consolidation of health care by large chains and shutdown of many individual-driven smaller facilities is likely to happen.

There were five contenders to invest in money-strapped Fortis: Manipal Group, IHH Healthcare Berhad, Chinese investor Fosun International, Radiant Life, which was backed by global private equity firm KKR, and a consortium of Indian business families – the Munjals of Hero Enterprise and Burmans who own Dabur.

Max Healthcare promoter led by Analjit Singh will step down. The deal in between Radiant Life and Max will be carried out through a sequence of transactions and will see KKR comely the many shareholders while Radiant Life Care promoter Abhay Soi will lead the combined company as Chairman.

He combined entity will operate over 3,200 beds throughout 16 hospitals across India.

Wockhardt Hospitals MD Zahabiya Khorakiwala said that in the coming year more understanding partnerships between the public and private sector should be expected to sure that the near-universal healthcare rolled out in the country becomes a ground actuality.

Apollo Hospitals Vice Chairperson Preetha Reddy said, the country remains under-invested in health infrastructure.

She said “We have a scarcity of doctors and nurses and are vastly under-insured as a nation. Other problems that remain are access to primary and quality healthcare, changing disease patterns, GST and price regulations on treatments and medical devices which remain areas of debate and consensus building.”

Pharmaceutical sector, industry veterans expect good retrieval in the domestic market.

Glenmark Pharmaceuticals Chairman and Managing Director Glenn Saldanha say. We expect good retrieval for the pharma sector in the domestic market. The Indian pharma market growth is probably to be in binary digits, and we will see the beginning of new products invariably.

Saldanha said. “We expect growth rates of generic drug businesses in the US to endure under pressure. However, several leading Indian pharma businesses have invested in developing specialty products, and we will see many of these products getting commercialized, which may help offset the sluggish growth in generics.”

The Mumbai-based company is also in the process of making a transition into the specialty products segment in the US and will have some of its specialty products in dermatology and respiratory space in the market next year, he added.

Another Big pharma player in the generics segment, Lupin is looking at composite generics, biosimilars and specialty medicines to be the head drivers of growth going further.

Company body Organisation of Pharmaceutical Producers of India (OPPI) said it would continue to focus on four critical areas including creating a culture of quality and – fostering an ecosystem that rewards re-new in 2019.

President A Vaidheesh said. “OPPI will continue to a supporter for policies that accelerate entry to new technologies by eliminating regulatory holds-up and roadblocks standing between patients and new medicines; reduce costs by eliminating taxes and tariffs on life-saving medicines and partner to increase health by identifying public-private partnership opportunities,”

The pieces including witnessed some large ticket acquisitions this year, including Hyderabad-based Aurobindo Pharma buying the dermatology business and three manufacturing units of Sandoz, the generics unit of Swiss drug maker Novartis, for as much as USD 1 billion.

Advanced Medical Technology Association (AdvaMed), which represents the medical devices piece, said 2019 could be the profoundly explain year for the manufacturing.

“With healthcare at the forefront of strategy making, we are optimistic that this sector will receive its rightful place in the overall healthcare continuum.” AdvaMed believes 2019 could be a game changer if the government accepts a scientific approach such as trade margin rationalization from the first point of sale “sale to the distributor” to address inefficiencies in the healthcare delivery system that burdens patients.

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