News Corp VCCircle Healthcare Investment Summit, Sept 2017
Is India's healthcare challenge an opportunity for investors?
Healthcare sector in India, which according to some estimates was a $100 billion industry in 2015, is likely to become a $280 billion market by 2020. This impressive growth will primarily come on account of increasing demand for better healthcare services from a growing middle class that is increasingly become more aware and demanding, and also has access to resources to service its needs. A large part of the growth will also come from the massive chasm between demand and supply in healthcare services in tier II and III towns that have lately seen a spurt in economic growth.
Given the government’s limitations, most of this growth will be financed by investments coming directly from strategic or institutional investors or private equity and venture capital. According to DIPP data, between April 2000 and September 2016 FDI over $5billion found its way into hospitals, diagnostics and medical and surgical appliances segments while more than 14 billion went into pharmaceuticals and drug segment. A lot of this investment came in the form of private equity and venture capital from leading global investors such as International Finance Corporation, Abraaj Group, TPG Growth, InvAscent, Chryscapital, and Quadria Capital among others.
Relatively mature, pharma segment has been leading the wave of consolidation in the industry while hospitals and diagnostics have been hitting the public markets to raise funds for growth. Meanwhile, private equity and venture capital continues to pour into smaller operations such as regional diagnostic services, medical appliances, healthcare services as well as digital services. The size of PE/VC investments into healthcare businesses has gone up from $5-20 million around three years ago to $20-40 million in 2016-17.
In the midst of this, debt financing is being explored by a new breed of doctors-cum-entrepreneurs and a lot of NBFCs and venture debt funds are coming forward to lend them a hand. Insurance and health-tech, two critical blocks with immense potential to boost healthcare growth, surprisingly, aren’t seeing as much action. To be sure, a lot of experiments are being made in tele-medicine & mobile health space as well as digitizing doctor-patient data but no defining moves have come to the fore yet. Does the latter require a conscious attention from global big players such as GE, Siemens and Philips while the former needs more serious policy interventions from the government?
The ninth edition of News Corp VCCircle Healthcare Investment Summit, to be organized in Mumbai shortly, will examine these emerging trends as well discuss challenges faced by India’s healthcare industry and opportunities pursued by an exciting bunch of entrepreneurs, medical practitioners and investors.
• Healthcare – A preferred bet for Private Investors: What makes the sector take the spotlight?
• Healthcare IPO’s: What explains the rush? IPOs Vs PE-VC money, what would you pick?
• Healthcare Services: Will multi-specialty hospitals follow the consolidation route?
• Single Specialty: Who cuts the chase?
• Made for India or Make in India: How does the med-tech community deal with the regulatory hurdles?
• Role of global leaders in developing Indian healthcare market?
• A peek into “Hospitals of Future”: how would robotics, AI, automation change the way they look?
• Transparency in Patient Data: The Next Big Thing
• Bets on Health-Tech - What are the winning trends?
• Online Pharmacy: The Uber moment for an age old sector, would it succeed?
• Healthcare at Home: A viable model? How do the numbers stack up?
• Universal Health Insurance: A distant dream for India?
Day - I
09.00am - 10.00am
Registration & refreshments
10.00am - 11.00am
Panel Discussion 1: Is India's healthcare challenge an opportunity for investors?
In the last 5 years, we have seen private equity firms taking an increasing amount of interest in investing a full range of healthcare companies such as insurance, hospitals, pharmaceutical and medical tech companies. As businesses mature, private equity players are expected to find more ways to create value to convert business units into stand-alone companies. In a VCCircle analysis we learnt that healthcare was among the top five sectors where private equity dry powder found its way amounting to $731 million.
11.00am - 11.45am
Bets on Health-Tech - What are the winning trends?
11.45am - 12.00pm
12.00pm - 01.00pm
Panel Discussion 2: Healthcare IPOs: Both investors and entrepreneurs are chasing IPOs. What are their respective reasons?
The last 18 months has seen the success of five of the biggest IPOs in the Healthcare sector. Syngene International, Dr. Lal Path Lab, Thyrocare, HCG and Narayana Hrudayalaya‘s listing on the primary market has reinforced the confidence in the sector as the exchange has long been dominated by pharmaceutical companies.
PEs-VCs tend to stay away from pharmaceutical companies as it is a rather complicated segment and since these companies already have a diversified portfolio, PE-VCs tend to concentrate their efforts on healthcare delivery systems. Is the IPO wave going to carry on in 2017 as well?
01.00pm - 02.00pm
02.00pm - 03.00pm
Panel Discussion 3: Role of global leaders in developing Indian healthcare market?
In a market where GE claims to be able to reach their $1 Billion revenue mark by 2020, Siemens decided to sell off their healthcare business to their parent company. Their deep pockets and data mining capabilities allow them to develop products in this market which is expected to be growing at 20% year on year. Where Phillips began developing diagnostic equipment such as X-Ray machines, Siemens & GE showcased a full range of CT scanners, oncology and ultrasound machines which at this time when across the world the pricing pressure has garnered an unfavorable public opinion will be interesting to see how they contribute in developing the healthcare in India.
03.00pm - 03.20pm
Special Address: Universal Health Coverage: A distant dream for India?
With the announcement of the National Health Protection Scheme (NHPS) the government has promised to provide for over 100 million families below the poverty line which amounts to an annual coverage of $15,000 per household. This program will focus on the quality of care, measurement of healthcare outcomes along with facilitating private sector participation. We will also see investments directed towards preventive healthcare and building digital health systems.
03.20pm - 03.40pm
03.40pm - 04.40pm
Panel Discussion 4: Made for India or Make in India: How does the med-tech community deal with the regulatory hurdles?
The Indian med-tech industry is currently small and stands at $4.4 billion where imports still constitute up to 75% of the market. In the wake of Make In India , the government is planning several policies to push medical technology and domestic manufacturing. But because of the disparity between import-export duties, the cost of importing raw materials is much more than on the finished goods which add to the manufacturing costs. We also face high competition from China who produce medical products are a phenomenally lower cost.
But as the pharma and healthcare companies were celebrating their IPOs and investments, the med-tech community were let down by the policy overhauls with legalization and regulation issues of medical products. What are the steps that have to be taken to penetrate this $155 billion market?
04.40pm - 05.10pm
End of Conference Day 1
Day - 2
09.30am - 10.00am
Registration & networking
10.00am - 11.00am
Panel Discussion 1: Healthcare Services: Will multi-specialty hospitals follow the consolidation route?
Expensive real-estate, large set-up costs and continuous funding requirements some of the features of a multi-specialty hospital deal. We at VCCircle believe that since consolidation of multi-specialty hospitals of such a real-estate heavy investment it would take longer than 5-6 years to enjoy economies of scale.
11.00am - 12.00pm
Panel discussion 2: Single Specialty: Who cuts the chase?
As we see single-specialty mushrooming because of its lower risk and lower capital expenditure, PE/VCs get attractive returns on their investment within three years’ time. This asset light model allows the investment to be spread over a larger network and a larger geographical area and hence creating more value in terms of business. Eye care, dental and nephrology are some of the top performing segments in the single specialty market.
12.00pm - 12.15pm
12.15pm - 01.00pm
Panel Discussion 3: A peek into “Hospitals of Future”: how would robotics, AI, automation change the way they look (functions)?
Robotics surgeries may well be a more expensive proposition for hospitals, but robots and AI are certainly going to be a major part of the Indian healthcare system where we always find a lack of good doctors and facilities for all. There are several startups such as DiFacto Robotics and Automation, Sigtuple and Aindra which are going to lead the way to bring this to reality in India.
01.00pm - 02.00pm
02.00pm - 02.30pm
Special Address: Transparency in Patient Data: The Next Big Thing
India fares very poorly on the Global health systems transparency index, which is definitely a cause for concern if the government wants to provide the ease of doing business for healthcare companies. Ranking in the bottom five, leaves scope for innovation and investment in this sector as parameters such as patient experience, access/safeguarding of patient data need attention. Hyderabad and Bangalore based startups eKinCare and Medical Unique Identity respectively are using data analytics and cloud technology to improve the quality of medical treatment.
02.30pm - 03.00pm
Special Address: Online Pharmacy: The Uber moment for an age old sector, would it succeed?
We live in an age where we buy everything from groceries to cars with the tap of a button; it is time for medical and pharmaceutical market to catch up to this trend. Out of the 3000 online pharmacies that operate around the world, 19% of them came from India. But in this widely fragmented industry which consists of the traditional mom-and-pop stores and several small internet pharmacies, we are yet to declare the winner due to the abundance of regulatory challenges they are facing. The growth of online pharmacy business depends on how much they will be able to fit themselves within the legal framework.
03.00pm – 03.30pm
Special Address: Healthcare at Home: A viable model? How do the numbers stack up?
Home healthcare services poses as the most promising field in the Healthcare-tech sector growing at a CAGR of 9% per annum. The need for this service is driven by double income households, social structure changes and an increased need for geriatric care. Some of the prominent players in this sector who have attracted investments are Health Care at Home, Zoctr, Vatsalya, Nightingales among others. 2016 saw a rise in the number of VC deals in the HCIT sector, but the amount raised fell from $ 162 million to $ 71 million.
03.30pm - 04.00pm
End of Conference Day II
Date: September 18-19, 2017
Venue: Taj President, Mumbai
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