At $2.5-3.1 billion, pharmaceutical outsourcing market (excluding contract manufacturing services) accounts for about 75 per cent of the India’s medical process outsourcing (MPO) segment which is currently estimated at $3.3–4.2 billion, according to a just concluded study by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and global professional services organization EY. While the payer outsourcing market constitutes $700-900 million of India's MPO market, the provider market accounts for the remaining share of about $100-200 million, noted the study titled ‘Medical Process Outsourcing in India’.
The recent US regulation on Patient Protection and Affordable Care Act (PPACA) together with the proposed introduction of ICD-10 standards has given impetus to the MPO market. Besides, domestic players are also gradually moving up the value chain in terms of service offerings while maintaining their cost competitiveness. All of these combined will give a boost to the MPO market, with the Indian payer BPO market is expected to grow at around 10% year-on-year in the next three to four years, provider outsourcing at more than 30% from 2011–2016, and the CRO market at 18%–20% in the coming years, says the report.
Mr. D.S. Rawat, Secretary General, ASSOCHAM, said, “We believe that there has been an ample push from health care payers, providers and pharmaceutical companies to move non-core processes to third-party service providers, and India has been one of the leading destinations for outsourcing in this space.”
“India has emerged as the second largest destination after the US in the healthcare outsourcing space. The growing ability of Indian players to analyse big data, discover hidden patterns and unknown correlations are driving new service offerings in this market,” said Mr. Milan Sheth, Partner and Technology industry leader, EY India.
Overall, the Indian BPO industry stands to gain from the growing demand in health care outsourcing. An evolved medical education system and its established prowess as a hub for outsourcing give India an inherent advantage. In order to fuel growth, the government needs to focus on implementing data privacy laws, introduce proper regulations around intellectual property and patent laws, and give a boost to education to help bridge the skill gap. Besides the rising demand for high-end healthcare facilities and multi-specialty hospitals, established medical and central lab infrastructure and training centers, is contributing to the growth of the healthcare and life sciences industry in India also, fuelling the domestic demand for medical process outsourcing.
Although, the Indian regulatory environment has been constantly evolving, the challenges around privacy laws, intellectual property laws and changing clinical trial laws continue to exist. A favorable and stable regulatory environment, coupled with increased transparency, is critical for growth in this sector. The report also covers some of the recommendations which could help provide a boost, and lists the current policy framework and specific challenges faced by the Indian medical BPO sector.
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