According to the projected IMS report Health insurance premiums are expected to reach the Rs.30, 000 crore mark by 2015.
Drugs and pharmaceutical market in India is all set to be among the top 10 in the world, the health insurance market is expected to double by 2016 - $26 billion, is what the IMS Health projects.
"Increasing government funding, rising standards of care and an overall boom in the opportunities for access to necessary treatment are all coming together to shape a dynamic and sophisticated marketplace (for) healthcare in India," said Chinmay Padhi, head payer (insurance), IMS, in a report titled Managing the Cost of Care: The Past and Future of Health Insurance in India.
The country's drug market has been growing -$ 6 billion in2006 to $12.35 billion in 2013. The 2016 projections are despite the negative growth projections of overseas companies. The recent healthcare initiatives by the government and market expansion will all help. The World Bank estimates a growth that will cover 50% of the population of 630 million people by 2015.
The World Bank had said in a 2012 report that healthcare expenditure was one of the leading causes of poverty in India. Around 63 million individuals or 11.9 million households had been pushed below the poverty line by healthcare expenditure in 2004.
"If India is to truly have a place on the world stage, an efficient health insurance system is absolutely mission-critical," it said.
The process has already begun.
"Spurred in large part by pro-active government sponsored education, awareness and incentive programmes such as Rashtriya Swasthya Bima Yojana (RSBY) among others, the importance and value of the health insurance industry is on an upward trajectory," Padhi said.
RSBY is a health insurance scheme for below poverty line families launched by the government of India.
Muralidharan Nair, partner, life sciences, at consultancy firm Ernst and Young, does not expect growth at the rate as projected by IMS."A projection of about 100% growth in three years seems slightly unrealistic," he said, adding "India's pharma market will continue growing at 13-14% in the next two to three years."
The growth will depend largely on the pricing and making the claim process stable with statutes in place. The drug costs are to be controlled so big pharma companies may look to market products in villages and small towns. The control on drug prices will make essential medicine available to more patients especially in the rural and semi-rural areas.
Foreign drug makers have not yet commercialized their patented drugs in India, but the expansion of health insurance will give them the required boost to do this. The value growth in the market which is mainly for generic drugs will profit both the local and foreign drug makers.
Hannah Punitha (IRDA Licence Number: 2710062)
C.H. Unnikrishnan, June 2013