As India gears up for general elections, CNBC-TV18 takes stock of several sectors and the way they performed during the Narendra Modi-led National Democratic Party (NDA) government in the last five years. We get you a sector by sector analysis of how businesses have fared. Let's look at the pharma sector and how healthcare has done in the last 5 years.
The first and the most prominent feature under the Modi government was the rollout of the universal healthcare scheme Ayushman Bharat Yojana, which provides free health insurance for around Rs 5 lakh per family has so far covered around 1 million families against a target of 100 million.
The other key steps include banning 344 combination drugs, capping prices of stents and knee implants, and limiting trade margins of 43 cancer drugs. While this was a positive for patients, price control measures, especially on stents, has impacted MNCs like Boston Scientific and Abbott that have found that the prices are unviable for their newest technology in India.
The government also pushed forward Jan Aushadhi or generic drug store launches with around 5,000 Jan Aushadhi stores offering 800 plus medicines. The target now is to open around 2,500 more stores by 2020.
Healthcare spends, however, remained dismal. As a percentage of GDP, it has increased only 20 bps in FY18 over FY14 even as a percentage of the total budgetary expenditure it has only moved up by around 50 bps. The target is to increase healthcare spends to 2.5 percent of GDP by 2025.
The other criticism about the government has been a low focus on primary healthcare and the poor private sector participation in Ayushman Bharat mainly due to low package rates.
It seems that the past 5 years have also not been great for private hospitals given the more stringent price controls on knee implants, stents and the call for greater scrutiny of charges by hospitals. Two major listed stocks, for example Apollo Hospitals Enterprises and Fortis Healthcare have just about posted around 6 percent CAGR less than half the 13 percent return by the Nifty 500.