Driven by growth and action in the pharmaceutical sector, many consultancy firms and data analytics companies, such as IMS Health, C Marc and Boston Consulting Group (BCG), are looking to expand their operations and services in this space.
Some of these companies are also eyeing inorganic growth to increase their footprint and diversify by offering newer services to pharmaceutical and healthcare clients. According to estimates, the market for such services and delivery in India is currently pegged at about $200 million, growing at over 15 per cent annually.
IMS Health, which has largely been a sales data provider to pharmaceutical companies so far, is now foraying into other segments such as consultancy and data analytics. The company is also eyeing to expand its client portfolio beyond drug makers to sectors such as insurance, hospitals, state governments and other policy makers and institutes, including the Planning Commission and the World Bank.
Amit Backliwal, GM, South Asia, IMS Health, said: "India is going to be among the top 10 health care markets in the next five years and is certainly going to witness much more action. There are issues related to access, affordability, availability and quality. Unlike other sectors, health care so far has been a neglected sector mainly because it is regulated. Decisions here are taken without evidence because the sector is fragmented and there is very little data. Most of the players here make decisions based on ad-hoc data or gut."
According to Backliwal, it is this opportunity that many, including IMS Health, are eyeing. "We are in the process of expanding our services to join the dots in the disparate and fragmented healthcare space in India," he added.
Besides its plans to roll out a census of hospitals, doctors and chemists in the top 120 cities over next two-three years, IMS is also eyeing acquisition opportunities in India to adopt technology. "We are acquiring platforms that can detect fraud, rationalise claim ratios and improve profitability significantly," he added.
Other firms such as BCG and Strategic Decision Group (SDG) are also looking at India as a growing market for services and delivery.
Bart Janssens, partner and director, BCG, says, "We see most rapid growth in the health care segment, which includes medical technology and the provider sector such as hospitals, apart from pharmaceutical and life sciences companies, which form a big chunk of it."
BCG, which is focused on consultancy services, is looking at organic growth to capture the health care segment completely. According to Janssens, the growth rate of BCG's business from the health care segment has accelerated substantially in last two years. "Till two years ago, our health care consultancy services were growing at around 15-20 per cent; this has now increased to 50 per cent," he said.
The clientele has also increased significantly for these companies. According to Janssens, BCG has more than doubled its client range over the past two years and now handles three out of the top five Indian pharmaceutical companies.
SDG, another strategy consulting firm that helps pharmaceutical companies in strategic decision-making, risk management, and shareholder value creation, is also looking at expansion.
According to SDG's Partner and Managing Director Aashish Mehra, quality data would play a very important role going forward. However, given the complex distribution system, data gathering is costly and needs quality and therefore, it would see selective players. As against data and analytics, the consultancy and strategy provider segment is seen to grow faster.
"There is uncertainty for pharmaceutical companies. Be it market, regulatory environment or competitor moves, these companies are required to take decisions under uncertainty and that is where our role comes in to craft their strategy," Mehra said.
According to experts, the range of pricing for such services is very wide. While Indian companies are sophisticated buyers of consultancy, and data and analytical services, multinationals are increasingly facing budget constraints to pay well.
