Before stepping into the panel, I had a pretty linear approach to the Indian healthcare business:
1> Regulatory frameworks -> IP, constraints.
2> Industry-> market structures, services, and maturity of symbiotic players.
3> Consumers and Markets-> segmentation.
4> Companies-> Revenues-> Products and Services; Costs -> Manufacturing, Distribution, Licensing.
5> Distribution models.
Listening to the panelists from Pfizer, a healthcare company (Apollo Hospitals), a generic drugs company (Dr. Reddys) and Carlyle, I began to focus on 2 takeaways:
1> Healthcare Framework and Policy Innovation: The parallel here is the effort in the Indian Financial Services sector to develop frameworks given the results in the US financials "market". Another parallel is the U.S. music and film industry.
2> Business Model Innovation: Focused on access to healthcare services and drugs. Access equates not just to distribution, but also to price points. The parallel here is the U.S. (global?) music industry.
Healthcare Policy Framework Innovation
1> The "Access" Case for Policy Frameworks:
Amit Patel from Dr. Reddy's made an interesting point that bringing down price points in drugs, patented or otherwise, may bring about increases in revenues, due to increases in volumes of users. He carefully avoided talking about elasticity, but he was effectively driving at segmentation and managing the segments.
How is this thought process relevant in the Indian Healthcare context? Unlike in the U.S.- given the context of healthcare insurance in the US- the price of a drug effectively forms an access barrier to those who need it. Healthcare in India invariably involves a large out of pocket expense component.
These access issues roll up into a need for policy frameworks that develop multiple markets and multiple market entities that collaborate to serve unmet demand.
2> The IP Case for Healthcare Frameworks:
Again, the panelist from Dr.Reddy's pointed out that a patent regime is an outcome of a particular economic environment and necessity. The U.S. music industry is coming to grips with markets evolution driven by technology. Do the U.S. music and film industries need to rethink how they look at IP and its enforcement? Would they have to take another look in the future?
3> Policy Roadmaps:
How about applying an idea, similar to product roadmaps for agile development, that I suggested here:
Business Model Innovation
On distribution, the value chain, and operations, I find parallels between the music industry and the healthcare industry. Supply needs to innovate to stoke Demand.
More about this as I add to this blog.