PER CAPITA HEALTHCARE EXPENDITURE IN INDIA

Per capita healthcare expenditure is predominantly higher in developed countries than in developing or under-developed
countries. While per capita healthcare expenditure in United States in calendar year 2018 was $10,624, it was $73 in India for
the corresponding period. Similarly, per capita pharmaceutical expenditure in calendar year 2018 was $16 in India, as compared
to $1,554 in the United States and the global average of $156. As of Calendar Year 2018, India ranked 168 out of 193 countries
in terms of current health expenditure as a percentage of GDP. The graph below sets out the per capita expenditure of some of
some of the leading economies, as per data collected by the World Bank.

 

12,000
USA, 10,624

oe a
8,000
6,000 — Germany, 5,472

——- France, 4,690
4,000 Japan, 4,267
2,000 Brazil, 848

_—_ eee tins 501
0 SSS — india, 73

2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: World Bank

The healthcare sector in India primarily includes hospitals, pharmaceutical companies and pharmacy retail, diagnostic services,
medical equipment and supplies, medical insurance, telemedicine companies and medical tourism. Whilst the per capita health
expenditure in India is one of the lowest in the world, with total health expenditure comprising 3.5% of India’s GDP (and as
compared to the global average of 6.5%), there is a high potential for growth given an increasing awareness, affordability and
acceptability of health services leading to an increased spending on healthcare. The pie-chart below sets out the distribution of
current healthcare expenditure in India by healthcare providers:

‘¢
©

Source: National health accounts 2016-17, Ministry of Health and Family Welfare, Technopak Research

™ Govt hospitals
= Pvt hospitals
= Govt clinics

«= Private clinics
= Pharmacies

= Diagnostic lab
= Others

 

DOMESTIC PHARMACEUTICAL MARKET

India’s domestic pharmaceutical market was valued at = 1,500 billion in financial year 2020, having grown at a CAGR of
approximately 10% in the last five years, and is expected to grow at a similar rate going forward. The key market characteristics
of the domestic pharmaceutical market include a low per capita health expenditure, high share of private out of pocket expenses
(which includes purchases from pharmacies), and lower penetration across rural areas which has led to a high opportunity of
growth given the limited penetration of health services in rural and urban areas.

The table below sets out certain health expenditure indicators, as of calendar year 2018

 

 

 

 

 

World
Health Expenditure Indicator India Average __| India Rank
Current health expenditure (% of GDP) 35 6.5 168
Current health expenditure per capita, PPP (current international $) 275.1 1467 145
Share of out of pocket expenses (%) 72.4 40.25 14

 

 

 

 

 

Source: World Bank

The graph below sets out the regional estimated per capita per annum health expenditure for India in INR (Indian Rupees or 2)

127
