HCL’s Life Science, Healthcare & Chemical practice has emerged as the fastest growing practice amongst Indian IT Service providers, and now seeks to revitalise it’s clients’ business enterprise using vertical applications and integrating them with ERP using middleware and SOA. Pradep Nair, Vice-President & Global Head of the Life Sciences, Healthcare & Chemical practice discusses with eHEALTH the growth strategy and vision of the three micro-verticals.
Q. How do healthcare and life sciences verticals differ in terms of technical challenges and demands as compared to other industry segments? How do you propose to tackle the unique challenges that these two segments throw up?
A. The healthcare segment consists of Payer (Health Insurance) and Provider (Hospitals, clinics etc), while the life sciences vertical consists of Pharmaceutical, Clinical Research Organisation (CRO), Bio Technology industry and Medical Devices Industry. This segment is an emerging vertical as it started to adopt IT and outsourcing services much later than other verticals like financial or retail vertical.
The healthcare and life sciences vertical focuses on the well being of people and is very sensitive to the impact of services offered to the general population. Thus, regulatory compliance becomes extremely important to ensure that all required precautions and regulations have been followed. Also, due to the increasing pressure to have life changing patented solutions, the Life Sciences vertical invests heavily in R&D. The spiraling R&D costs, in turn increases the cost of healthcare. The sharp increase in costs in the healthcare sector and the growing demand caused by an aging population too exercise great pressure from insurers on healthcare providers. Healthcare providers are being forced to reduce costs among others by increasing productivity. Also, APAC countries like China and India have vast, geographically dispersed populations, and the limitations in communications infrastructure may impede their efforts in setting up efficient healthcare infrastructure.
Life sciences industry looks for outsourcing partners who can provide solutions for a complete product that can address the entire value chain, so as to optimise the R&D spending on innovation for new product introduction.
Over the past five to ten years, healthcare providers have moved from seeing IT exclusively as a billing and scheduling tool to accepting that technology can help make their clinic practices more efficient and safer. As per Health Industry Insight, an IDC company, even the billing aspects of IT have undergone transformation as P4P and new insurance vehicles such as high-deductible and consumer-directed health plans (CDHPs) put more focus on the revenue cycle and the cost of care that require provider attention.
In medical device companies, technological advancements that combine improved therapeutic effects (such as better clinical outcome) with lower overall costs (such as shorter hospital stay) has become of prime importance. Another interesting area is the emerging markets. Medical devices companies are strategising to explore with low cost products in emerging markets. The BRIC countries’ medical device and equipment markets are currently valued at USD 10.4 billion, as per “Medical Device Markets of the Future?”- a report published in January 2006 by Espicom Business Intelligence, Chichester, UK. And as per Datamonitor, Pharmaceutical industry will lose nearly USD 80 billion in revenue by 2008 due to patent expiration. The largest 50 pharmaceutical companies in the world spent more than USD 100 billion on R&D in 2006. For Pharmaceutical companies, reducing operating costs and streamlining, automating and/or integrating key business processes are key drivers for offshoring work.
Safety and pharmacovigilance risk management will be one of the fastest-growing application development areas in the life science market. Driven by growing interest among regulators, consumers, and the medical community, drug safety is rising in both importance and visibility to drug manufacturers.
HCL works with some of the top pharmaceutical and medical devices companies along with global, large and cluster hospitals. The company provides business aligned IT solutions to healthcare providers and pharmaceutical companies, which address the pain points of CIOs. These solutions focus on reducing the process cycle intensity and create revitalised enterprise by integrating ERP with custom applications. We have developed custom products along with Intersystems, SAP and Oracle especially for healthcare and pharmaceutical industry.
We also provide business aligned R&D services for medical devices companies, which address the pain points of CTO and Head R&D. With therapeutically aligned, end-to-end concept to manufacturing services, HCL enables medical devices companies to create innovative, low cost and reliable products. HCL also partners with leading research institutes across the globe to enable medical device companies to launch medical devices for emerging markets.
Q. What IT products and services does HCL currently offer in the two micro-verticals of Medical Devices and Healthcare?
A. HCL has the largest dedicated medical devices practice amongst Indian outsourcers and works with 19 of the top 40 medical device companies in the world. With a team of 900 plus domain experts and consultants, HCL provides therapeutically focussed, business aligned R&D offering end-to-end ‘concept to manufacturing services.’ HCL provides concept development, design, protyping, validation, regulatory and manufacturing. HCL works for Cardio, Ortho, Renal, Diabetic and bed side equipment industry segments and has worked on 89+ products with Zero product recall. HCL is the 1st Indian service provider to be ISO 13485 certified, and has compliance lab, which is certified for ISO/IEC 17025.
HCL has also been delivering significant value for its Life Sciences customers through the integrated package of process management, software services and infrastructure management; and works with 10 of the top 20 Pharmaceutical companies. With a team of 1600+ domain experts, regulatory consultants, clinical trial technicians, biostatisticians, software engineers and consultants, HCL provides business aligned IT offering with drug discovery to sales and marketing services. The company provides IT services, infrastructure and BPO services for Life Sciences conglomerates; and is working with SAP and Oracle to create custom solutions to address the needs of the industry.
In the field of healthcare, HCL is the first Indian IT services company to be the early adopter Solution Partner using InterSystems Technologies. With a team of 200 medical doctors and consultants, HCL provides business aligned IT services to healthcare industry. It also provides ERP, Middleware and SOA, EMR and Hospital Information System implementation, maintenance and support services
Q. What is HCL’s strategy for strengthening its healthcare and life sciences vertical, in India?
A. The Indian economy with a healthy economic growth rate is certainly a lucrative market for HCL. The company already works with most of the large healthcare providers in India. We are also engaged in enabling the top medical devices companies to launch medical devices for emerging markets like Brazil, Russia, India and China. We also invested in the first private Test Lab in India, with an investment of USD 5 million. This ensures that all devices, from Class I to Class III are safe and meet all required quality standards. HCL has also designed many medical devices for emerging markets like a low cost, multi-lingual, portable renal therapy device to be launched in India in the next three months.
To better understand the needs of the Healthcare, Life Sciences vertical, we conduct an annual study. Last year, we launched a joint survey with Knowledge@Wharton to understand the predisposition of ‘envisioning the medical device company of the future’.
This year, we have initiated a joint research with School of Medical Science and Technology, IIT Kharagpur and Doctor Kares Hospital to understand the needs of ‘Launching Medical Devices for Emerging Markets’ and has with them created low cost, custom and innovative solutions. We spoke with over 283 Senior utives of medical Devices companies, Medical Doctors, analysts and various thought leaders in the industry. We met them face-to-face, used online polls and telephonic conversations to gather inputs. Three different sets of survey queries were created. Each was designed to understand the market trends, requirements of end users as well as capture the insights of thought leaders in this industry. The interactions and further analysis provided many striking insights into their plans and the problems faced while launching medical devices for emerging markets.
Based on its vast experience working in this vertical and these periodic research, HCL has come out with3 innovative models that reduce process cycle time, democratise innovation and create a fixed process to apply innovation to business problems.
Q. What do you think are the key issues the medical devices manufacturers and healthcare providers are struggling with and need to resolve immediately in India?
A. In India, the majority of hospitals are extremely small as compared to U.S. and European standards. These facilities more closely resemble clinics, rather than full-service inpatient facilities, often having well under 50 beds. Government plays an active role in providing healthcare services in the Asia/Pacific region. However, the healthcare industry in India has come a long way from the days when those who could afford it had to travel abroad. Today patients from neighbouring countries, Middle East, and the UK are flocking to India for specialised treatment.
In India, the public healthcare system provide services free of cost or at subsidised rates to low income group in rural and urban areas, and with the recently passed healthcare bill by Government of India, a substantial improvement can already be perceived in health infrastructure. The Government is upgrading and increasing the total number of hospitals, clinics and clinical laboratories in urban and rural areas. According to a recent trade report by the Royal Danish Embassy, New Delhi and Trade Commission of Denmark, Bangalore, this is expected to drive growth in medical devices sector. The report says that the medical devices segment is expected to witness considerable imports of medical imaging equipment, cardiac care equipment, and medical laboratory equipment during the forecast period. Telemedicine services in India are also expected to grow, which, in turn, should create demand for diagnostic medical equipment such as X rays, CT-scanners, dopplers, ultrasound, electrocardiographs, and so on.
However, medical device firms may soon be facing what big pharmaceutical companies have come to live with for several years now – less cash to spend, and ultimately fewer dollars to invest in essential R&D. Though the India and China markets are growing at 4.7% to 6.5% a year respectively, (Espicom Business Intelligence, UK) to tap that market, will require substantial changes in product design, user interface and cost structure. The biggest would be learning to build medical equipment at the right price. In the U.S., a dialysis machine might cost USD 1,400, whereas in India, the market will only bear a machine priced below USD 600.
Similarly, there are also certain basic socio-economic differences that need to be kept in mind while developing medical devices for the emerging markets. These are countries where electricity is a major issue, and hence it is important that the devices have a longer battery life. Also, unlike in developed countries where disposable devices are preferred, in the emerging market, the users want their devices to be reusable and rugged. These are insights that came out of the joint research with School of Medical Science and Technology, IIT Kharagpur and Doctor Kares Hospital to understand the needs of emerging markets.
Manufacturers in the medical device market thus face the challenge of maintaining profitability despite slumping average price per unit. According to analysts, while growth in unit sales increased by more than 15.6% from 2007, the average price per unit reduced by 8.9% per year from 2007.
Q. What role is HCL playing / what stake does HCL hold today in the arena of clinical trials in India?
A. A comprehensive Clinical Trial Supply Management Solution is key to accelerating clinical trials and gaining the competitive advantage. HCL enables IT Services for Clinical Trials for leading medical devices and life sciences companies. The services include Hosting, Investigators and Site Management, Patient Life Cycle Management, Adverse Event Monitoring and Management, Clinical Trials Supplies Management, COTS Implementation, Application development, maintenance and support and Data Integration. HCL also provides Clinical Data Management and Data Analysis services including Paper and EDC, CRF Design, Data Management Plan, Database Design and Build, Data Entry, Data Validation Plan, Data Review and Validation, Query Management, and Medical Coding AERS/SAE Reconciliation, Database Lock, Quality Control, Review for Protocol Adherence, Clinical Data Migration, Standards Adoption, Application development, maintenance and support and COTS implementation/ validation.
Q. How do you plan to grow in this field in next 5 years?
A. HCL Life Sciences Practice has been growing at 65% year on year since its inception in 2001, and is the fastest growing vertical in HCL Technology and seeing the market trends HCL is extremely bullish about its growth. But as a policy, HCL doesn’t give any forward-looking statements.
Q. Please comment on the scope, importance, and current market share of HCL in India and other countries in the Asia-Pacific region, with respect to the medical devices and healthcare segments.
A. With 65% year on year growth, HCL Life Sciences, Healthcare and Chemical Practice contributes to 6% of HCL Technologies revenue. HCL is the largest medical devices practice amongst Indian outsourcing company and works with 19 of the top 40 Medical Devices companies in the world. These medical devices companies are also present in India or are in the process of entering emerging markets. HCL also works with 5 of the top 10 Pharmaceutical companies in APAC. HCL also works with multiple leading hospitals in India and APAC region.