India Must Address Challenges Faced by Private Labs Amid Pandemic Costs

With government hospitals handling more COVID-19 testing across the country, private laboratories are facing hurdles such as high operating costs and low testing volumes in India. Against this backdrop, the government should come to the rescue of the private laboratories, which are finding it difficult to scale up testing, says GlobalData, a leading data and analytics company.
 
Pratibha Thammanabhatla, a medical device analyst at GlobalData, commented: “With an aim to increase high quality COVID-19 testing at the shortest possible turnaround time, private laboratories are standing along with the government by extending their testing limits. However, in this process, private laboratories are facing cost pressure as most of the suppliers are making advance payment a norm and hospitals are deferring payments.”
 
GlobalData’s research reveals that the Indian in-vitro diagnostics (IVD) market, which accounted for more than 21 percent of the Asia-Pacific IVD market in 2019, is expected to grow at a compound annual growth rate of 2.5 percent through 2025. 
 
Increased testing would require increased production and supply of IVD products such as reagents and consumables, and this would further drive the IVD market forward.
 
Thammanabhatla added: “Despite the Indian Council of Medical Research (ICMR) fixing the cost of COVID-19 testing at INR4,500 (approximately $59) in private laboratories, state governments are issuing their own price caps. The high operating cost and low testing are mounting price pressure on private laboratories as the process of testing for COVID-19 involves numerous fixed costs, including for reagents, consumables, skilled manpower and maintenance of specific infrastructure.” 
 
Lack of sufficient protective gear, transport disruption, inconsistencies in the guidelines between the state government directives and ICMR, and the disrupted supply of test kits are some of the other challenges that the private laboratories are facing. 
 
Thammanabhatla concluded: “Considering the crucial role of private laboratories amid the soaring COVID-19 cases, there is a need for the Indian government to address the challenges that private laboratories are facing so that they can sustain their business.”