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Pvt. Diagnostics Can Play Key Role in Administration & Distribution of Vaccine: Anand K., CEO, SRL Diagnostics

Anand tells Ashish Singh about future clinical labs, the role of digitization, and the role private diagnostics can play in the pan-India vaccination drive amongst others. Excerpts:

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He joined as the CEO of SRL Diagnostics in August 2020. Anand K, Chief Executive Officer at SRL Diagnostics is an experienced CEO with 25 years in healthcare. His focus area has been diagnostics and laboratory services in India, South Asia, Africa, and the Middle East. Anand tells ASHISH SINHA about future clinical labs, the role of digitization, and the role private diagnostics can play in the pan-India vaccination drive amongst others. Excerpts:

How much has the Covid situation impacted the testing scenario for SRL?

As the nation underwent a lockdown in mid-march, the diagnostic industry has faced multiple changes and developments. The industry faced a massive decline in the B2C business as the footfall of walk-ins fell drastically and combined with restrictions on elective and OPD services at hospitals and clinics, B2B businesses were majorly affected in Q1 as well. However, during the crisis, medical diagnostics emerged as the first line of disease containment and the most critical public health measure implemented at an unprecedented scale in human history. WHO’s T3: Test. Treat. Track initiative to prevent the spread of COVID has put diagnostics in the spotlight and highlighted an increasing requirement for better testing capabilities and the importance of quality. People have started to understand molecular/ genetic testing and hence this has resulted in the increase of investments, by large private labs like SRL, to set up more RT PCR labs across the length and breadth of the country. Hence, we were able to gain momentum in Q2 and were able to reach our pre-Covid numbers for our non-Covid business in October. 90% of our business has been recovered and with our current strategy focused on expansion, we plan to recover our growth in the coming quarters. We are optimistic that our FY 20-21 revenues will be similar to last year, and FY 21-22 will be much better.

How many samples have been Collected and Processed as on date from how many patients in Calendar Year 2020? How many were related to Covid-19 Testing?

In the Calendar Year 2020, we have processed about 30 million tests out of which about 1.4 million were COVID related.

The government is now ready with their vaccine distribution plan, what role do you think the private healthcare segment can play in it and specifically diagnostics?

The private diagnostics segment can play a key role in collaboration with the government in the administration and distribution of the vaccine. With their vast network across the country, a cold-chain system, and a trained workforce, large players can be key to making vaccines accessible across India. SRL has a network of more than 400 labs and 1500 touch points spread across India in Tier 1, 2 and semi-urban areas with capabilities to do Antibody tests and an established cold-chain network. The phlebotomists at our diagnostic labs can be trained further to administer the vaccine as well, thus providing the required manpower for the task. One aspect which will be vital for assessing the administration of the vaccine to people would be the Antibody test. And Anti-body tests and vaccination is done at the same place is a practical idea. A person first takes an antibody test, if he has antibodies then he does not need a vaccine immediately. If he does not have antibodies, then he can be vaccinated. Similarly, antibody testing is also required for assessing the efficacy of post-vaccination.

What is your vision for the brand SRL for 2021?

Just like 25 years ago, when SRL was incepted; I too started my career in diagnostics around the same time. This role that I have taken up at SRL is a role that I have had great respect for since I started my career in this field as a medical technologist. Since then, wherever I worked, whether it was for IVD Companies where I was selling kits to the labs to then later selling lab services to patients – I always felt proud to be working in the diagnostics industry, and I still do today. I joined SRL because I believe SRL is one of the best diagnostics companies in the country. Its mission is to help people on their path to better health, which truly resonates with my beliefs. Therefore, my vision for the brand is an unrelenting commitment to that mission. For our customers, that means in 2021 they should expect unparalleled customer experience along with high-quality diagnostics services and faster turnaround time.

COVID-19 has changed the way many industries operate; how do you think the diagnostics space has changed?

As the segments move towards digitization, it means transforming the job of pathologists into a more creative and data-driven one while it is allowing patients to receive diagnoses faster and with higher accuracy. The recent innovations in the sector, from pre-analytical automation to automated modular systems in the analytical phase to use of cloud and smart reports in the post-analytical phase, are focused on reducing turn-around time and laboratory errors.

In the coming future, Clinical Lab 2.0, fueled by the pandemic, will redefine the role of diagnostics in the care continuum, aligning with value-based healthcare. For laboratories to take on their future role, another vital aspect will be to focus on their healthcare workers’ well-being and investments in the training and development of human capital.

What is the current size (in INR) of the Indian Diagnostic Services Industry? What are its Growth Drivers? What are the challenges?

The pathology market size in India is around Rs 45000 crores growing at the rate of 13 – 14% every year. The market is highly fragmented with the largest player having a market share of less than 4%. The organized market size is around 15% and this offers great scope for consolidation.

The diagnostics sector is transforming at a substantial pace, and there are several major trends that we are witnessing in this sector that are powered by some growth drivers like ever-changing customer expectations, the rise of informed and aware consumer base opting for preventive health, widespread adoption of personalized medicine driven by precision diagnostics – Genomics, consolidation of smaller players and the trend moving towards digital healthcare and home-based services. However, lack of mandatory accreditation, trained and skilled human resources, and an ever-changing regulatory environment do pose some impediments for the industry.

Why does domestic diagnostic services industry largely remain highly fragmented? What can be done for its consolidation?

The Indian Diagnostics industry is witnessing strong growth and is coming out of the shadows with the rise in awareness on preventive health, changing lifestyle due to Covid-19. However, the diagnostic sector in India is highly fragmented with standalone centers accounting for more than 75% and the organized ones having around 15% share. There’s a need for all the states to adopt the Clinical Establishment Act that will help the state to monitor the technical competence and ensure adequate quality control on procedures in the labs including mandatory accreditation requirements. While the diagnostic industry has always been dominated by unorganized players, major diagnostic chains are slowly disrupting the market by acquiring smaller local labs.

Tell us about the footprint of SRL Diagnostics - what's your coverage in metros, Tier 1 and Tier 2 cities? Expansion plans for 2021 and beyond?

SRL has a strong network of 400+ labs and 1800+ customer touch points spread across 600 Cities, 30 States, and Union Territories. With the recent pandemic, there was an immediate demand for faster turnaround time on COVID RT PCR reports. Hence, we have expanded our capacity for COVID testing significantly, with RT-PCR labs and centers opening across the length of the country. So far we have opened 12 RT-PCR facilities across the country. In Kerala, we have got two labs in Cochin and Trivandrum and now we are planning to start one shortly in Calicut as well. We have opened two labs in Mumbai, one each in Gurgaon, Chandigarh, Ludhiana, Raipur, Chennai, Bangalore, Hyderabad, and Kolkata. In addition to this, we are catering to rural and tribal areas like Deoghar, Jharkhand and we will soon be launching a lab in Guwahati to provide better accessibility for northeast states.

In the coming months, we will continue our journey towards market share improvement in the geographies that we operate through the consolidation of organic growth and also evaluate inorganic growth opportunities as they arise.

How is the Lab Franchisee business grown? What is the outlook in 2021 for the franchisee business?

SRL is known for its cutting-edge technology, high-end equipment, IT systems, Quality practices, and rigorous SOPs developed over a period of years by its R&D and quality teams, and the same is applied to franchise set-up. SRL adopted the Franchisee model in 2003 and since then has grown a strong network of such labs and collection centers. With grown awareness around diagnostics, we are planning to expand our networks further through this model to improve our reach and access.

Tell us more about your international operations? What can we expect in 2021?

SRL is one of the largest lab networks in Asia, with a footprint across India, Nepal, Sri Lanka, Africa, and Gulf. We were the 1st standalone CAP-accredited laboratory in UAE and offering the largest in-house testing subspecialties by any laboratory in Dubai. In addition to lab presence internationally, we also have 70 Collection Centers outside India through which samples are received from Sri Lanka, Maldives, East, and West Africa, Middle-East CIS countries, and South East Asia. We also support hospital chains in Africa, Middle-East, Hong-Kong, Maldives and the SAARC countries in setting up labs. We are also planning to enter the operation and management of a few laboratories in different geographies outside India, especially in Africa, which is part of our expansion plan. 2021 will be a year of making our market hold stronger in geographies in India and outside.

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