Despite its prominent role in the growth strategies of Big Pharma, India is the ultimate frustration for business planners.
Its size, diversity, and freewheeling politics make the country an endless moving target that complicates the accurate and
timely assessment of potential opportunities. This is why the recent release of India's latest population census provides
some useful context in helping pharma investors decide where to put their resources, and to what end.
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The results of the census will carry weight as the government intends to use it to chart a more strategic approach to investment
in areas critical to pharmaceuticals, such as information and communication technologies; healthcare services, especially
in under-resourced rural areas; energy and manufacturing infrastructure; and higher education. The document is particularly
strong in analyzing India's huge demographic dividend, which predicts that millions of citizens are primed to join the middle
class over the next few years, stoking the demand for better healthcare and access to medicines— nearly all of which is currently
paid for out-of-pocket.
The results also provide some subtle hints about continuing sources of risk, not the least of which is the potential for confrontation
along the key religious fault line between the majority Hindu and minority Muslim populations. The proportion of the Hindu
population is slated to fall below the 80% mark for the first time in over a century, revealing a significant divergence between
Hindu and Muslim growth rates. This could slow social progress because for many indicators the Muslim population tends to
rank below the national average—literacy among the Muslim cohort currently stands at slightly under 60%, compared with more
than two-thirds for the Hindu majority. "Religious demographics" is important as an indicator of future political stability,
to an extent not seen in other markets.
Another divisive factor is the sex ratio, where the gap in births of boys versus girls has widened significantly since the
last census in 2001. That data comes as a surprise, given the many laws enacted to prevent female feticide along with schemes
to encourage families to have a girl. The results have sparked a political debate focused on the fact that, in the opinion
of many leading health advocacy groups, and after a decade of strong economic growth, India remains a hostile place for girls—status
among the sexes is still highly unequal.
Nevertheless, what the census shows in stark relief is just how big the country is today. The total population stands at 1.21
billion people, a figure nearly equal to the combined populations of an extent not seen in other markets. One in every six
people in the world is an Indian citizen. Between the last census in 2001 and this current one, India added nearly as many
people as there are in Brazil.
More important, the population boom has not yet played itself out. The fertility rate is slated to continue at 2.8%, or slightly
higher than replacement. The Health Ministry has pushed back the timeline for achieving population stabilization to 2070,
from the 2045 target set via the previous census. Practically, this means that India is slated to overtake China as the world's
most populous country within the decade.
HEALTH IS DRIVING CHANGE
The census carries important new information on the state of heath and the potential for sector-led growth. Demand for healthcare
services in India is growing at a compound growth rate of 16%. The healthcare industry accounted for 5.2% of India's GDP in
2002, but the census says this will rise to somewhere between 6.2–7.5% by 2012, or $47 billion annually.
However, the public sector accounts for a mere 20–25% of total health spending, with the country's public outlays among the
lowest in the world. Large parts of the country continue to have no access to basic medical facilities. Expensive healthcare
adversely impacts the economic condition of the poor, leading to a vicious cycle that further reduces their standard of living.
For the first time ever, mental illness was extensively mapped in the census as part of a major effort to track the level
of disability. Besides mental retardation, people were asked if they have a family member suffering from depression or anxiety.
According to one estimate, two out of every five Indians suffer from depression, creating an enormous wellspring of unmet
medical need involving a target treatment population in excess of 200 million. Other questions on disability covered topics
such as schizophrenia and anxiety disorder.