TB Diagnostics in India: Market Analysis and Potential...Only one global TB market analysis has been done to date 12 • Annually over US$ 1 billion is spent worldwide on TB diagnostics,

TB Diagnostics in India: Market Analysis and Potential Revised - Version 2

Shekhar Menon, MBA [Indian Institute of Management, Bangalore] Minal Vachali Madhavankandi, MBA [Indian Institute of Management, Bangalore] Mansi Chitalia, MBA [Indian Institute of Management, Ahmedabad, Clinton Health Access Initiative] Madhukar Pai, MD, PhD* [McGill University] *[email protected] 16 July 2012

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For limited distribution Please do not cite or publicly distribute/post/present - this analysis will soon be submitted for publication in a peer-reviewed journal. Feedback and suggestions should be sent to: Dr Madhukar Pai, MD, PhD Associate Professor McGill University Montreal Email: [email protected]

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Outline

• Context • Methodology • Analysis of patient behaviour and diagnostic patterns • Estimation of number of TB patients • Estimation of number of persons with suspected pulmonary TB • Estimated RNTCP spend on pulmonary TB diagnosis • Estimated Non RNTCP spend on pulmonary TB diagnosis • Market size for pulmonary TB diagnostics • Estimated spend on TB diagnostics • Scenarios to estimate addressable market value • Sensitivity analyses • Conclusions • Limitations • Research recommendations • References • Acknowledgements

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Context

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According to the World Health Organization, in 2010, there were 8.8 million incident cases of TB The incidence of TB is declining very slowly

Source: WHO http://www.who.int/tb/publications/global_report/2011/gtbr11_full.pdf

Global TB burden

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“We conclude that control programs have been less effective than expected in cutting transmission mainly because patients are not diagnosed and cured quickly enough.” Dye & Williams, Science 2010

Undiagnosed TB and mismanaged TB continues to the drive the TB epidemic

7 Source: WHO 2011

The TB diagnostics pipeline is rapidly expanding and several tests and approaches are now WHO-endorsed

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Xpert MTB/RIF, an automated molecular test, received WHO endorsement in 2010, and is being rolled out in several countries

Source: http://www.unitaid.eu/index.php?option=com_content&view=article&layout=edit&id=943

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Source: Pai NP, Pai M. Discovery Med 2012

The landscape of molecular TB tests is rapidly evolving and several new products are rapidly emerging

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Market analyses are important and necessary

• To support new product development

• To convince industries and donors about the need for investments in new TB tools

• To develop detailed target product profiles (TPPs) that can guide product development and scale-up

• To inform donor/funder decisions

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By FIND & TDR Published in 2006 Conducted before several new diagnostics became available

Source: FIND http://www.finddiagnostics.org/export/sites/default/resource-centre/find_documentation/pdfs/tbdi_full.pdf

Only one global TB market analysis has been done to date

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• Annually over US$ 1 billion is spent worldwide on TB diagnostics, a figure over twice as large as the current market for TB drugs

• One third (US$ 326 million) of this money is spent out side of the established market economies (EME),where 73% of TB diagnostic testing takes place

• In EME: latent TB testing dominates

• In non-EMEs: active TB dominates (smears and CXR)

Source: FIND/TDR, 2006

Findings from this analysis shows

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• The potential markets for improved tests to detect active disease are large:

• 80 million for point-of-care test (per year) • 50 million for smear replacement (per year) • 20 million tests for culture replacement tests (per year)

Source: FIND/TDR, 2006

Potential market for new TB tests (global)

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Efforts are ongoing to engage industries and donors in emerging economies (India and China, in particular) to develop affordable diagnostics that can be scaled-up for diseases like TB and HIV

Need for regional analyses

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Source: WHO. http://www.who.int/tb/country/data/profiles/en/index.html

India accounts for approximately 25% of the global TB burden….

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• According to McEvoy & Farmer, the total clinical diagnostics1 market in India (reagents + instruments) is about $530 million, with an average annual growth rate of about 16 – 18%

• Roughly one-third public, and two-third private

• Highly fragmented

• Their analysis does not provide a specific estimate for TB diagnostics Source: http://www.mcevoyandfarmer.com/india.html

Note: 1Includes chemistry, hematology, coagulation, immunochemistry, microbiology and molecular testing

What is the in-vitro diagnostics market in India?

17 Note: *Conference website: http://tbevidence.org/2011/11/bangalore/

In 2011, a conference was held in Bangalore, India, to engage Indian industries in TB diagnostics development

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At the Bangalore conference, participants expressed the need for a detailed TB diagnostics market analysis in India

Genesis Objectives

• Discussions with various stakeholders at the Bangalore conference in August 2011

• Presentation of a preliminary TB diagnostics market analysis by McKinsey & Company*

• Estimate TB diagnostics market size (volume/spend)

• Build realistic scenarios for new diagnostic tests

• Develop reusable model for future use in Asia and Sub-Saharan Africa where TB incidence rates are high

* http://tbevidence.org/wp-content/uploads/2011/11/Ajay-Bakshi-Business-case-FINAL.pdf

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Methodology

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Methodology

• We compiled data on estimated number of TB patients in India, and the number of patients (with suspected TB) screened for TB

• We collected information on the various TB tests used in the public and private sectors, with estimates of the volume of testing per year

• Using unit costs per test, we estimated the total spend on TB testing per year, stratified by RNTCP and non-RNCTP sectors

• We then developed various scenarios of replaceable market for new TB diagnostics, to estimate market potential

• We performed sensitivity analyses to test our assumptions Analysis was only for the initial diagnostic testing market; not on

use of tests for monitoring of TB treatment Our focus was on active, pulmonary TB (not latent infection or

EPTB or drug-resistant TB)

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Primary data - interviews Secondary data

• Interviews and field visits with • RNTCP and Public Health

Officials • Doctors • NGOs • Researchers • Diagnostics Industry • Labs • Patients • Donors

• Research reports • Journal articles • RNTCP reports • WHO Global TB Control Report

[references cited at the end]

Sources of data

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Public sector (RNTCP) Private (non-RNTCP)

Refers to the testing facilities under the Revised National Tuberculosis Control Programme (RNTCP), the government tuberculosis programme

Includes all testing facilities in the private sector, government hospitals, medical colleges

TB diagnostics that are currently in use in India

• Active TB: • Sputum smear microscopy (direct

ZN staining) • Chest x-rays

• Drug resistant TB: • Line probe assays • Solid culture and DST • Liquid culture and DST

• Latent TB and pediatric TB: • Tuberculin skin test

• Active TB: • Sputum smear microscopy (direct

ZN and auramine staining) • Chest x-rays • Serological TB tests (ELISA and

rapid tests) • PCR (in-house or commercial) • QuantiFERON-TB Gold In Tube

• Drug resistant TB: • Line probe assays • Liquid culture and DST

• Latent TB: • Tuberculin skin test • QuantiFERON TB Gold In Tube

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Results

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Major trends

Source: 1. RNTCP Annual Report 2011: TB India 2011, http://tbcindia.nic.in/pdfs/RNTCP%20TB%20India%202011.pdf, last accessed on 2 March 2012; 2. Jaroslawski S, et al. Why are inaccurate tuberculosis serological tests widely used in the Indian private healthcare sector? A root-cause analysis. J Epi Global Health 2012;2:39-50.; 3. Dowdy D et al. Serological Testing versus Other Strategies for Diagnosis of Active Tuberculosis in India: A Cost-Effectiveness Analysis. PLoS Med 2011;8(8): e1001074.; 4. Grenier J et al. Widespread use of serological tests for tuberculosis: data from 22 high-burden countries. Eur Respir J 2012;39(2):502-505.; 5. USAID India. Market-based partnerships for health. Tuberculosis control and care initiative. A baseline survey report. 2012; 5. McEvoy & Farmer. Clinical Diagnostics Markets in India. 2011.

• Public sector (RNTCP) TB testing: dominated by sputum smear microscopy1; LPA and culture/DST mostly reserved for those with suspected MDR-TB

• >7.5 million patients with suspected TB are evaluated with sputum microscopy ever year

• Testing occurs in over 13,000 designated microscopy centres (DMCs) across India • 40 labs are now accredited for various culture/DST technologies, including 11 labs

from private/NGO sectors

• Private sector (Non RNTCP) TB testing: dominated by chest x-rays and serological antibody tests2-5; smears, PCR and cultures are not widely used, although available via large private lab networks

• >1.5 million serological tests were conservatively estimated to be done every year4 • Wide variation in estimated number of private labs; one estimate suggests 30,000

clinical labs, of which ~2700 have automated chemistry5 • Only ~250 labs have any form of accreditation (e.g. ISO, CAP, NABL) • Large private laboratory networks have emerged and are growing • There are thousands of small, stand-alone labs [exact number unknown]

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Laboratory landscape in India

Large lab networks

Regional lab networks

Small local labs • Usually single-owner run, and tend

not to have automated systems • Most do not have any MD or PhD

level lab professionals • May account for the majority of lab

testing in India (these labs are close to care providers/patients)

• Highly fragmented and unregulated • Cannot offer sophisticated tests • Can offer rapid diagnostics and

simpler tests

• 5 lab chains with pan-India presence (SRL, Dr Lal Pathlabs, Thyrocare, Metropolis, Quest India)

• Can perform sophisticated tests including culture and NAATs

• Strong presence in a limited geographic region through collection centers

• Can perform sophisticated tests including culture and NAATs

Exact number and distribution is not known

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Large and private network labs = ELISA - IgA, IgG, IgM (mostly imported – e.g. Anda TB & Pathozyme) Rs 300 – 750 per antibody (usually 2 antibodies are done)

Small stand-alone labs = RDTs - lateral flow/strip/card tests (mostly domestic – e.g. TB IgG/IgM by SD Bioline) Rs 250 - 500 per test

Market segmentation of TB serology*

Note: *Now banned by the Government of India

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Analysis of patient behaviour and diagnostic practices

Patient split between public (RNTCP) and private (Non-RNTCP) sector

Diagnosis Treatment

• Patients move from provider to provider • Two patterns observed:

• Battery of tests • Series of tests

• Duration of treatment • TB – 6 months • MDR-TB – 24 months

0 1 2 3 4 5 6 7

Nor

mal

Months

Tre

atm

ent Initial Smear

Treatment

Followup Smear1

Treatment2

Follwoup Smear2

Treatment…

Follow-Up Smear30 1 2 3 4 5Weeks

Dia

gnos

is

Cough

First Dr Visit

AntiBiotics

Revisit Dr

Smear/X-ray/ELISA/Serodiagnostics

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Diagnosis

Treatment

Non-RNTCP

RNTCP

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Estimation of number of TB patients

RNTCP - Notified cases1 (%)

New pulmonary (smear +ve) 630,165

New pulmonary (smear -ve) 366,381

Total new pulmonary cases 996,546 66%

New Extra-pulmonary cases 231,121 15%

Total new cases 1,227,667 81%

Retreatment – Relapse cases 110, 691 7%

Retreatment – Other cases 182,281 12%

Total notified cases 1520,639 100%

Estimation of Non-RNTCP cases

TB incidence rate2 185

Population of India (2010)3 1,208,000,000

Estimated new + relapse cases 2,234,800

RNTCP – new + relapse cases 1,338,358

Non RNTCP – new + relapsed cases

896,442

Non RNTCP – Other retreatment cases (assuming 12% share of total)

122,093

Non-RNTCP – total cases 1,018,535

Total TB cases (RNTCP +Non RNTCP)

RNTCP cases (new + retreatment) 1520,639 60%

Non RNTCP cases (new + retreatment) 1,018,535 40%

Estimated total TB cases 2,539,174 100%

Source: 1. RNTCP report: TB India 2011; 2. Global TB Report 2011; 3. Census of India 2001

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Estimation of number of TB patients - methodology

• We applied the incidence rate, from the Global TB Report by WHO1, to the Indian population (census) to calculate the total TB patients (new + relapse cases) in India

• We subtracted the RNTCP (public) notified new and relapse TB cases from the total TB patients to arrive at the number of new and relapse TB cases in the Non-RNTCP (private/NGO) sector

• We assumed the proportion of new to other retreatment TB cases in the Non-RNTCP sector to be the same as in RNTCP sector

• We added the new and retreatment cases in the RNTCP and Non-RNTCP sector to determine the total number of TB patients in India

Source: 1WHO http://www.who.int/tb/publications/global_report/2011/gtbr11_full.pdf

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Estimation of number of patients with suspected pulmonary TB

Estimation of total pulmonary TB suspects (per year)

RNTCP – Pulmonary TB suspects1 7,550,522

Contribution of RNTCP to total pulmonary suspects 40%

Contribution of Non RNTCP to total pulmonary suspects 60%

Non RNTCP – Estimated number of pulmonary TB suspects 11,325,783

Total pulmonary TB suspects 18,876,305

Source: 1. RNTCP report: TB India 2011;

Assumptions based on discussions with key stakeholders*

Note: *Key stakeholders include RNTCP, WHO, BMGF, CHAI, FIND, GHS, private laboratory service providers, diagnostics manufacturers

• We assumed the split of patients tested for pulmonary TB (pulmonary TB suspects) in RNTCP: Non-RNTCP sector to be 40: 60 based on discussions with various stakeholders*

• The split was applied to the pulmonary TB suspects in the RNTCP sector to calculate the number of pulmonary TB suspects in the Non-RNTCP sector

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Estimated RNTCP spend on TB diagnosis

Source: 1. Discussions with RNTCP and labs 2.RNTCP report: TB India 2011; 3. Data from FIND and BD Note: Exchange rate: 1USD = 50 INR

TB test Volume Price per test1 ($)

Market value ($)

Comments

Sputum smear microscopy2

15,101,044 2.5 37,752,610 Assumes two smear conducted per suspect as per RNTCP diagnostic algorithm

Line Probe Assay (LPA)3

13,333 10.0 133,333

Liquid culture3 6,667 21.0 140,000

Total 15,121,044 38,025,943

• Based on RNTCP reporting and data from stakeholders, we noted the volumes of TB tests conducted by the RNTCP (public) sector

• Using the unit cost per test, we calculated the total patient spend on the various pulmonary TB tests

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Estimated Non-RNTCP spend on TB diagnosis

Note: * Includes ELISA and Rapid, card-based tests ** Key stakeholders include RNTCP, WHO, BMGF, CHAI, FIND, GHS, private lab service providers, diagnostics manufacturers

Non RNTCP – Estimated number of pulmonary TB suspects 11,325,783

TB test % of TB suspects being prescribed the test

Volume

Serology * 40%

Rapid Card tests (lateral flow assays) 75% 3,397,735

ELISA (assumed 2 antibodies tested per suspect) 25% 2,265,157

Sputum smear microscopy 25% 2,831,446

Culture 10% 1,132,578

PCR 10% 1,132,578

QuantiFERON-TB Gold In Tube 2% 226,516

Line Probe Assay (LPA) 0.025% 2,831

Total tests 10,988,841

Assumptions based on discussions with key stakeholders**

• Based on discussions with various stakeholders**, we determined the % of Non-RNTCP pulmonary TB suspects getting each TB test to calculate the volumes

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Estimated Non-RNTCP spend on TB diagnosis (cont’d)

Source: : 1. Discussions with large lab chains Note: Exchange rate: 1USD = 50 INR

TB test Volume Price per test1 ($)

Market value ($)

Serology – Rapid Card tests (lateral flow assays) 3,397,735 5.0 16,988,675

Serology – ELISA (assumed 2 antibodies tested per suspect)

2,265,157 12.0 27,181,879

Sputum smear microscopy 2,831,446 2.5 7,078,614

Culture 1,132,578 33.0 37,375,084

PCR (in-house and commercial) 1,132,578 34.0 38,507,662

QuantiFERON-TB Gold In Tube 226,516 50.0 11,325,783

Line Probe Assay (LPA) 2,831 40.0 113,258

Total tests 10,988,841 138,570,955

• Unit cost per test was used to calculate the total patient spend on pulmonary TB diagnosis in the Non-RNTCP sector

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Estimated common (RNTCP+Non-RNTCP) spend on TB diagnosis

Source: : 1. Discussions with large lab chains; 2. SPAN Diagnostics, Surat Note: *Key stakeholders include RNTCP, WHO, BMGF, CHAI, FIND, GHS, private laboratory service providers, diagnostics manufacturers; Exchange rate: 1USD = 50 INR

Non RNTCP – Estimated number of pulmonary TB suspects 11,325,783

RNTCP – number of pulmonary TB suspects 7,550,522

TB test % of TB suspects being prescribed the test

Volume Price per test1 ($)

Market value ($)

Chest X-ray 80% 15,101,044 3.0 45,303,132

Tuberculin Skin Test (TST)2 - 173,246 2.0 346,492

Total tests 15,274,290 45,649,624

Assumptions based on discussions with key stakeholders*

• For two TB tests – Chest X-ray and Tuberculin Skin Test, it is difficult to determine whether the patients access public facilities (government hospitals/ medical colleges) or private facilities

• Hence we have separately calculated the volumes for these tests without categorizing them into public sector/ private sector

• Volumes of Chest X-rays were calculated based on the % of TB suspects getting an X-ray and for TST were provided by the manufacturer

• Using the unit cost per test, the total patient spend on these two pulmonary TB tests was determined

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Total (RNTCP+Non-RNTCP) patient spend on TB diagnosis

TB testing in Volume Market value ($)

RNTCP 15,121,044 38,025,943

Non RNTCP 10,988,841 138,570,955

Common tests (X-rays and TST) 15,274,290 45,649,624

Total tests 41,384,175 222,246,522

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Markups to the cost of a new TB diagnostic test along the value chain in the Non-RNTCP sector

Source: 1. Discussions with key stakeholders include RNTCP, WHO, BMGF, CHAI, FIND, private laboratory service providers, diagnostics manufacturers and GHS Note: 1USD = 50 INR

Imported diagnostic test Indigenous diagnostic test

Ex-factory price ($) 5.0

Transportation charges1 10%

Import duty/ taxes1 30%

Cost to distributor ($) 7.2

Distributor margin1 15%

Cost to labs ($) 8.2

Lab overheads+ margins1 85%

Referral fee1 (as % 0f patient price)

35%

Patient price ($) 23.4

Ex-factory price ($) 5.0

Transportation charges1 5%

Import duty/ taxes1 0%

Cost to distributor ($) 5.3

Distributor margin1 15%

Cost to labs ($) 6.0

Lab overheads+ margins1 85%

Referral fee1 (as % 0f patient price)

35%

Patient price ($) 17.1

• Using the ex-factory $5 price of a hypothetical new diagnostic test (e.g. an affordable molecular test), we factored in the margins of various players along the value chain to calculate the final patient price

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Replacement and usage scenarios to estimate addressable market value

Note: 1USD = 50 INR 1 No specific Target Product Profile (TPP) for the new TB test was assumed while developing the different scenarios 2 Assumes that the new TB test will be imported 3 Price to RNTCP assumes a discount of 10% on the cost to the labs, no lab overheads + margins and no referral fee to the providers; hence the difference between the RNTCP and Non-RNTCP price per test

Scenario (if a new TB test1 were to…) Volume Price per test2 ($)

Market value ($)

Replace serology (rapid + ELISA) (capture 33%) 1,868,754 23.4 43,728,844

Test always prescribed for all suspects (Ideal) 11,325,783 23.4 265,051,637

Test prescribed for 70% of suspects (High) 7,928,048 23.4 185,536,146

Test prescribed for 30% of suspects (Medium) 3,397,735 23.4 79,515,491

Test prescribed for 10% of suspects (Low) 1,132,578 23.4 26,505,164

Replace smear (capture 33%) 4,983,345 7.43 36,877,995

Replace smear (capture 100%) 15,101,044 7.43 111,751,501

Replace culture (capture 33%) 2,200 7.43 16,281

Replace culture (capture 100%) 6,667 7.43 49,335

Non

RN

TCP

RN

TCP

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Sensitivity analysis

• To tests the sensitivity of the total Non-RNTCP spend to the various assumptions, we performed a sensitivity analysis (details not shown)

• Assumptions were increased/ decreased by 10% to arrive at a low-high range for each assumption

• Variation in the total Non-RNTCP spend based on +10% change in each assumption was computed

• The assumption to which Non-RNTCP spend was most sensitive to was:

• Split of TB suspects between RNTCP: Non-RNTCP (assumed to be 40:60)

• % of Non-RNTCP TB suspects getting a TB serology (assumed to be 40%)

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Conclusions, limitations and research recommendations

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Conclusions

• Annually ~41 million TB tests are conducted for initial TB diagnosis in India

• Total annual patient spend on TB diagnosis is $222 million, of which Non-RNTCP (private) sector accounts for at least 62%

• Actual market for TB tests will be higher, if we were to account for repeated testing and treatment monitoring

• Chest X-rays and serological tests dominate the Non-RNTCP sector • Sputum smear microscopy test dominates in the public sector • Per patient spend on TB diagnosis in the Non-RNTCP sector is ~$16*

and in the RNTCP sector is ~$2.5* • A patient in the private sector on an average gets 2.3* tests during the

diagnosis phase

*Note: Assuming all chest X-rays and TSTs are conducted in the Non-RNTCP (private) sector Caveat: this aggregates different tests and wide variations are possible

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Limitations of the analysis

• Market size estimates are mostly for active, pulmonary TB cases • Since there are little data on how extra-pulmonary TB (EPTB) cases are handled, we were

unable to include EPTB in the analysis • Market size estimation excludes the diagnostic tests conducted for treatment monitoring (e.g. repeat

smears during and end of TB treatment) • Therefore, our analysis under-estimates the total market size for all TB tests

• Although diagnostic and treatment timelines in private sector varies widely, we have used one commonly used algorithm and timeline for illustrative purposes

• Assumptions on volumes of tests in the private sector is based on limited data that need to be confirmed in large-scale studies

• For example, we assumed that 75% of TB serological testing occurs in small, stand-alone labs, versus large/network labs

• The movement of patients between public and private sectors is a known issue (Dye C. IJMR 2012), but not well captured in our analysis; the same patients getting tested by different providers is also not accounted for

• There may be TB patients that never seek care and remain undiagnosed; our analysis does not account for this

• Our calculation of the market size using only the money spent on tests does not account for the fact that some new tests might create value by reducing other costs associated with the disease (e.g. treatment, hospitalization, lost productivity, repeat visits).

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Limitations of the analysis (cont’d)

• Routine blood tests such as ESR1, TC2, DC which are often prescribed by the providers as part of TB workup have not been included in the market size calculation; hence the total potential market is underestimated.

• Use of sophisticated imaging methods (e.g. chest CT scan) is not captured in the analysis; again, might underestimate the total market.

• There are many potential Target Product Profiles (TPP) for a new TB test (e.g. POC test; serology replacement; smear replacement; affordable molecular test; high throughput molecular test, predictive LTBI test, test to rule out TB in fever of unexplained origin, test for EPTB, etc.)

• We have not assumed a specific TPP for the new test while building the replaceable market scenarios

• There is a need to develop TPPs for products that will be most impactful on reducing TB diagnostic delays and reducing TB incidence (Dye C. IJMR 2012)

• Our analysis does not account for the fact that such a new test could actually reduce the market size in future by detecting more cases early and reducing TB incidence.

Note: 1 ESR=erythrocyte sedimentation rate 2 TC/DC = total and differential white blood cell count

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Some existing TPPs that need to be refined and integrated with market analyses to get at addressable market size

TPP for a POC test (MSF/TAG/STP)*

TPP for a simple and affordable molecular test

TPP for a high throughput molecular test for centralized laboratories

Note: *Batz H-G, Cooke GS, Reid SD. Towards lab-free tuberculosis diagnosis. Treatment Action Group, Stop TB Partnership, Imperial College London; MÉDECINS SANS FRONTIÈRES, 1 – 36, 2011. http://www.msfaccess.org/sites/default/files/MSF_assets/TB/Docs/TB_Report_TowardsLabFreeTBDX_2011_ENG.pdf

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TPPs should include test characteristics as well as mechanisms by which early diagnosis can be achieved

Source: Indian J Med Res 135, May 2012, pp 737-744

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On 7th June 2012, the Government of India officially banned the use, sale, manufacture and import of TB serodiagnostic tests

This ban suggests that a serology replacement test would be a TPP that could potentially have an important, immediate, addressable market

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Suggested TPP for a serology replacement test

Source: Jaroslawski S, et al. Why are inaccurate tuberculosis serological tests widely used in the Indian private healthcare sector? A root-cause analysis. J Epi Global Health 2012;2:39-50

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Regulation of TB diagnostics in India

• All IVDs in India must be approved by the Drug Controller General of India (DCGI) • All IVDs are classified as:

• Critical: products used to ensure blood safety (HIV, Hep B, blood grouping, etc.) • Non-critical: all others

• Currently, TB diagnosis are classified as “non-critical” by the DCGI • Therefore, poorly regulated

Source: Medical Diagnostics - India. By: Netscribes (India) Pvt. Ltd

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Procurement issues

Procurement depends on the sector:

• Public sector procurement: • Driven by governmental agencies (e.g. RNTCP for TB; NACO for HIV) • Usually based on competitive, tender process • Requires a policy to be in place (e.g. policy on how a new test should be used)

• Private sector procurement:

• Widely variable because there are several players in the fragmented market: • Hospitals (corporate, not-for-profit, NGO, etc.) • Large private network labs • Regional labs • Small, stand-alone labs

• No requirement for a policy or guideline on the diagnostic • No single channel for procurement • Access to the large number of small labs will require a “door-to-door” sales force

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Research recommendations

• Based on the gaps that we identified, we recommend further market research to: • Get more precise break-up of the number of patients with suspected TB in public

versus private sectors, and the likely movement/overlap between these sectors • Collect detailed information on exact volumes of TB tests done in the private sector • Collect data on how EPTB and MDR-TB are handled in the public and private sectors,

and what tests and volumes are involved • Qualitative research is needed to understand test prescribing behaviors of

healthcare providers, especially rural and unqualified providers • Collect data on follow-up testing that is done for TB treatment monitoring, including

volumes and costs • Develop a range of target product profiles and refine the scenarios for replacement or

add-on to existing tests • Estimate the actual number of laboratories in India and what capacity they have for TB

diagnosis • In particular, data are needed to understand the role of small, stand-alone labs in

TB diagnosis in the private sector • Estimate patients’ willingness to pay for TB diagnostics • Understand incentives and business models which might facilitate replacement of

suboptimal with validated TB diagnostics

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• World Health Organization. Global TB Control Report 2011. http://www.who.int/tb/country/en/index.html

• RNTCP Annual Report 2011: TB India 2011, http://tbcindia.nic.in/pdfs/RNTCP%20TB%20India%202011.pdf, last accessed on 2 March 2012

• Bakshi A. What is the business case for investing in TB diagnostics in India? McKinsey & Co, India. http://tbevidence.org/wp-content/uploads/2011/11/Ajay-Bakshi-Business-case-FINAL.pdf

• Grenier J, et al. Widespread use of serological tests for tuberculosis: data from 22 high-burden countries. Eur Resp J 2012; 39:502–5. http://www.tbevidence.org/documents/sysrev/serotology/Grenier%20ERJ%202012.pdf

• Corporate Social Strategy: Stakeholder Engagement and Competitive Advantage By Bryan W. Husted, Bryan Husted, David Bruce Allen.

• National Health Survey 3, Volume 1; http://www.nfhsindia.org/NFHS-3%20Data/VOL-1/Summary%20of%20Findings%20%286868K%29.pdf, page 13, last accessed on 17-Feb-12

• Satyanarayana S et al. From Where Are Tuberculosis Patients Accessing Treatment in India? Results from a Cross-Sectional Community Based Survey of 30 Districts. PLoS One. 2011;6(9):e24160. http://www.plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0024160

• Jaroslawski S, et al. Why are inaccurate tuberculosis serological tests widely used in the Indian private healthcare sector? A root-cause analysis. J Epi Global Health 2012;2:39-50. http://www.tbevidence.org/documents/sysrev/serotology/Jaroslawski_Pai_JEGH_2012.pdf

References

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• Dowdy D et al. Serological Testing versus Other Strategies for Diagnosis of Active Tuberculosis in

India: A Cost-Effectiveness Analysis. PLoS Med 2011;8(8): e1001074. http://www.plosmedicine.org/article/info%3Adoi%2F10.1371%2Fjournal.pmed.1001074

• Engel N et al. TB diagnostics in India: from importation and imitation to innovation. Exp Rev Mol Diagn 2012; 12(1), 21–24. http://www.expert-reviews.com/doi/full/10.1586/erm.11.80

• Pai NP et al. Point-of-care diagnostics for HIV and tuberculosis: landscape, pipeline, and unmet needs. Discovery Med 2012;13(68). http://www.discoverymedicine.com/Nitika-Pant-Pai/2012/01/18/point-of-care-diagnostics-for-hiv-and-tuberculosis-landscape-pipeline-and-unmet-needs/

• TDR & FIND. Diagnostics for tuberculosis. Global demand and market potential. Geneva, 2006. http://www.finddiagnostics.org/export/sites/default/resource-centre/find_documentation/pdfs/tbdi_full.pdf

• USAID India. Market-based partnerships for health. Tuberculosis control and care initiative. A baseline survey report. 2012. http://mbph.in/

• McEvoy & Farmer. Clinical Diagnostics Markets in India. 2011. http://www.mcevoyandfarmer.com/india.html

• Dye C. The potential impact of new diagnostic tests on tuberculosis epidemics. Ind J Med Res 2012; 135: 737-744. http://www.ijmr.org.in/article.asp?issn=0971-5916;year=2012;volume=135;issue=5;spage=737;epage=744;aulast=Dye

References

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• IIM Bangalore • Srinivasa Prakhya • Aditi Iyer, Vasanthi Srinivasan, Rajeev Gowda • Rishikesha T Krishnan • EPGP Office

• External

• Ajay Bakshi, ex-McKinsey & Company, Delhi • Michael Conway, McKinsey & Company • Akriti Bhalla, McKinsey & Company, Delhi • Anand Sivaraman, Remidio, Bangalore • BN Sharath , Central TB Division, Delhi • Chandrasekhar Nair, BigTec Labs, Bangalore • Hari Menon, Nilekani Foundation, Bangalore • Harkesh Dabas, Clinton Health Access Initiative, Delhi • Neeraj Mohan, ex-Clinton Health Access Initiative, Delhi • John Kenneth, St John’s Institute, Bangalore • KS Sachdeva, RNTCP, Delhi • Probir Das, BD, Delhi • Sanjay Sarin, BD, Delhi • Jasmine Jani, BD, Delhi

We are grateful to several individuals for their input and support (we are responsible for all errors and omissions)

53

• External (cont’d) • J Bhatia, Metropolis, Delhi • Nevin Wilson, IUALTD, Delhi • Puneet Dewan, WHO SEARO, Delhi • Ranjani Ramachandran, WHO SEARO, Delhi • Suvanand Sahu, WHO, Geneva • Sarabjit Chadha, IUATLD, Delhi • Satish Kaipilyawar, PATH, Delhi • Sridhar Ramanathan, ReaMetrix, Bangalore • N Sriram, Tulip Group, Goa • Szymon Jaroslawski, IBAB, Bangalore • Vineet Bhatia, Samm Health Consultancy, Delhi • Vineet Chadha, National TB Institute, Bangalore • Chapal Mehra, Global Health Strategies, Delhi • Neeraj Raizada, FIND, New Delhi • Rahul Thakur, FIND, New Delhi • Sandeep Sen, Sen Labs, Patna • Pradip Desai, Span Diagnostics, Surat • SP Ganesan, HiTech Labs, Chennai • Sarang Deo, Indian School of Business • Peter Small, Bill & Melinda Gates Foundation, New Delhi

We are grateful for several individuals for their input and support (we are responsible for all errors and omissions)