Healthcare | Caught in an ill wind
The war has impacted everything from drug ingredient costs to medical tourism numbers. There is no reason to panic yet, but the unease is growing
The ongoing conflict in Iran, resulting in stalled shipping and closed airspaces, has had a choking effect downstream. The healthcare sector in India has been jolted by the sudden shock—hospitals are seeing fewer international patients, pharmaceutical companies are facing rising raw material costs, diagnostic centres are worried about the supply of helium—used in MRI machines—and operating costs are slowly increasing. The situation is not yet a crisis, with very few hospitals willing to admit the full extent of the impact. But across the healthcare sector, costs are rising and supply chains are tightening.
The ongoing conflict in Iran, resulting in stalled shipping and closed airspaces, has had a choking effect downstream. The healthcare sector in India has been jolted by the sudden shock—hospitals are seeing fewer international patients, pharmaceutical companies are facing rising raw material costs, diagnostic centres are worried about the supply of helium—used in MRI machines—and operating costs are slowly increasing. The situation is not yet a crisis, with very few hospitals willing to admit the full extent of the impact. But across the healthcare sector, costs are rising and supply chains are tightening.
Ananya Bhattacharjee, 44, an HR consultant based in Chicago, has been planning her thyroid removal surgery in India for months after being diagnosed with early-stage thyroid cancer late last year. But the Middle East conflict has disrupted those plans—airspace closures and rerouted flights have increased airfares. The ticket she has been tracking has nearly doubled in price within weeks and flights have become longer and less predictable. Bhattacharjee now faces a difficult decision. Delaying surgery means continuing medication and repeated scans. Her situation highlights a lesser-known consequence of the ongoing conflict—not just rising medication or hospital costs, but the plight of patients whose treatment timelines are being disrupted due to the war.
Pharmaceutical companies are currently absorbing costs of more expensive raw materials. Many hospital administrators say operating costs are rising, but are not yet being passed fully to patients.
WHAT IS BEING DONE
To reduce the fall in patients from foreign countries, many large hospitals are trying to diversify medical tourism markets towards Africa, Central Asia, and Southeast Asia, while pharma companies are increasing inventories and rerouting shipments through alternative logistics routes. Diagnostic equipment companies are also promoting helium-efficient MRI machines to reduce dependence on imported helium. Experts say the situation is not yet alarming and healthcare services remain stable for now, but hospitals are closely monitoring supply chains and costs.
WHAT MORE NEEDS TO BE DONE
For starters, India must find ways to increase domestic API (active pharmaceutical ingredients) manufacturing to reduce import dependence and build strategic raw material reserves. India is a leader in generic drugs, but its manufacturing base need to be widened. The country also needs to expand cold-chain storage for better logistics. Considering the looming crisis over helium, the nation must invest in helium recycling, build up strategic helium reserves and buy more helium-free MRI machines. There also needs to be a boost to medical device manufacturing in India. Hospitals face an increase in operating costs due to rise in energy prices (generators use diesel)—investing in solar power is important. Prominent Indian hospitals can consider opening units in Africa, Central Asia and Southeast Asia. India also needs to aggressively promote itself as a destination for medical tourism. Finally, if prices of drugs spiral out of control, the Centre may need to introduce price monitoring.
