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Reliance Life Sciences plans entry in diagnostics industry; may lower drugs prices

Diagnostic
The industry considers that the move of RLS will help to increase the market size for organised players.

After getting established as a leader of the telecom market and having a significant share in the e-commerce market, Reliance Industries is reportedly considering to make an entry into the diagnostics industry. The life-science arm of Reliance Industries, Reliance Life Sciences (RLS) is planning a foray into Indian’s Rs. 75000 crores diagnostics industry. Reliance Life Sciences (RLS) will set up pathology labs across the nations. Reliance’s entry into the diagnostics industry could bring down the prices, says the industry veterans.

Commenting upon this decision, A Velumani, promoter, chairman, MD & CEO of Thyrocare diagnostics, says that RLS’ entry into the diagnostics market could follow a disruptive pricing model like their telecom venture of Reliance Jio. He adds further that around 95 per cent of the laboratories presently are working under capacity, with machines lying idle. He feels that in the next 10 years, the dynamics of the entire industry could change.

Thyrocare and RLS had tied up in 2003 to offer DNA technology-based testing services.

Reliance Life Sciences will partner with local players, doctors, pathology labs and hospitals to establish the chain of diagnostics centres.

The reports from various sources say that RLS will follow a ‘hub and spoke’ model. A regional centre will provide ‘super-specialised’ tests, while the chain of network labs will provide routine tests generally offered by diagnostic labs. On the lines of existing diagnostics centre, Reliance Life Sciences will set up the collection centres from where the test-details could be sent to the regional hub or the network labs for processing.

At present, India has total 100,000 diagnostic labs in India and 1,076 centres only are National Accreditation Board for Testing and Calibration Laboratories accredited. The current average cost of a pathology test is in the range of Rs 280 and Rs 350. Out of total Rs 75000 crore market of diagnostics industry, pathology and radiology in the private sector is about Rs 45000 crore and the government sector is for about Rs 27000-28000cr

Indian diagnostics market is highly fragmented. The organised diagnostics chains have only 16 per cent market share, while hospital-based centres keep 37 per cent and 47 per cent with standalone centres.

The industry considers that the move of RLS will help to increase the market size for organised players.

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