A dose of medicine to fix the health sector
What is the single biggest factor that is lacking in India’s healthcare sector today ? You don’t need to be a rocket scientist to come up with the answer : trust. The relationship between the doctor and his patient has never been this tenuous.
This may be true of the larger cities and towns but in smaller towns, there is a second big lacunae : availability of products. Unlike Mumbai, Delhi, Pune and all the large cities, availability of most medical products and devices can be a big constraint in smaller towns. While commonly used medicines may be freely available, specialized drugs and almost all devices and equipment may not be available easily if at all. Many rely on their relatives and contacts in the cities to courier or carry what they need.
To fill these two glaring gaps, an engineer from IIT-Delhi and an MBA from Stanford, Prashant Tandon, 37, with his partner Gaurav Agarwal launched 1Mg in 2015, an online portal and an app that can be downloaded on your phone.
On 1Mg, you can order medicines, ask for any medical devices to be delivered at home and choose and schedule your laboratory investigations from an array of laboratories. As of now, medicines can be delivered at over 600 locations in India and lab tests can be conducted at home from the laboratory of your choice in just over 50 locations in India. Once it’s fully rolled out, all services will be available – often at a discount - almost anywhere in the country.
But this is just the beginning. In its ultimate avatar and ambition, 1Mg and its promoters aim to help you navigate the miasma that the healthcare sector has become and to emerge confident that the treatment you are receiving is the ideal one for you. Whether you have been diagnosed with a viral or advised a surgery, you will be able to obtain an authentic second opinion on the site once you enter your prescription.
Moreover, you will be able to choose from a variety of alternative medicines so that you don’t have to blindly or unknowingly take the more expensive options. The way the industry operates in India, a single generic can have over 80-90 brands selling and the price variations (even for medicines from the same factory) can be sharp. Citing the example of a statin for cholesterol, Tandon says that there are 100 plus companies making the drug and the market leader is selling at a price 47% higher than competitors. The global inventor of the generic – also selling in India - is in fact not the market leader for the drug despite selling at a price that is 47% lower. If there is any logic in the way the market operates, few will be able to fathom it.
Although it sounds a bit unbelievable, Tandon argues that given time and patience, 1Mg’s ultimate goal of making the industry more transparent can be achieved. He knows trust won’t be easily built and their main vehicle for building trust will be the oldest and most tried and tested : word of mouth.
But for his long patient journey, he has both the talent and the funds required in place. 350 people are working in 1Mg and a significant number are there to develop this future content. He’s recently raised US $ 16 million from two large investors – the Swiss healthcare investor HBM Healthcare Investments and San Fransisco headquartered Maverick Capital Ventures to take forward his plans.
To step back a bit, after completing his MBA at Stanford and working for two years with Mckinsey in the US, Prashant Tandon, an engineer from IIT, Delhi decided that it was time to come back. His partner Sameer Maheshwari – a banker in the US and also from IIT and Harvard Business School joined him. The American economy was in the throes of the financial crisis, they had both spent a considerable time overseas already and India after all was home.
While working at Mckinsey, Tandon had his first brush with the healthcare sector and had seen how the Americans optimized each and every segment of the industry - even though the culmination of segments led to an combined industry that was “sub-optimal”.
He – and his partner Sameer Maheshwari, now 41 set up HealthChakra in 2009-10, a venture in the healthcare technology space, an area that was in its infancy in India at the time and was one where the duo expected stratospheric growth. India being India and moving at its own pace, it didn’t happen. HealthChakra failed to take off as envisaged and young entrepreneurs were back to square one.
But there was something else that was happening around the time. While India was getting more and more health conscious, the younger generation was also getting more conscious of how it appeared. Gyms and working out had become a new way of life for urban and small town Indians and a whole host of nutrition, protein and health supplements had come into the market, half of whom were selling fake and at times even harmful supplements. The industry was also operating on “absurd” margins.
That gave birth to HealthKart and by December 2011, the duo raised US $ 5.5 million from investors (Sequoia and Omidyar) for the new venture. Growth and success came quick and easy. With a multi channel distribution network, HealthKart is focused on nutrition and its protein supplement – Muscle Blaze – is the second largest brand in the country today. Tandon doesn’t divulge numbers but says that HealthKart is second to US originating Optimum, a Rs 250-300 crore brand in India today.
It’s after having tasted failure in HealthChakra and success in HealthKart that 1Mg was born in 2015. Agarwal, the chief technology officer for HealthKart has joined Tandon in 1Mg while Maheshwari remains in charge of HealthKart.
Will 1Mg go the HealthChakra way or the HealthKart way, time only will tell but for consumers in India, a success for 1Mg will mean a far more real and substantive gain than any other.