Like all other sectors, covid-19 pandemic massively impacted functioning and revenues of diagnostic industry. As the country ramped up testing, interestingly, the sector played an important role in India’s fight against covid-19. Arindam Haldar, CEO, SRL Diagnostics spoke about challenges that diagnostic sector faced during the pandemic, cost of testing and revival of the sector. Edited excerpts from an interview:
How has the Covid-19 pandemic impacted the diagnostics sector?
The diagnostics industry has been on a sharp decline since mid-March. During the lockdown, walk-ins (B2C business) have been significantly affected. Also, logistical challenges to move samples around, with the lockdown of interstate and intrastate movement, stopping of OPD services and elective surgeries at hospitals and clinics, corporates working from home, etc., the B2B business was also equally affected. As expected, the diagnostics chain labs have shown a strong recovery from the deep impact seen in last week of March and in April, but the non-Covid revenues are yet to come to the last year’s or pre-Covid levels. Amongst all our labs in the network offering Covid diagnostic tests, we have done more than 2.2 lakhs of RT-PCR tests till date. That partially makes up for the revenue gap, but not completely. However, the margins made on Covid test is significantly lower, and the recent price cut has also affected profitability in a big way. At the same time Covid associated costs like data entry, supervision, and logistics, have all gone higher than the initial estimates. Today, private labs are struggling to find their feet amongst the various challenges they encounter in their covid-19 journey including complex, and ever-changing regulations, cost pressures, lengthy data entry requirements, banning of labs for frivolous reasons to name a few, putting incredible pressure on already overworked medical professionals. Thus, while the overall revenues are progressively becoming better, the higher costs on Covid, and the regular non-COVID business still far lower than earlier period, this is putting incredible financial strain to sustain fixed costs and operation. Apart from this, our frontline healthcare workers are at an increased risk of falling victim to this infection, and there’s a rising challenge to keep them safe. We have no other option but to plan for higher bench strength on a temporary basis to sustain operation. Getting trained workers for COVID testing as back-up is a difficult task too.
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Source: Livemint
