71%: The return from the S&P BSE Healthcare Index over the past one year.
- The Healthcare Index has given a return of 71 per cent over the past year. The sector is performing at a time when several others aren't.
- A number of factors are responsible for the sector's stellar show. As the table below shows, healthcare underperformed between 2016 and 2019. It is bouncing back now.
- Large-cap Indian pharma firms are major exporters to the US, a market in which companies are not allowed to brand their products and charge higher prices based on product differentiation.
- A key reason the sector was struggling earlier was that several players had entered the commoditised US market, increasing competition and bringing down margins.
- Indian manufacturers, however, enjoy a cost advantage. Many competitors have thrown in the towel now and exited the US market. With competition thinning, the returns of Indian pharma majors are improving.
- In the past, Indian factories were subject to scrutiny by the US Food and Drug Administration (US FDA). But now, manufacturers in the country have got their act together and have become more adept at meeting American standards.
A few links for further reading
Insecure and uncertain in insurance business as Covid-18 damage claims mount
Insurance companies around the world were sailing smoothly, helped by growth in emerging markets and strong capitalisation. Things changed in late February when markets realised that Covid-19’s impact on insurers could be significant. Insurers are yet to know the full impact of the crisis as governments and regulators nudge them to give moratoriums to policyholders and quickly settle claims too. India’s insurance regulator has set strict deadlines for medical insurers to settle Covid-19 claims. General insurers face damage claims from businesses devastated by the national lockdown to contain the disease. Is insurance secured to survive, Joydeep Ghosh explains
There was a time when pay cuts we see today were a complete no-no; govt and public sector jobs were considered safe, as pay and pensions were both assured. Not any longer, it seems, writes T N Ninan
Quick approval, grace period
The COVID-19 pandemic has brought home the significance of health and life insurance like nothing else earlier. Even those who were blasé about these covers in the past are now looking to buy a new policy or want to enhance the sum insured on their existing ones. Meanwhile, the Insurance Regulatory and Development Authority of India (IRDAI) has been issuing a slew of guidelines to health/general and life insurance companies aimed at easing matters for customers.