Dr Lal Pathlabs
Lal Path Labs (LPL) a chain of pathological laboratories headquartered in New
Delhi, with labs in Mumbai, Gurgaon, Noida, Kanpur, Chandigarh, Ludhiana and
Jammu, has a countrywide network of collection centres. LPL was established
in 1949 by the late Dr S K Lal, one of the pioneers in the field of pathology.
This is a chain of 35 labs and 600 collection centres all across India. The
lab today offers a comprehensive test menu covering the entire diagnostics range
with 1650 tests.
The annual turnover of the company for this year is Rs 150 crore. LPL carries
the highest number of tests in the areas of pathology, cardiology and radiology.
The company has been managing the lab activities for Vishesh Hospital, Indore
from the past one year and it would soon be looking after the lab activities
for Jindal Hospital in Isar, Punjab by November, 2008. The lab is planning to
expand their test menu, so the new HIV tests and new TB tests are some of the
tests that will be conducted at LPL by end of October 2008. "The company
follows a Plan-Do-Check-Act (PDCA) cycle to continuously improve and better
customer service which is the guiding principle," informs Dr OP Manchanda,
CEO, Dr Lal PathLabs. The company also has its collections centres in Nepal
are concentrating on both Greenfield ventures as well as taking over pathology
labs through the acquisition route"
- Dr OP Manchanda
Dr Lal Pathlabs
Being one of the oldest players in the lab industry, LPL has
significant accreditations and recognition to its credit. These include accreditation
by 'College of American Pathologists (CAP)', 'National Accreditation Board for
Testing and Calibration Laboratories (NABL)' and 'Ministry of Science and Technology,
Government of India'. The company is therefore poised to take its quality services
into different parts of India. "We have the honor of being the first company
in India to be selected to form a Public Private Partnership (PPP) programme
at Agartala," says Dr Manchanda.
The company has adopted a Laboratory Information Management
Systems (LIMS) in all its diagnostic centres since 10 years. "This system
gives 100 per cent accuracy in test results for diagnosis of any disease or
ailment," says Dr OP Manchanda, CEO, Dr Lal Pathlabs. LIMS is software
which handles receiving, processing and storing information generated by medical
laboratory processes. LIS is a highly configurable application which is customised
to facilitate a wide variety of laboratory workflow model. Enterprise Resource
Planning (ERP) is another IT solution which will be implemented by the end of
October, 2008. This system will be utilised for managing commerical data within
the company. An ERP system is based on a common database and a modular software
design. The estimated amount spent on these IT soutions is $ 2 million.
Challenges to Tackle
The laboratory industry is one of the unorganised sectors and the lack of Governmental
regulations and accreditations have resulted in proliferation of approximately
50,000 unorganised labs all over the country. Quality is mostly compromised
in such labs, thus resulting in poor patient care and management. A comparison
between the US and Indian data shows that the top three players in the US market
contribute about 50 per cent while in India, the top five players contribute
8-10 per cent, therefore meeting this margin becomes challenging.
Challenges are also pertaining to the clinical trials because according to experts
the US continues to be the most favoured destination for clinical trials. Over
57 per cent of all global trials are being conducted in US. China has again
overtaken India in the number of trials conducted in the country. There are
currently 419 clinical trials ongoing in China against 376 in India. LPL
has to be prepared to give quality leadership and come up to global standards
in the clinical trials space. This can happen only when it has good infrastructure
like world-class laboratories for doing safety testing to find out for any toxicity
in the drugs under development, says Dr Manchanda.
LPL aims at reaching every nook and corner of India with its wide range of diagnostics
services. Keeping sight of its mission, LPL has few expansion plans in the pipeline.
The company is soon to set up 15 more labs, thus making it a figure of 50 labs
in the country. Further it has plans to expand the 600 collection centres to
1000 in the next six months. "Collection centres have also proven to be
effective in creating reach, however, their effectiveness is significantly less
compared to the physical presence of a lab," says Dr Manchanda.
The company cannot bank upon just one means of growth; it should be by both
organic and inorganic means. "We are concentrating on both Greenfield ventures
as well as taking over pathology labs through the acquisition routes. Much of
the growth can be attributed to acquisitions rather than Greenfield ventures,"
shares Dr Manchanda. The expansion strategy will be powered by a mix of acquisitions
and setting up their own laboratories. The acquisitions will be funded through
internal accruals, venture fund Sequoia Capital and debentures. The company
is building Asia's biggest laboratory (85,000 sq ft) in New Delhi, to be commissioned
by May 2009. Out of the entire expansion plans, Rs 25 crore is estimated for
Greenfield ventures whereas Rs 75 crore for acquisitions. The company foresees
an organised growth for the Indian diagnostic industry with multiple acquisitions
and tie-ups among Indian and global players.
India has emerged as a global R&D hub for the pharmaceutical
industry and as a result, is a strong market for clinical trials and central
lab services. "LPL has set for itself the goal of leading the process of
consolidation and garner a market share of 10 per cent in the next two-three
years," says Dr Manchanda.