There is a lot to discuss on the business front, on the medical front and also on what is happening in Maharashtra. What do you want to start with?
Let’s start with what is happening to the entire state of Maharashtra. According to me, something is wrong. 50% of the national increase in infections is in Maharashtra and 50% of Maharashtra’s load has increased in Mumbai alone. It is very sad to see the numbers rising. Somebody pointed out even the deaths per day are rising. I was thinking that it will be only infections per day, non-deaths per day.
Having said that, is that a new variant? Does the new variant spread faster, but is safer? Or is that new variant spreading faster and equally bad? This is something for which answers are still not known. I was thinking that we would escape from a number of deaths, and that the infection account will go up because the virus has not vanished. So, if you ask me why western India, Maharashtra and Mumbai have such a huge load, it is not scientifically explainable.
Based on the medical evidence, the second wave is more brutal and powerful than the first. Are we at least two to three weeks away from a peak or will the vaccines start breaking the chain soon?
No, I do not think we have enough of past data to predict the behaviour of the virus. I am 60 years old and I have never been in a situation of this nature in my life. Having said that, the western world had a very bad second wave, even third wave. It is because they are not getting an immune response faster for the virus and they are struggling.
In India, if we have seen deaths per day from 1,200 coming down to 100, was it purely lockdown? Or was it herd immunity? Or was it rapid antigen testing showing fewer numbers? Or is it under-testing to bring down the numbers faster to bring up the economy? I am confused completely.
Having said that, are all states testing like Maharashtra? Answer is no. Are all cities testing like Mumbai? The answer is no. In Mumbai and Maharashtra, the testing is high because the infections are high. Or infections are high because the testing is high. I think you need to ask analysts to find out what the data is saying. According to me, this wave will not be able to do the same amount of damage that the first wave did. I am very clear about it.
Given that the number of testing has gone up, how has that changed life for Thyrocare and also for diagnostic firms?
The entire industry was doing a peak number of RT-PCR tests at a very good rate; somewhere around 1,500 in the month of August and September. It looked like it was going to truly contribute substantially to the topline and bottomline of the diagnostic companies. But then came the unilateral price cut across different states. It is sad to know that in some states it is still Rs 3,000 and in some states it is only Rs 400.
Having said that, the price capping has affected the diagnostic industry. Number two, the number of deaths were 1,200 per day, everybody wanted desperately to get tested. But it had come down to 100 per day in the first week of February, so the tests had come down. What was in absolute numbers around 20 crore per month had come down to 5 or 6 crore per month. But suddenly, the last eight weeks it has gone up by five times in volume. It is still making profit. For a few months or few years, COVID will remain as the biggest revenue giving test in the laboratory segment.
Do you think offices would make RT-PCR tests mandatory? Is this something that could go on till the virus exists?
From the last one year it is very clear, diagnosis is not changing the management of COVID. It only helps to quarantine and minimise the exposure. So, if the government insists that all have to take tests, and you have no business justification to do the test, you close down the business. But if you have to run the business, this will be one more overhead. According to me it may not give any clinical outcome, but certainly it will make us understand what is happening with the virus in this geography: which age, how fast. You will come to know all those things only when you do COVID testing.
But one important point I want to mention: there is an increase in the number of deaths from February first week to April first week. They are all death with COVID, but are they death due to COVID? It is not studied. Death with COVID is not because of COVID. Population has 5-7% of infection diagnosed or undiagnosed, tested or not tested, vaccinated or not vaccinated. So, it is important that we study. Is COVID causing these deaths? Or is it that additional deaths are labelled as COVID? It is very important for us to understand so that the philosophies and policies of all government, administration, bureaucracy can be fine-tuned.
Is there any data to establish as to whether testing has actually gone up?
They have gone up. Mumbai laboratories, laboratories in Maharashtra are testing to the brink of their capacity. There are collection challenges, there are testing challenges. I myself have travelled from 2,000 per day from the first week of February to last Sunday’s 10,000 per day. Now, for a Sunday generally it is 40-50% of the weekday load. 10,000 per day is a matter of huge stress.
I am pretty sure everybody is panicked. Some who tested positive, now their entire family is getting tested. Tests have become affordable, so testing is done more. More testing is done and positive cases are reported more, which is causing panic.
Given what you have said about prevention being more important than some of the measures taken, but in terms of the situation in hospitals, is that something you see easing? Give us a sense of where we are in the current cycle.
According to me the quarantining is happening at home. A good number of families are locking the door, taking rest and combating the virus. This was not happening in the first wave. In the first wave, there was more panic. In the second wave there is less fear. When I say less fear, it does good and bad. Less fear makes people not to worry about the safety guidelines and less fear is good because there is less panic.
Having said that, the rich still feel hospitals are a safer place. So, they move to the hospital whether they need hospitalisation or not. According to me, in hospitals 90% of Covid beds are full not because it was a compulsion but because it was an option and people could afford to. I do not see the numbers being as bad as what they were at the peak of the first wave and hospitals struggling as bad as that.
In my personal opinion, herd immunity is working. More is tested, more is reported, but more is not because of Covid. It is with Covid positivity for various other comorbidities. We are labelling them as Covid deaths. A careful analysis is very important at this stage to understand whether these deaths increase because of Covid or otherwise.
If this research is done, it can pass a little more peacefully because it has happened like this in some parts of the country. The worry is if you start testing in all parts of India, all districts of India, the scenario may not be very different. It is very important to study the increase in deaths: is it alarming or is it a part of life?
In terms of business, is there anything else you want to share with us going forward? What is the outlook?
Diagnostic companies, as you can see for the last three-four days, are rallying. They rallied in the first peak, and they will rally in the second peak, whenever the peak comes. People think that it is going to do well in terms of the stock market. As far as business is concerned, for us this quarter will be very unique. There is a likelihood of 300-400% quarter-over-quarter. Last year this quarter had completely collapsed. So, we need to take care of the ups and downs. Otherwise, business is fairly smooth with normal challenges.
What has been your experience in terms of the non-Covid tests, the home services, and people who want to get themselves tested for other illnesses? Is there a change in that?
Overall, I have been saying that we have spent trillions of dollars across the globe to make man aware of health and man is very scared. So, if you ask me, the non-Covid business is not disturbed in this peak as much as in the last peak. People had felt that Covid was the only problem. Today, people know that Covid is one more problem and we do not see any dip because of this second new wave on the non-Covid side.
Are you making more money on the Covid test than what you made at the same time last year?
No, the percentage of margins has come down, but volumes have gone up. Incidentally, after the peak which was in September when the deaths per day had come down, when the testing per day came down, when rapid antigen test was mercilessly used, the RT-PCR manufacturers had too much stock in hand and too little demand. So, they came down on rates very fast. You asked the rate, you got the rate. This is a story only till March 1st.
In March first week, people understood that there will be a big second wave peak demand. So, the vendors are again not really keen to supply at the same terms which they supplied in February and January. But with the rates, the government reduces, it does not increase. So, there may be challenges for us to manage for profits with the control of the government and with the demand of the market. Both are going to trouble us.